topic 1 spending

professor penny

If you find yourself struggling with spending discipline, try this strategy. Pay cash for all purchases. Swiping a credit or debit card makes an item feel free because you don’t actually give up anything at the time of the sale. Giving up cash (and watching how much actually leaves your hand) will change your habits.

Learning goals

By the end of this topic, you should be able to:

Identify spending strategies

section outline

Topic 1 Spending

Content Videos

The Gus A. Stavros Center for the Advancement of Free Enterprise and Economic Education at Florida State University is pleased to offer these resources. They were created by Teaching Professor Joe Calhoun.

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key point

Two strategies to spend more efficiently are to purchase used items and to purchase slowly- avoid impulse buys and quick decisions.

Coach Chris

Chris Hogan is the author of two #1 national best-selling books: Everyday Millionaires (2019) and Retire Inspired: It's Not an Age; It's a Financial Number (2016). While visiting Florida State University in 2023, he made a presentation to students. This segment is about life choices.

Certified peer mentors

Mentors give presentations to groups about our topics. They also assist other students in personal finance matters and answer questions during individual meetings. To schedule a presentation or an appointment to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.

a topical story

Isabella stood in line at the Barnes and Noble café, her backpack slung over her shoulder and her debit card twirling about her fingers. She scanned over the menu, though she already knew what she wanted.

“Why is it that I always find you here during my break?” Jayla asked, entering the line behind Isabella.

Isabella smiled, “Why do I always find you here when I’m about to study?”

“Because I work here, remember?” Jayla replied, chuckling.

“Touché,” Isabella said.

“Same thing as always?” Jayla asked as the two of them moved up the line.

“Yep, caramel frappe with a shot of espresso and extra pumps of vanilla,” Isabella recited. “I can’t live without it, much less get some studying done!”

“And here I am thinking that a caffe mocha was too extravagant,” Jayla replied.

The girls ordered their drinks, taking a seat while they waited.

“You said you order this basically every time I see you…which is…” Jayla paused for a second, “every other day?” she asked.

“Nothing wrong with a little splurge once in a while, right?” Isabella said.

“Well, that’s just the thing, I don’t think that it’s a splurge. If you spend a little extra on coffee every time you get some, it can quickly turn into overspending,” Jayla explained.

“It only costs me six dollars, Jayla, that’s not that bad,” Isabella defended.

“Yes, but by the end of the week, six dollars every other day makes a total that’s much more expensive than what it needs to be,” Jayla said. “You don’t want that. What you need is a spending strategy! Having a strategy in mind when making purchases can reduce unnecessary spending. Madison taught me that much at least when she showed me some budgeting tips.”

“Budgeting just for coffee? That seems like a lot! Besides, my coffee is very necessary, thank you very much!” Isabella defended. After hearing their names called, the two picked up their drinks and sat back down.

“You don’t have to budget just for coffee, but you could at least have a strategy set in place when you get some. Like if you were to buy something a little cheaper and save a little bit of money with every purchase,” Jayla suggested. “Maybe buying something like an iced caramel macchiato instead.”

“Okay, but I really like this frappe. If I want it, I should be able to buy it,” Isabella countered.

“You can, but maybe one day per week instead of every time you buy coffee,” Jayla said. That way, you’re still getting your fix and you’re saving some money while you’re at it.”

“Well, that doesn’t sound too bad. It’s a smart idea,” Isabella said.

“Right, and that will help you avoid overspending…not that you are,” Jayla added before taking a sip of her coffee.

Isabella gave a smirk before sipping her own drink. “Hey, what can I say? I like my coffee!”

(Story created by Jasmine George, Ana Siqueira, Courtney Swanson and Alex Thompson)

related books

These books have a chapter directly related to this topic. Please read them for more details.

Chapters 3 & 8: Kiyosaki, Robert. Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! Plata Publishing, 2017.

Chapter 8: Ramsey, Dave. Dave Ramsey's Complete Guide To Money. Ramsey Press, 2012.

Chapters 2 & 3: Bach, David. The Automatic Millionaire, Expanded and Updated: A Powerful One-Step Plan to Live and Finish Rich. Crown Publishing Group, 2016.

Principles 21, 23, & 26: Siegel, Cary. Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By. CreateSpace Publishing, 2013.

