The Economics Behind Valentine’s Day

The Economics Behind Valentine’s Day 

Delaney Wimmer 

With Valentine’s Day fast approaching, millions of people throughout the U.S. are opening up their wallets to an expensive night. According to the National Retail Federation (NRF), Valentine’s Day is the fourth-holiday people spend the most money on. The year 2020 is predicted to set a new spending record of $27.4 billion, an increase from $20.7 billion in 2019.

These numbers aren’t that surprising when you think about the amount of advertisement that is set The Economics of Valentine's Day." These participation percentages can vary within age groups as 62% of individuals between 35-44 celebrate, 60% between 25-34, and 58% between 18-24. Other age groups out of the listed have lower percentages.
around Valentine’s Day. Marketers and companies have taken advantage of the idea of signaling to create an entire market, which has proven successful as 55% of Americans celebrate Valentine’s Day. This idea of signaling involves the message behind gifts and how the importance of this message influences consumers to purchase gifts. Professor Chris Coyne introduces this idea of signaling along with other economic principals found on Valentine’s Day in his video "

In addition to the portion of the population spending for this day, the amount being spent is immense as well. The average person will spend $196.31 on all Valentine’s Day activities, an increase from 2019 of $161.96. It is also found that men spend almost twice as much as women do for this particular holiday. These purchases are not exclusive to solely spouses, but many people buy gifts for family members, friends, co-workers, pets, and themselves. Even those without a special someone for Valentine’s Day spend; one-third of singles buy a little something for themselves.


Shoppers are spending most of their money on “traditional” gifts. A predicted $5.8 billion will be spent on jewelry, $4.3 on a night out, $2.4 billion on various candies, $2.3 billion on flowers, and $1.3 on cards. The majority of these purchases are made at department or grocery stores, however, online shopping has become much more popular in recent years.

People are always looking for a way to make this day just as special, but less weight on their wallet. There are many ways to create Valentine’s Day that doesn’t have such a high price tag. Many restaurants have Valentine’s Day discounts or two-for-one meals. Cooking at home, even a more
expensive home-cooked meal, can be cheaper than eating out. For those looking to give significant others a bouquet of flowers, one suggestion is to buy a single “statement” rose over an entire bouquet to cut the cost. Purchasing flowers from florists can also be pricy, so buy flowers at your local grocery store for a cheaper yet still elegant option. In addition, rather than paying for the delivery of flowers, skip the delivery man and do this part yourself. Although a little more unconventional, many find themselves celebrating after the date has already passed. Grocery stores such as Walgreens, Walmart, or Target mark down the “leftovers” typically between 50-90 percent within days. Being more aware of how much you’re spending and the cheaper options available can help you save money this upcoming Valentine’s Day.

Works Cited

“14 Ways to Save on Valentine's Day.” Clark Howard, 7 Feb. 2020, clark.com/deals-money-saving-advice/ways-to-save-on-valentines-day/.

Amadeo, Kimberly. “Shoppers Feeling the Love This Valentine's Day.” The Balance, The Balance, 7 Feb. 2020, www.thebalance.com/happy-valentine-s-day-retailers-feeling-the-love-3306043.

Hedberg, Tim. “A Free Market Valentine's Day.” America's Future Foundation, 14 Feb. 2012, americasfuture.org/a-free-market-valentines-day/.

Shearman, J. Craig, et al. “Confident Consumers and Broader Buying Lead to Record Valentine's Day Spending Plans.” NRF, 30 Jan. 2020, nrf.com/media-center/press-releases/confident-consumers-and-broader-buying-lead-record-valentines-day.

Investing

Written by: Braden B.

Investing is a way to expand your money by putting it into different financial shares, schemes or property. It was something that not many kids begin to do in high school but I believe everyone should start investing early and should be taught how to invest in the right companies and at the right times. 

