Video Post: Graduated Driver’s Licenses

Video(s): Real Teen Driving from Geico Commercial OR...






Suggested Reading: Teen Drivers: Fact Sheet from the U.S. Centers for Disease Control and Prevention


Quick Thought: Auto accidents are the No. 1 killer of teenagers. According to the U.S. Centers for Disease Control and Prevention, “In 2009, about 3,000 teens in the United States aged 15–19 were killed and more than 350,000 were treated in emergency departments for injuries suffered in motor-vehicle crashes” (Teen Drivers: Fact Sheet).

Despite Kentucky’s laws, which provide for a graduated driver’s license for teens, we haven’t yet reduced teenage driving deaths and injuries in half. I believe the reason is multifaceted: (1) teens believe bad things happen to others, and not to them; (2) they are overconfident about their own driving skills; (3) teenagers are higher risk takers and many are thrill seekers; and (4) they want to show off to friends. There may be many other reasons, as well. Think of all the distractions teenagers have, like cell phones, friends, and the radio.

Readers:


1. Do you think seeing the video(s) and reading the handout will change how new drivers drive? Why or why not?

2. Do you think you’re a good driver? Why or why not?

3. Does seeing these teenagers’ own impressions of how they drive along with the reality make you wonder about your own driving? Why or why not?

4. What do you think would help most to improve teen driving?

Website Pick of the Week

Corresponding Post: Graduated Licensing Saves Lives


Website: http://www.autosafety.org/


Reason: The Center for Auto Safety provides much information on a variety of topics related to auto safety, including airbags, defect investigations, lawsuits, recalls, rollovers, seatbelts, small car safety, SUVs, tires, and vehicle fires. You can learn about fuel economy and lemon laws, and you can file and view complaints. You can also find lawyers and experts to assist you.


Readers: Please research the risk of various distractions while driving that cause accidents. Then find or develop a media story to make your fellow drivers aware of the various risks. You could post your found or developed videos in the comments section to show the risks of distractions (e.g., texting, drunk driving, use of a cell phone, and other risky behavior). Or you might want to write a short story with a newspaper audience in mind. Saving one life can make a great difference to you, your friends, and your communities. Here are possibilities for lifesaving actions you can take:


1. Urge fellow students to stop friends from engaging in risky behavior while in the car, going to and from school, or on dates.


2. E-mail media stories to fellow classmates or send videos you develop to local TV station, or post them on the Internet.


3. Develop a series of public service announcements for local radio. 

Graduated Licensing Saves Lives

Young people are typically excited to get to drive for the first time, but how much do you think about the risks you take when you get behind the wheel? You know you’re less experienced than adult drivers, but how much does that really make a difference? You took driver’s education, so shouldn’t you be okay?

Actually, there is good reason for concern. Auto insurance is more expensive for teen drivers, especially males, because these drivers are involved in more accidents. According to Insurance Journal, “More than 81,000 people were killed in crashes involving drivers ages 15 to 20 in the decade from 2000 to 2009, making teen driving crashes the leading cause of teen deaths nationwide.” 

Teen drivers are only 6 percent of all drivers in Kentucky, but they are involved in 21 percent of all accidents in the state (see Impact of Partial Graduated Driver’s License Program…). Driver’s education should prepare teens to drive safely, but so far it has not been enough. And Kentucky has implemented graduated driver licensing, which has saved many lives, but our graduated licensing program is not up to national standards.

Kentucky’s licensing program begins with a 6-month learning permit stage, which may begin as soon as Age 16. There is then anintermediate license stage until Age 18 and, finally, an adult driver’s license.

The initial, permit stage has a restriction on driving after midnight; it requires adult-supervised driving at all times; and there is a six-point limit on traffic violations. The penalty for excessive violations is license suspension.

The intermediate stage also has a six-point limit on traffic violations, with a penalty of license suspension. It also requires a 4-H driver safety education class or other driver’s education course.

Besides these restrictions, blood alcohol limits are lower (0.02 dl/ml) for drivers younger than Age 21. However, Kentucky places no limits on the number or ages of passengers for teen drivers, as long as those at the permit stage have an adult driver in the front passenger seat.

Kentucky’s graduated driver’s licensing program does not meet national standards for these programs because it does not include: a visually distinguishable intermediate stage license; a limit on unsupervised nighttime driving for those in the intermediate stage; and a requirement that the driver be free of traffic violations for a specific period before he or she may move on to the next level of licensure (Impact of Partial Graduated Driver’s License Program…).

