MAK:  Welcome back to Money with Mak and G.  We’re glad you’re here and don’t forget to LIKE, SUBSCRIBE and COMMENT on the podcast. We’ve missed you and we missed

           DAD/MAK: Financial Literacy Month

DAD: It was in April.  It started almost 20 years ago, and it’s helped a ton of people understand how money works and how to make better decisions.  We love it because we’ve got the same goal.

MAK: There was so much you could do, but many of the helpful tools are still out there.  I know we’ve always said every month is financial literacy month. But, last month there was an extra focus on helping.

DAD: We hope you got a little motivated because there’s no better time to kick it into high gear. Many are still willing to help, like 

           MAK: Your local JumpStart Coalition

           DAD: Library activities

           MAK: Check out not-for-profit credit counseling at fcaa.org or nfcc.org

           DAD: Ask your bank or credit union how they participated

           MAK: Did your school take part? If so, GOLD STAR.

           DAD: Or you can still do a Google search.

MAK: If you were in Idaho, you could’ve participated in the Piggy Bank Beauty Contest.

DAD: That piggy bank idea does sound fun and makes me smile. Be an advocate to help make a change.  

           DAD/MAK: Thank you for making a difference.

DAD: Ok, so I was the reason we’ve been gone for several weeks.A major wipeout on my bike.

MAK:  He’s ok, but he hit the ground so hard, it broke his clavicle into 4 pieces. A CAT scan, surgery and the whole works. They put him back together with a plate and screws.  He’s back and better than ever.

DAD: It required Mak & G to do a lot of bringing me the remote, my iPad, iPhone and lots of ice.

MAK:  Can you believe how much ice costs?  You went through $5/day.  Ok, that’s beside the point.  But, I guess you are training us to think about cold, hard cash, right? Notice how I got “cold” in there.

DAD: Yep, nice.  You couldn’t be more right. By the way, a big shout out to all the Mothers out there.  What a great warm weekend.  We hope you enjoyed some QT with your moms.  

MAK:  It was interesting to see the information about spending this past weekend. Spending keeps rising and was supposed to hit almost $32Billion!!  But, we have to watch our pennies.

DAD: Right again Mak.  Everybody loves a good card, maybe flowers and chocolates, but the data gives some shocking info. The average is almost $250 which is up 10% from the prior year.  

MAK:  But, it looks like one survey we found showed over ⅓ wanted just a card and quality time. That’s nowhere near $250.  But, most people feel the need to give gifts, and only about 20% spend FREE, QT.

DAD: You know that’s my favorite four-letter “f” word:

           Mak/DAD: FREE!

MAK: I know. It doesn’t make sense to me. Why do we all feel like we have to spend big bucks on gifts when moms don’t even want them.  About 3 of 4 people plan to buy a gift.

DAD: And almost 80% of moms don’t want flashy gifts.  Being a bit wiser about spending is the key to getting wealthy.  Looking wealthy isn’t the same as BEING wealthy

MAK:  Thoughts and your own actions, really reduce your spending, because they’re free.  My card was a piece of paper, some ink, and my time. Moms want us to be smarter about money.

DAD: And, mom said she’ll keep it forever, which is better than a $4 or $5 card.  I GUARANTEE it. My mom was a serious financial role model.  She could stretch a grocery budget for the 8 of us for miles.

MAK:  I remember the stories of going to the “day old” store for bread and other items, because they went past expiration, and they were cheap. When you have to feed that many mouths, you have to get creative.

DAD: That’s true.  And, can you believe about ⅓ of people will take on Debt for Mother’s Day!!! The info I read says those are people who earn over $100k.  That’s a great salary, so why?

           MAK/G: That’s BAD DEBT.

MAK:  What are people thinking!!! And, this is funny. About 40% of mothers have SCOLDED their kids for spending too much on their gifts.  Sounds like your mom!

DAD: Yep, she didn’t always have a light touch, but she was right a lot. I learned a ton from her!

MAK: We know there’s been a lot of big money news recently, which is affecting the:

           DAD/MAK: Economy

DAD: The economy as we know, is how all the money moves around.  Companies buy raw materials to make products, LIKE VIDEO Games, then they sell them and GRANT BUYS THEM!!

MAK: Money is paid to make the video game, which is all the creative guys who barely leave their game console.  Oops, I mean super smart and creative guys (and girls) that make them. So money is moving all over the place.

DAD: When the economy is working and we’re making more products, that’s usually good, as people have jobs, more products are made, and people are buying more of what they want and need.

MAK: We can do all kinds of things to make our lives better when the economy is good. We usually have job opportunities and we have money to spend, save and invest.

DAD: But, if you’re working on growing your own personal money tree, there can be outside forces that can make it tougher to reach your goals.

MAK: So true. Here’s a way to explain it.  If you planted a regular tree, you expect the weather to come in 4 seasons.  Winter, spring, summer, and fall.  The economy has a business cycle like the 4 seasons.

DAD: Agree. Just as the fall generally gets cooler and the winter goes cold, a tree doesn’t grow as much as during the good times.  The leaves will fall off, and the tree goes into something like hibernation.

MAK: Let’s name the 4 seasons of the business cycle that affect the economy?  Ready, set, go!

           DAD: Expansion

           MAK: Peak

           DAD: Contraction

           MAK: Trough

DAD:  Expansion is pretty easy to think about.  Things are good and everything is expanding.  My tree would be growing. It would get bigger and stronger.  It can only do that when things are good. Kind of like my waistline expands when things are really good, and I’m eating lots of great food.

MAK: Scary, but yes. It will peak. It grew about as much as it could after it got water in the spring, sunshine in the Summer, and now you’ve got a big beautiful, full-sized tree with lots of leaves. But it will contract when the season changes.

DAD: That means things get a little smaller. Just like in English, a contraction turns “You are” into “you’re”.  For the economy, people buy less, there are fewer jobs and companies make fewer products.

MAK: For a tree, the weather changes. It’s literally an outside force. Get it?  It’s outside because it’s the weather. Hey, I thought that was funny. 

DAD:  Ha.  Love it.  The same thing happens to the economy.  Things start to stop growing and get smaller. (pause) Just as the peak is the top… The Trough is the bottom.

MAK: You do know that a trough is something that holds water for an animal to drink. If the water is really low, it bottoms out. Right now there is a lot of talk about a potential contraction called a:

           DAD/MAK: Recession.  

DAD:  Not a favorite word for me.  It’s not a great thing for the economy.  But, it’s super important, just like the four seasons.  It happens over and over, but each season in the economy can last months or years.  We’ve been expanding for many years, so we knew something would happen.

MAK: So, we did see that the economy contract, or get smaller recently for the first time in a long time.  We couldn’t make all the products needed because the supply of parts has been interrupted. It’s called:

           DAD/MAK: THE SUPPLY CHAIN

DAD:  Plus we have inflation. Things cost more, so people buy less. When there is a contraction, you’ll see the stock market go down. Companies aren’t making as much money, but it will turn, just as the seasons change, and we’ll be back on track.

MAK: The question is how long.  Ok, we’ll have to cover that on another podcast.  Even though dad broke his clavicle, the economy is NOT broken. It’s just part of the 

DAD/MAK: cycle.

DAD:  We’ll see you next time for more Money with Mak & G!!!

MAK: BYE!!