One benefit to investing early is compound interest. Compound interest is the interest earned on interest. By constantly reinvesting your money you are increasing your ROI (return on investment) exponentially. This compound interest allows you to grow your money supply over a period of time. Investing early also improves your spending habits. It allows you to focus on your budget and  cut expenses when needed. Investing develops disciplined spending habits, which makes you a smarter spender. A survey done by the American Institute of Certified Public Accountants found that over ¾ of millennials want to have the same clothes, cars, and gadgets as their friends. And over half of these people have to use a credit card to pay for basic necessities like food. This group of people had poor spending habits because they were focused on getting what their friend had and weren’t thinking about their needs. If they were purchasing food constantly with a credit card that much means that they weren’t in a good financial state to pay for that food up front. Investing early can limit these situations and provide you with a clear view on what to spend your money on and when to spend it.  This graph to the right shows the impact of when you start investing. As you can see Jack, Jill and Joey all invested the same about: $200. However, Jack started investing 10 years before Jill and 20 years before Joey. As you can see from the graph Jack has made way more money off of these investments that Jill and Joey has. This graph came from money.usnews.com. In order to create the most ROI possible you have to be educated in making smart investment decisions. That’s why I believe we as students should be more exposed to investing strategies in school. This way we can learn about it and apply it to our lives to confidently place our money into healthy companies. 

Overall investing is a great way to earn extra money, and investing early allows you to maximize the amount of money you can make. Investing at a young age gives students the opportunity to learn about positive spending habits while also being a step above other students in the real world. 

Works Cited

“9 Charts Showing Why You Should Invest Today.” U.S. News & World Report, U.S. News & World Report, money.usnews.com/investing/investing-101/articles/2018-07-23/9-charts-showing-why-you-should-invest-today.

Folger, Jean. “5 Advantages of Investing in Your 20s.” Investopedia, Investopedia, 29 Jan. 2020, www.investopedia.com/financial-edge/0212/5-advantages-to-investing-in-your-20s.aspx.

Pritchard, Justin. “Compound Interest Makes Your Investments Grow.” The Balance, The Balance, 6 Dec. 2019, www.thebalance.com/compound-interest-4061154.

Wang, Jim, et al. “The Massive and Surprising Power of Starting Investing Early.” Best Wallet Hacks, 20 Jan. 2020, wallethacks.com/investing-early-trumps-everything/.

The Purpose of a Credit Score

The Purpose of a Credit Score
Written By: Colin Kaehler

You may have seen one of the numerous commercials showcasing how some apps can improve credit scores in minutes, but what even is a credit score? A credit score is a statistical number that decides the creditworthiness of a consumer based on their credit history. Companies use credit scores to compute the probability that the individual will repay their debts over the selected time. These credit scores range from 300-850, and a higher score represents a greater amount of financial trust attached to the consumer. In a time where our country is at an all-time debt collectively, it’s important for money lenders to know they will get their money back from those borrowing. Therefore, the higher your credit score, the more opportunities you will have to purchase pretty much any product you want in the future.

Now, since your credit score is determined by your reliability to pay on time, there are obvious and easy ways to improve your credit score. This includes; paying all bills promptly, paying off any debt, keeping balances low on credit cards, applying for new credit cards only when needed, and keeping unused credit cards open (Experian.com). Firstly, paying bills on time gives you a good track record of being trustworthy with your finances. Thus, banks and people loaning money to you will feel better knowing you will return their investment plus interest on top. Secondly, paying off debt increases your credit score because if you have debt it shows that you’re unreliable when it comes time to pay. Thirdly, you’ll want to keep the balances on your credit cards as low as possible. By having a larger card limit and only spending a small amount of that every month, your credit utilization rate will drop. You can find your credit utilization rate by taking the total amount of money you charge on your cards per month and dividing it by your total credit limit. The lower the utilization rate, the better, because it shows lenders you don’t max out cards and know how to handle your finances appropriately. Fourthly, don’t apply or open new credit cards if it’s not needed. Although opening more accounts will increase your credit limit and could potentially increase your utilization rate, it will also tempt you to overspend. Thus you would go into debt and be deemed not trustworthy for credit. Fifthly, it’s a very smart strategy for anybody with a credit score to keep unused accounts open. This is because if you don’t use it, you don’t have to pay for anything and the account just adds to the credit limit but not your credit charge. Therefore, your dividend in the utilization rate would increase making the rate even smaller and better your chances for purchasing products in the future.

