Tuesday, August 23, 2016

Remind Teens To Treat A Reputation Like Gold

Melting A Golden Reputation

There’s one financial asset that every teen has an equal opportunity to grow and protect: a reputation. Unfortunately, many teens don’t make the connection between reputation and financial well-being until it’s too late.

A consistent track record of reliability, honesty, and diligence translates directly into increased earning power. Anyone who’s hired an employee or contracted a service knows that truth.

Yes, knowledge and skill are important, but employers and customers place enormous value on a solid reputation. And a bad reputation can overshadow even the most exceptional capabilities.

A solid reputation can take years to build, and just seconds to destroy. Your golden financial asset can drop to zero in a heartbeat.

Sadly, the Games of the 31st Olympiad showcased an extreme example. Ryan Lochte built a golden reputation over 32 years of athletic discipline and achievement. He rightfully parlayed that reputation into millions in financial security through decade long relationships with top-tier sponsors like Speedo and Ralph Lauren. He destroyed that multi-million dollar asset in one night of partying and deceit in Rio.

Make sure your teens watch Ryan’s tearful interview with Matt Lauer for the full, raw effect.

That’s an important cautionary meltdown for your teens to see before that next edgy social media post. That next overindulgence. That next half-truth. Stop. Think. What you’re about to do or say — is it really worth it? Ryan found out the answer the hard way.

Remind your teens to guard a reputation like the valuable gold that it is.

Want to turn these tips into action? Check out FamZoo.com.

Monday, August 22, 2016

Waive Adult Child Rent In Exchange For Retirement Savings

Growing Up and Nest Eggs

Staying in the nest has recently become the most common living arrangement for young adults.

According to Pew research, the 32.1% of 18- to 34-year-olds living in a parent’s home now just edges out the 31.6% who have the second most common living arrangement — living as a married partner or co-habitant in one’s own household.

Meanwhile, separate research shows that 29% of the young adults in that same age group are not saving any money month to month.

Living at home as a young adult. Not saving. That’s a bad, bad combo.

You could collect a stiff rent, but that defeats the purpose of coming back to the nest in the first place.

So, here’s a clever arrangement to consider: make your sweet rent deal be contingent on proof of retirement contributions. That means your young adult living at home has to maximize any 401(k) match opportunity at work and max out an IRA to secure your free (or reduced) room and board.

An alternative deal to consider depending on circumstances: require a significant monthly payment toward reducing credit card or student loan debt. Once the debt is paid off, you can switch over to the retirement contribution rule.

The bottom line: If your young adult kids are staying in the nest rent-free now, they better darn well be building up a nest egg for later.

Want to turn these tips into action? Check out FamZoo.com.

Sunday, August 21, 2016

Reward Your Kids With Mom/Dad Dollars

Mom/Dad Dollar Template

“Dad, can you pay me to do the household chores?”

“No. Do you think I’m made of money?!”

You’re not made of money, but money can be made of you.

Instead of compensating your kids in real money, try Mom/Dad dollars instead.

Since you control the currency, you control the exchange rates. Maybe one Dad Dollar equals 15 extra minutes on the computer. Maybe 1 Mom Dollar equals an outing to the ice cream parlor for a single scoop.

Make a little redemption chart with rewards that make sense for your kids. Focus on experiences and time spent together.

As for the currency, here’s how you can print up a few of your own custom Mom/Dad dollars. Start with your own copy of my Mom/Dad Dollar template in Google Docs by clicking here. Then:

  1. Select the Insert > Image… menu item and pull in an image of your bright shining face.
  2. Click on the image of your face to select it.
  3. Click on Image options... in the toolbar.
  4. Move the transparency slider to the right so you can see the dollar bill beneath your face.
  5. Resize and position your face so it fits nicely over the hole in the dollar bill.
  6. Move the transparency slider back to the left so your face goes back to being opaque.
  7. Select the Arrange > Order > Send to back menu item to place your face behind the dollar bill image.
  8. Select the File > Print menu item to produce your money masterpiece.

Cut to size with scissors.

Congratulations. You’re literally printing money.

Paying for chores just got a whole lot easier.

Want to turn these tips into action? Check out FamZoo.com.

Saturday, August 20, 2016

Use Teen Purchase Stats To Set Fast Food Boundaries

Average Fast Food Purchase Amount By Kids

It’s inevitable that your newly minted teen will start making outings to the local fast food joint with friends. Like it or not, teen fast food junkets are a classic rite of social passage. (Relax. There are worse ones for sure!)

In fact, our FamZoo data corroborates the transition. Fast food jumps from the third most popular category of spending at 9% of transactions for pre-teens to the most popular category of spending at 22.1% of transactions for teens. Brace yourself.

Since you’ve probably learned the wisdom of picking your battles with teens by now, a ban on the fast food outings probably isn’t your best bet. But setting some reasonable boundaries is always a good idea.