Chapter 5: Ramsey, Dave. The Total Money Makeover. Nelson, Thomas, Inc. 2013.

Chapter 2: Stanley, Thomas; Willam Danko. The Millionaire Next Door: The Surprising Secrets of America's Wealthy. Taylor Trade Publishing, 2010.

Chapter 4: Lowry, Erin. Broke Millennial: Stop Scraping By And Get Your Financial Life Together. Penguin Publishing Group, 2017.

additional resources

https://www.daveramsey.com/blog/money-habits-we-need-to-break

https://www.consumer.ftc.gov/articles/0106-shopping-tips

https://www.daveramsey.com/blog/cash-vs-credit-card

https://www.igrad.com/articles/how-to-make-sure-your-splurges-will-bring-you-joy-instead-of-regret

https://money.usnews.com/money/blogs/my-money/articles/signs-you-shop-too-much

https://www.npr.org/2020/09/21/915289340/spend-savvier-save-smarter-5-tips-to-stop-stress-spending

https://www.annuity.org/financial-literacy/

other books

Malkiel, Burton. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing. W. W. Norton & Company, 2020.

Wood, William. Getting a Grip on Your Money: A Plain & Simple Christian Guide to Managing Personal Finances, Eliminating Debt, Spending, Saving & Giving, Investing for the Future. Intervarsity Press, 2002.

Bach, David. Smart Women Finish Rich, Expanded and Updated. Currency, 2018.

Bogle, John. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. Wiley, 2017.

Clason, George. The Richest man in Babylon. Dauphin Publications Inc., 2018.

Hill, Napoleon; Arthur R. Pell. Think and Grow Rich: The Landmark Bestseller Now Revised and Updated for the 21st Century. TarcherPerigee, 2005.

Lynch, Peter; John Rothchild. Beating the street. Simon & Schuster, 1994.

Kobliner, Beth. Get a Financial Life: Personal Finance in Your Twenties and Thirties. Simon & Schuster, 2017.

Orman, Suze. The 9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying. Currency, 2006.

Bach, David; John David Mann. The Latte Factor: Why You Don't Have to Be Rich to Live Rich. Atria Books, 2019.

Hogan, Chris. Everyday Millionaires: How Ordinary People Built Extraordinary Wealth―and How You Can Too. Ramsey Press, 2019.

important government sites

Housing:

Federal Housing Finance Board ensures the regulated entities fulfill their mission by operating in a safe and sound manner (Links to an external site.)

Ginnie Mae-the principal financing arm for government mortgage loans (Links to an external site.)

Freddie Mac makes homeownership and rental housing more accessible and affordable (Links to an external site.)

FHA is the largest insurer of residential mortgages in the world (Links to an external site.)

VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners (Links to an external site.)

Economy:

Bureau of Economic Analysis reports GDP, Income, International Trade, and many others (Links to an external site.)

Bureau of Labor Statistics reports Unemployment, Prices, Productivity, and many others (Links to an external site.)

The U.S. Department of the Treasury's mission is to maintain a strong economy and create economic and job opportunities (Links to an external site.)

The U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream (Links to an external site.)

Banking:

The Federal Reserve System performs five functions to promote the effective operation of the U.S. economy (Links to an external site.)

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation's financial system (Links to an external site.)

The National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions (Links to an external site.)

Federal Regulation:

The Internal Revenue Service is the nation's tax collection agency and administers the Internal Revenue Code enacted by Congress (Links to an external site.)

The Federal Trade Commission protects consumers and competition by preventing anticompetitive, deceptive, and unfair business practices (Links to an external site.)

The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation (Links to an external site.)

The CFPB is committed to providing consumers with up-to-date information and resources to protect and manage their finances (Links to an external site.)

(Links to an external site.)Other:

Social Security Administration (Links to an external site.)

Department of Education (Links to an external site.)

State of Florida

ECO 3041

ECO 3041 Personal Finance is a 3 credit hour course offered in-person and online each fall and spring semester. The purpose of the course is to provide you with the specific content knowledge of personal finance and to give you opportunities to start using that knowledge to create good habits, make better financial choices, and live a more fulfilling life. It covers material for all 33 topics listed here. See Professor Calhoun's most recent syllabus here. ECO_3041_SP21.pdf

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To schedule a presentation or an appointment with a certified peer mentor to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.