In conclusion, a credit score is a very important part of your financial success and you should understand at a high level what makes a good credit score. With your good credit score, you will be able to get better finance options when buying a house, cars, or any other big product. Without a decent credit score in the range of 630-689, you most likely will have to pay high-interest rates on any money you borrow from a bank or someone. This might cause you to fall into debt and you send even further into the hole. So, start to improve your credit score as soon as possible to give yourself the best chance to succeed in the future.

Works Cited

“How to Improve Your Credit Score Fast.” Experian, 31 Jan. 2020, www.experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/.

Kagan, Julia. “Credit Score.” Investopedia, Investopedia, 31 Jan. 2020, www.investopedia.com/terms/c/credit_score.asp.

O'Shea, Bev, et al. “Credit Score Ranges: How Do You Compare?” NerdWallet, 19 Dec. 2019, www.nerdwallet.com/blog/finance/credit-score-ranges-and-how-to-improve/.

401(k) vs. IRA: Different Types of Retirement Accounts

401(k) vs. IRA: Different Types of Retirement Accounts
Written By: Rithwik Mathur

As young adults we endlessly hear about planning out our life and future. Lately, I bet the talk is mostly about college and applying for student loans. However, today let’s talk about retirement. What exactly is a retirement account? What are the different types of accounts? Even though the majority of us won’t be retiring anytime soon we should still have some knowledge about how retirement works. There have been many instances where we hear “savings after retirement” either in commercials for a financial advisor or a retirement plan through a company. This article aims to show the importance of retirement funds and accounts and an explanation of the two main types. There are so many options for retirement accounts and it can be a little confusing sometimes. We won't go into every specific detail, nonetheless, by the end of this piece you will have a good understanding of the two main types of accounts: 401(k) and IRA.



We all know saving is important but why? More than one in five (21 percent) don’t save any of their annual income. This is a significant issue as the goal should be to not have to work to make a living and live successful lives when retired. Additionally, this shows the number of people that live paycheck to paycheck. 40% of Americans can't cover a $400 emergency expense. Although understandable this is still an issue in itself. What lifestyle changes/modifications can we make in order to be ready to face emergencies? What do you think we can do to be ready for retirement?

Retirement by definition is “withdraw from one's position or occupation or from active working life.” Essentially, a time in your life when you feel like there is no reason to work. Specifically, from a financial point of view. Retirement and the term “financial independence” are often used interchangeably. Retirement is achieved when you have sources of income that do not have to be earned by working. These funds are typically in certain accounts that one creates during their time of work. It’s important to know about these accounts and set them up in order to have a smooth and comfortable life after retirement.

Many of you have heard of 401(k). Most likely you heard your parents talk about it while they were talking about work “stuff”. You see 401(k) plans are through an employer as opposed to an IRA which is an independent retirement account. When employers want to give employees a tax-advantaged way to save for retirement, they offer a 401(k) plan. Essentially employers allow their employees to contribute a portion of their income to a 401(k) account, furthermore, employers match a percentage of the contributions made to the 401(k) account. Contributions to your 401(k) account are made pre tax. Wow this seems pretty nice! Contributions compound tax free. Withdrawing from this account is taxed normally, however, these must be made after the age of 59 ½ or older. Again, this is all about investing in your future for long-term financial stability.

An IRA at its base is an account an individual person can set up. This retirement savings account is tax-deferred. Which means a taxpayer can delay paying taxes to some future period. This allows for much flexibility. These accounts are controlled by banks or brokerages. Fun fact: IRA’s allow account holders to own many different types of assets within the account. For example, stocks, bonds, and even real estate. These accounts are typically made for and used most commonly by small business owners and self employed individuals. These types of accounts provide similar opportunities as a 401(k) account to those without employers.

For further research into these two accounts and their various types I’d suggest reading this ARTICLE Which effectively answered the many questions I had about retirement accounts. Clearly, it's way more complicated than just putting “money aside” for old age. For those of you that know exactly what profession you will pursue, I suggest that you dive into figuring out how a person of the profession you want to pursue would set up their retirement account. Here’s a video to use as a base. Again, I am aware retirement is far from us, however, this information is good to keep in the back of the head so you are ready when the time comes and you can make the best decisions for yourself.