Rather than revoking licenses, which often leads to teens driving without licenses or insurance, it might help for the state to respond to violations by making teens wait longer to move to the next level of licensure. According to the journal, Injury Prevention, this could lead to fewer violations and safer driving down the road.

A study in Injury Prevention found that many teens and parents do not know about the nighttime driving restrictions involved in Kentucky’s graduated driver’s licensing program, and many of them are not providing the necessary number of hours of one-on-one driver training. Teens at the permit stage are getting too few hours of actual driving experience, which leaves them not ready for the intermediate stage when they may drive without an adult in the car.

The Allstate Foundation License to Save Report, developed in conjunction with the National Safety Council, “found that over the last 20 years, graduated driver licensing laws have already saved an estimated 15,000 lives.” Implementation of such laws in all 50 states could save many more lives and “could generate savings of $13.6 billion per year” (Insurance Journal).

So make sure you get all the driver’s training you can now. Get all the experience you can before moving on to the intermediate licensing stage. If your parent or other trusted adult is not giving you the help you need, then ask for help. It’s much better to get that help now than to have an accident!

Readers: Tell us what you think!    

If you are driving now and have already had an accident, how much extra are you now paying for vehicle insurance?

Is graduated licensing for teenagers a good idea? Explain why or why not?

 Do you agree or disagree that new drivers are more likely than more experienced drivers to lose focus while driving and not pay attention to the road?

Have you or someone you know been affected by a car accident involving a new driver?

How can you drive more safely? (Speed, risk-taking, courtesy, for instance.)?

If teens are going to be restricted further in their driving, do you think the law should be changed to require that adults who have had more than one accident in which they were at fault within a two-year period must pass road tests to keep their license?

Website Pick of the Week

Corresponding Post: Focus On Savings


Website: http://www.smartypig.com/

Reason: SmartyPig is a savings platform that allows you to create an online piggy bank, with a .70% interest rate. You can use it to save for specific purchases that would cost you much more if you charged them to your credit card and made only the minimum monthly payment. SmartyPig is FDIC-insured and use of this program teaches the principle of savings first.

Kiplinger’s Personal Finance Magazine named opening a SmartyPig savings account as one of the “4 Online Tools to Fix Your Finances”.

Readers: Tell us what you think of SmartyPig.com. Explore the SmartyPig Web site and watch some of the video tutorials. Then tell us some of the savings goals you could set. Do a little math, and discover the answer to these interest rate questions:

1. If you saved $15 a month in a savings account, and made at least .70% interest monthly, how much money would you have invested by the end of the year? And how much would you have at the end of the year? How much would you have made in interest?

2. Now answer the same questions, but instead of $15 per month, you are saving $25 per month.

3. How is taking advantage of interest in your savings account like receiving free money? And how much interest would you need to make to keep ahead of inflation, so your money truly grows?

 __________________________________________________________

Source: Gerstner, Lisa. (2012, February). 4 Online Tools to Fix Your Finances. Kiplinger’s Personal Finance. Retrieved January 18, 2012, from http://www.kiplinger.com/magazine/archives/4-online-tools-to-fix-your-finances.html.

Video Post: Focus on Savings

Video: Resolutions 2012- 4 Steps to Saving 

“Resolution 2012—4 Steps to Saving More” (MoneyTalksNews) highlights the following four key steps to saving money: (1) Set specific goals; (2) Pay yourself first; (3) Find extra money that you can save; and (4) Grow big through compound interest.

Quick Thought:

While not the favored way to “spend” your money, putting some of that holiday cash or your babysitting paycheck into a high-interest savings account will pay off in the long run. Think of the independence you will gain by being able to pay for your own summer wardrobe or your own tank of gas. Think how responsible you will look to your parents, and how adult you will seem. The key to saving money is to remember this phrase: “short-term pain, long-term gain.” You are putting off the little things you could buy now (new video game, a couple of song downloads, a smartphone app) in order to really enjoy a larger purchase later (new car, new wardrobe, new computer, new gaming system).

Readers: What savings tips or tricks do you have to offer?

Website Pick of the Week

Corresponding Blog Post: How to Include Finances in Your New Year’s Resolution


Website: http://www.youngmoney.com/millionaire-calculator/

Reason: This calculator from Young Money helps you figure out how much you will need to save per month to become a millionaire by Age 65. However, you can change every variable—age of retirement, interest rate, etc.—to show the impact of working longer or taking more or less risk in your choice of investment on how long it will take you to become a millionaire.