The problem is, you’ve been eating so healthy lately (right? ahem!), you can’t remember what a reasonable fast food budget is. So we’ve collected some stats to help you. As you can see from the chart, the monthly average has hovered between 6 and 7 dollars for the last 8 months.

Given the data, calculating a budget around $6.50 per outing seems reasonable.

That said, if you’re still determined to squelch your teen’s fast food habit altogether, you could just use the data as your benchmark figure for the brown bag lunch bribe.

Either way, it’s handy to know what the typical teen fast food fix costs these days. (You might want to adjust your budget too. Wink. Wink.)

Want to turn these tips into action? Check out FamZoo.com.

Friday, August 19, 2016

Play The Sweep-To-Savings Game With Your Teen (1 Minute Video)

Watch this 1 minute video to learn about an easy way to turn frugal spending and regular saving into a game for your teens. I call it the Sweep-To-Savings game.

Want to turn these tips into action? Check out FamZoo.com.

Thursday, August 18, 2016

Kick Your Kid’s Expensive Shiny Object Habit With A Refurbished Device

Refurbished Computer

Objectivius Shinium Syndromus. Shiny Object Syndrome.

Does the tiny scratch on the case really matter? Cover it with a sticker.

Does matching the latest memory and CPU specs really matter? Not for browsing, homework, and Facebook.

Does the extra 2.1 inches of diagonal high res display really matter? Not for watching YouTube and Netflix.

Does it really have to be shiny and new? Not if the focus is on real requirements and value instead of vanity. Vanity is like a tax.

Your kids will learn these truths if they live them.

The next time your child has a legitimate need for an electronic device, go the refurbished route:

  • Find a reputable source. See if the desired manufacturer sells refurbished equipment directly (Apple does), or try a reCommerce site like Gazelle.com. Google around for reviews by others who have used the service.
  • Check the inspection process, return policy, and warranty options. There’s always some risk with used equipment, so make sure there are solid assurances of quality and a reasonable return policy for defective devices.
  • Cash in on your old device. At minimum, you can responsibly recycle your old device. At best, you can get paid for it. See if you can earn credit or cash for a device that meets reuse standards.
  • Share the savings. To sweeten the initial bitterness, consider letting your child pocket a fraction of the difference between the refurbished item and a comparable new one.

Let your child learn firsthand that getting the job done doesn’t require the leading edge of technology. Most times, the slightly trailing edge is more than adequate. And a much better value.

Help your kids kick their obsession with latest shiny gadget, and they’ll be accumulating shiny coins in their bank accounts instead.

Want to turn these tips into action? Check out FamZoo.com.

Wednesday, August 17, 2016

Walk Your Teen Through Your FICO Score Before That First Apartment

Low FICO Apartment

“Dad, can you be a cosigner on my apartment lease? They said I’ll need you because my FICO is under 620. Oh, and Dad, what’s a FICO?”

Renting an apartment is often the first financial transaction your teen encounters that relies a credit score. Don’t let that be your teen’s first introduction to the term “FICO.”

Educate your teen about the most widely used credit score ahead of time. To make it memorable and engaging, walk your teen through a familiar, real world example. Your own score.

Haven’t checked it lately? These days, you might be able to get your FICO score free from your credit card company or bank. Otherwise, you can get it free from Discover — whether you’re a customer or not. Just visit creditscorecard.com. (Be sure you’re comfortable with the privacy policy and terms first though.)

With your latest report card in hand, step your teen through each of the five categories that contribute to your score. Explain how your financial decisions have impacted each:

  1. Credit Mix (10% of score): “No real message for you here. Showing that I can handle different types of debt — a credit card, a mortgage, a car loan — makes me look like a better credit risk. But I wouldn’t want you to take take on unnecessary loans here to try to goose your score. Besides, this is the least important category of the five.”
  2. New credit (10% of score): “Hmmm, I shouldn’t have opened a new credit card, shopped around for home loans, and taken on a car loan all at once. All that new debt activity makes me look a bit desperate financially.’
  3. Length of credit history (15% of score): “Churning those credit cards early on to chase points wasn’t such a good idea. It would have been better for me to just hold on to one card consistently after I got out of college. Then I’d appear less risky.”
  4. Credit Utilization (30% of score): “I’ve been putting too many purchases on my credit card lately. Using up most of my available credit each month makes me look risky. I should shift more everyday spending to my debit card.”
  5. Payment History (35% of score): “Ouch, that one medical bill that we forgot to pay went into collections recently and really hurt us. Mom and I need to be more organized here.”

Why not come clean on your FICO score to your teen? Your teen will learn valuable lessons from your mistakes or be inspired by your stellar record. Either way, the sooner your teen understands how a FICO score works, the sooner your teen can move out of the house. Bonus.

Want to turn these tips into action? Check out FamZoo.com.