Works Cited

Anspach, Dana. “What Is Retirement?” The Balance, The Balance, 8 May 2019, www.thebalance.com/what-is-retirement-2388822.

“IRA vs. 401k.” Ubiquity, www.myubiquity.com/401k/ira-vs-401k/.

Prinzel, Yolander. “401(k) Vs. IRA: What's the Difference?” Investopedia, Investopedia, 5 Feb. 2020, www.investopedia.com/ask/answers/12/401k.asp.

Yochim, Dayana. “IRA vs. 401(k): How to Choose.” NerdWallet, 5 Feb. 2020, www.nerdwallet.com/article/investing/ira-vs-401k-retirement-accounts.

kathleen_elk. “Here's How Many Working Americans Aren't Saving Any Money for Retirement or Emergencies at All.” CNBC, CNBC, 14 Mar. 2019, www.cnbc.com/2019/03/14/heres-how-many-americans-are-not-saving-any-money-for-emergencies-or-retirement-at-all.html.

Economic Impact of the Coronavirus

Taylor Drees

With the world population of 7.7 billion, the chance of controlling viruses to prevent outbreaks become harder and harder every year. These new viruses are due to drug-resistant bacteria that are cultivated by the rising population. As the first virus outbreak of 2020, the Coronavirus, originating in China and spreading to nearby and across-the-sea countries. This isn’t the first time China has dealt with the Coronavirus. Back in 2002, there was an outbreak of Severe Acute Respiratory Syndrome (SARS) caused by the SARS Coronavirus. Within weeks, the virus had spread to 37 different countries, infecting 8,000 people worldwide, about 800 who had died (LiveScience). The symptoms of the virus back from 2002 and in 2020 is respiratory distress, contracted by person-to-person spread.

As an effect economically, the new outbreak is estimated to have China’s economy to decline by $62 billion in lost growth. This impact is much greater adding on to the 2019 year being their weakest in three decades caused by rising debt and failed trade war with the United States (CNN).

With this large outbreak, businesses had shut down to prevent further connections to the outbreak; however, this impacts people not being able to work and make money, but also prevents consumers buying goods and services. In order to prevent their economy from completely collapsing, major banks are working together to slow down loan interests and may even delay all payments for several months. With this transition, this will certainly give a break for businesses, but depending how long the coronavirus will be quarantined, the money the banks are losing will put a huge dent into the nation’s debt.

Of course the outbreak doesn't just hurt China’s economy, but also affects countries that receive exports from China. In 2018, China was one of the world’s largest exporters by value, exporting $2.294 billion (USD) worth of products according to the International Trade Centre. This causes major changes for the countries who receive those products. Depending on what those products are, they may be discontinued until the virus has been quarantined, or become a meer shortage. China’s biggest product exported in 2019 was electrical machinery (Workman). This category ranges from all uses in machines that help produce products in the industry field from the country importing, and simply the products straight off the shelves. There is also the flip side to the shortage in products. When China does solve the outbreak, countries may not trust to import products from China as they were potentially being held during the outbreak and can transfer the virus to other countries. Politically, the debate whether allowing these products allowed back into the importing countries will be condescending on the end where those countries will gain more power by unethically asking for lower prices to help their own economy or “brag” their disease control center would never allow for such an action that would lead to an outbreak.

As for the fear of the outbreak continuing through products, there is also the consideration of the closed airports. January 25th, 2019, was Chinese New Years, the busiest time of the year for travel in China and nearby countries. Saying the coronavirus started in December 2019, with few people not knowing the potential outbreak of the virus, people continued to travel via cars, trains, buses, and airplanes. This means that whoever had traveled during the New Year’s season could have potentially been in contact with the virus, allowing it to spread exponentially. Airlines have been shut down with the opportunity cost of losing money with the thousands of cancellations. Air Canada, which primarily flies to Beijing and Shanghai, had to cancel 33 flights; however, was able to allow passengers directed towards the region to change or cancel further flights. Then there is also Air France, which to make up for the broken relationship between the company and passengers, some employees had volunteered to offer relief for those stuck in the affected regions to help evacuate (Pallini). The airline companies do not necessarily have a choice in the many cancellations in the matter causing a very great decrease in profit (not that airlines made much profit in the first place). With the loss in the budget, it may hurt the employment of the companies, as well as the money that keeps the quality high in order to compete with other airline companies. This may lead to higher prices however may prevent passengers from wanting to buy a plane ticket with the higher price plus the unknown potential of the outbreak.