Also on this Web site, you can find calculators on saving for college, compound interest, and other types of savings.

Readers: Did you give this calculator a try? What did you think?

How to Include Finances in Your New Year’s Resolution

Welcome to 2012!

A new year reminds us that we can have new opportunities and new beginnings. We actually can do this any time, but many people make plans at the end of the year to reach personal goals during the following year. Usually termed “New Year’s Resolutions,” these goals can include losing weight and stopping smoking. Another goal that is, not surprisingly, extremely common is to have more money. You could resolve to make more money, but that isn’t always possible, especially in a bad economy. Therefore, I am presenting several examples of potentially effective New Year’s resolutions that you might want to consider setting for yourself.

1.      Start with a clean record. A girlfriend of mine applied for a loan to buy a used car for college. She was shocked to learn that someone had stolen her identity and opened credit cards in her name. Even more surprising was the fact that the thief was a male and he consistently had no trouble using the card. If she had checked her credit report a few years earlier, this problem could have been fixed more easily.

Get your free annual credit report at annualcreditreport.com or call (877) 322-8228. If you find any problems in your report, make sure you contact the credit bureaus (http://www.fightidentitytheft.com/credit_bureaus.html) and your personal credit issuers in writing (Gerry Willis, CNNMoney.com). Or contact one of the three major credit reporting bureaus, Equifax, Experian, and TransUnion, now, another of the three in four months, and the last of the three in eight months. Staggering your requests among the three bureaus throughout the year can allow you to keep an even closer watch on your credit.

2.      Re-balance your budget. If you were planning on losing weight, you wouldn’t take in more calories than you could burn, right? It should also be obvious that you also cannot save money if you spend more than you make. Take the time to figure out how much money came in and how much you spent in 2011. If you find that you are paying for everything in cash and have no record of what you spent in 2011, begin keeping a record for the next 30 days of what money comes in and goes out. If more money was going out than coming in, re-evaluate what you need versus what you want and cut back appropriately. Cutting out expensive premium coffee every day can help a lot. So can fixing your own meals.

3.      Reduce your debt. List all your debts in order of interest rate, from the highest rate to the lowest; or arrange them by the number of payments you have left, starting with those you can pay off most quickly. Once your first debt is fully paid, scratch that debt off your list and go on to the next. Follow this process until all your debts are paid. Paying off the debts with the highest rates first will reduce the number of years you will have payments and will save you thousands of dollars in interest (Steven B. Smith, youngmoney.com).

Remember that the financial habits you develop in high school will likely be with you for the rest of your life. If you find yourself saying you don’t have money to further your education or to buy a home 10 or 15 years from now, it could be because your monthly debt payments are more than 15% of your income. Set a goal to be debt-free by the end of the school year and keep your debt low in future so you are able to save and invest your money.

4.      Start an emergency fund. It is surprising how many college students use “payday” loans for their car expenses. These loans have an annual interest rate of 240% to 390% APR. Wouldn’t you like to make this much interest on your savings or investments? If you set aside an emergency fund, on the other hand, this disaster could be prevented. 

If you have an emergency fund, great! Add more to it if necessary. If you don’t yet have money set aside for an emergency, begin today, even if you can only set aside a few dollars a week. If you ever have an unexpected problem such as your car breaking down—and this happens to all of us at least a few times in our lives—you will be far more prepared because you have the money set aside (Steven B. Smith, youngmoney.com).

5.      Eat out less often. In high school, I was surprised at how many of my friends regularly stopped at fast food restaurants after school. I’ve also been shocked at how many of my college friends buy meal plans for almost all of their meals, but still eat out a lot. If they added up all the money they spent at restaurants a year, it would probably come to a couple thousand dollars. One thing I learned was that eating a healthy snack during the day would help me avoid the temptation to eat out all the time. Not only have my savings prospered, I’ve also been healthier.

6.      Reduce your impact on the environment. Think about doing simple things to protect the planet. This could include carpooling to school and using public transportation whenever possible; unplugging your charger as soon as your phone is done charging; turning off the lights after you leave a room; and/or taking a shorter shower. This not only helps the environment, it also helps with your budget.

READERS: We want to know what your thoughts are on our subject...

Have you made any New Year’s resolutions related to your finances? If so, what are they?

Would the above resolutions hinder or assist you with your non-financial resolutions?  

What could you do to help make sure you keep your resolutions?

What other money resolutions could you set to help you manage your money better?