Although what was mentioned will affect China’s economy for years, it was only the tip of the iceberg. There are still macro and micro details that will take place during the outbreak and once it is conserved. Currently, most donations and taxes are going towards the medical field to handle the stress it has put on the hospitals as well as research into how it has started and how to end it. After the outbreak, there will be further research into how to prevent another outbreak and procedures and audits for testing facilities on how they react with a similar scenario.




Works Cited
“5 Scariest Disease Outbreaks of the Past Century.” LiveScience, Purch, www.livescience.com/41478-scariest-disease-outbreaks.html.

“Export Impact For Good.” ITC, www.intracen.org/country/china/.

He, Laura. “The Coronavirus Could Cost China's Economy $60 Billion This Quarter. Beijing Will Have to Act Fast to Avert a Bigger Hit.” CNN, Cable News Network, 31 Jan. 2020, www.cnn.com/2020/01/31/economy/china-economy-coronavirus/index.html.

Pallini, Thomas. “At Least 73 Airlines Have Canceled Flights to China amid Coronavirus Fears - Here's the Full List.” Business Insider, Business Insider, 6 Feb. 2020,
www.businessinsider.com/airlines-canceling-changing-flights-to-china-amid-coronavirus-fears-2020-1#air-france-4.

Workman, Daniel. “China's Top 10 Exports.” World's Top Exports, 22 Jan. 2020, www.worldstopexports.com/chinas-top-10-exports/.

Money Doesn’t Grow ON Trees, but….it can grow LIKE trees!

Money Doesn’t Grow ON Trees, but….it can grow LIKE trees!
Written By: Jack Crary

Let’s face it, we’ve all had random thoughts of what it might be like to be a millionaire. We dream about the toys we would buy, the mega-house we would own and the vacations we might take. How will we become a millionaire? Will we pick all the right numbers in the Wisconsin Powerball lottery? Doubtful! Will our great, great uncle Hank leave us all his money when he dies? Doubtful! Will an armored truck full of cash tip over in front our house spreading millions of dollars across our lawn? Doubtful! The best chance to become financially stable, maybe even a millionaire, is quite simple. The minute you get a “real” job, whether that is after high school or college, invest in your company’s 401(k) plan. Don’t wait a month, a year or 5 years. Do it immediately! A 401(k) plan is a benefit plan, offered by employers, where an employee can make contributions from their paycheck right into the plan. The contributions go in a 401(k) account and the employee gets to choose the investments it is invested in from the options provided by the plan. In many plans, the employer also makes contributions to an employees account by matching the employees contributions up to a certain percentage. (irs.gov). It certainly won’t be easy to give up some of your hard earned cash, but well worth it. Investing in your employer’s 401(k) plan at a young age will teach you discipline with money and allow your money to grow in ways you can’t even imagine - maybe even making you a millionaire one day!

If you invest in your employer’s 401(k) at a young age, you will learn discipline with money that will help you throughout your life. Imagine you start working at a “real” job at the age of 21, or right out of college, and your employer tells you they offer a 401(k) plan. If you start investing immediately, say somewhere between 5% and 15% of your paycheck, you won’t ever see the money so you won’t miss it. Over the years, the money you set aside builds up and then “BOOM” you have a great pot of money! It takes great discipline to do this. You have to be willing to give up some of life’s other pleasures today for a big sum of money later. For example, let’s say your daily routine includes going to Starbucks everyday for a $5 latte. If you can make your coffee at home and instead invest that $5 every day ($150 month) in your 401(k), you would have $11,000 in 5 years and $800,000 in 50 years (money.usnews.com). That is real money!




Secondly, If you invest in your employers 401(k) at a young age, your money will grow in ways that will blow your mind. If you invest at an early age instead of waiting 5, 10 or even 20 years after you start working, the amount of money you have will increase by huge amounts throughout the years compared to if you wait until your 30s or 40s to invest. The blue line shows how Jack started investing $200 per month when he was 25 years old. The green line shows how Jill started investing the same amount 10 years later than Jack and the red line shows how Joey started investing 20 years after Jack. As you can see, Jack ends up with twice as much money as Jill and five times as much money as Joey (money.usnews.com). Why does this happen? There is this thing called “compound interest”. Compound interest happens when the interest you earn on your savings begin to compound itself over the years. It’s like getting interest on the interest (www.americanfundsretirement.retire.americanfunds.com). Also, the money you invest isn’t taxed like regular income. That means that more money stays in your account and can make more money for you throughout the years (www.americanfundsretirement.retire.americanfunds.com). Finally, many companies have 401(k) plans where they will “match” some of the money you invest. That is free money that can grow and grow over the years. The earlier you invest, the earlier your company can start matching and giving you money to invest as well.

Now, for the ultimate question. When you get your first “real” job, are you going to IMMEDIATELY ask your employer for the paperwork to start investing in their 401(K)? Or are the hard, cold facts presented above not convincing enough? Maybe you think it is ridiculous to start planning and think about what kind of money you might have 40 years from now (www.thebalance.com)? Well, let me tell you, it’s never too early to plan for the future. Maybe you are worried the stock market will have some bad years and you will lose all the money you invested (www.thebalance.com)? Fine, you put $200 cash under your mattress every month and I’ll invest in a 401(k) plan and let’s see who ends up with more money in 40 years. Maybe you have other things in life you want to do - travel, buy season tickets to the Milwaukee Brewers, or own a huge house before you’re 30 years old - and investing in a 401(k) will take money away from that? I guess that’s your call and we all have to weigh our decisions in life. Maybe you don’t feel the income you earn will be enough to support a family if you move some of your money to a 401(k)? Remember, if you invest on day 1, you won’t ever know you had it so you won’t miss it. Or maybe you have other reasons? Just think about it.

Works Cited

“9 Charts Showing Why You Should Invest Today.” U.S. News & World Report, U.S. News & World Report, money.usnews.com/investing/investing-101/articles/2018-07-23/9-charts-showing-why-you-should-invest-today.

“Benefits of Starting Early.” American Funds, americanfundsretirement.retire.americanfunds.com/planning/plans/benefits-of-starting-early.htm.

“Definitions.” Internal Revenue Service, www.irs.gov/retirement-plans/plan-participant-employee/definitions.

Friedberg, Barbara. “How to Invest at Every Age.” The Balance, The Balance, 23 May 2019, www.thebalance.com/how-to-invest-at-every-age-4148023.

Identity theft

Identity theft
Written by: Mackenzie Sherman

In today’s modern world, online shopping is extremely popular. So popular, in fact, that stores have shut down, like ToysRus for example. Amazon has taken the lead in the most popular online shopping sites. But not all sites are reliable as Amazon. Some sites will steal your credit card information upon your purchase.

Some other scams will pop on your laptop as an ad, pressuring you to download it. But, when it does, it opens the doors to hackers for them to steal your personal information. If you receive an email, text message, or phone call asking you to ‘validate’ or ‘confirm’ your personal information, this is a sign that it is scam.

One way to prevent hackers is by getting a VPN or Virtual Protection Network creates a ‘tunnel’ of sorts, that keeps you totally private and keeps unwanted hackers from getting your information. Another way to stay safe is if you suspect you’ve been scammed, change your passwords on your bank account, and anything else that you feel might be hacked into.


Australian Competition and Consumer Commission. “Online Shopping Scams.” Australian Competition and Consumer Commission, 4 Jan. 2018, www.scamwatch.gov.au/types-of-scams/buying-or-selling/online-shopping-scams.

Australian Competition and Consumer Commission. “Identity Theft.” Australian Competition and Consumer Commission, 1 Aug. 2018, www.scamwatch.gov.au/types-of-scams/attempts-to-gain-your-personal-information/identity-theft.

“Shopping Online.” Consumer Information, 13 Mar. 2018, www.consumer.ftc.gov/articles/0020-shopping-online.

“The State of Online Shopping Fraud.” Experian, 9 Jan. 2020, www.experian.com/blogs/ask-experian/the-state-of-online-shopping-fraud/.