Sunday, July 31, 2016

Help Kids Rehearse The Right Script For Awkward Money Scenes With Friends

Rehearsing a Money Script

Kids often don’t realize, remember, or care that financial circumstances, values, and goals can differ widely among friends. That can lead to some awkward money scenes:

Scene 1:

Child 1: “Come on, let’s go get pizza. It’s only 10 bucks!”
Child 2: “...”

Scene 2:

Child 1: “Come on, your family’s loaded, can’t you just pay for all the movie tickets?”
Child 2: “...”

When thrust in the role of the Child 2, does your kid know the right lines? Without a script, knee-jerk feelings of shame, pride, defensiveness, or intimidation might elicit the wrong responses.

So it’s time for a little playacting at home. What’s the money story like when your kid is with friends? Walk through the likely scenes. Work out the lines together.

“No thanks. I brought my lunch today. But I can still go with you, and we can eat together.”

“No. I’m on a budget, and I’m saving up to buy a (used) car. Let’s watch Netflix instead.”

Help your kid find the right words for the right situation.

When it comes to your kid’s awkward money scenes with friends, ditch the improv. Rehearse a solid script to help your child steal the show.


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

Saturday, July 30, 2016

Teach Kids To Keep A Backup Stash Of Cash On Hand (Or In Shoe)

Cash Stash Shoe

Yes, it makes sense for your kids to embrace the modern world of digital money. After all, you’re not raising financial Luddites.

But the modern money world isn’t without it’s digital hiccups:

“I’m afraid your card has been rejected.”

“Too many incorrect PIN attempts. Your card has been disabled for security!”

“This card won’t swipe, the strip is damaged.”

“Sorry, we only take cash here at The Old School Cafe.”

Modern world or not, there’s going to be a time or two when your kid’s card, or smartphone, or smartwatch, or next generation fancy pants payment gizmo just doesn’t cut it.

Don’t leave your kids stranded. Make sure they know to always keep a little backup stash of cash in the wallet, the purse, or — the old standby — the shoe.

Don’t fight financial technology, but don’t blindly trust it either. Teach your kids to have a Payment Plan B. That’s B as in Benjamin.


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

Friday, July 29, 2016

Have Frequent Thoughtful Money Discussions With Your Kids

Money Habits As Function Of Money Discussions

See chart.

It’s simple. The more thoughtful money discussions you have with your kids, the more good money habits they will have.

Enough said.


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

Thursday, July 28, 2016

Teach Your Kids To Lie About Their Mother’s Maiden Name

Pinocchio and Security Question

Q: What is your mother’s maiden name?
A: Nincompoop.

Q: What is the name of your home town?
A: Narnia.

Q: What was the name of your elementary school?
A: The School of Hard Knocks.

Yes, those are all lies!

Help your kids come up with their own lies too. Ones they can remember.

Why?

So they can use those memorable lies for security questions, like the ones online banking sites require.

Why do that?

Because in the brave new world of social media, lots of people can figure out your mom’s real maiden name, your real hometown, your real elementary school, your real first pet’s name, your real you-name-it.

So teach your kids to come up with some big fat lies for online security questions instead. It will keep their money safer. And that’s the truth.


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

Wednesday, July 27, 2016

Make A Difference Not A Photo Opp With Your Child’s Charitable Efforts

Camera Focused On Giving

“It is one of the beautiful compensations of this life that no one can sincerely try to help another without helping himself.”
~Ralph Waldo Emerson

Under the best of circumstances, philanthropy benefits both the benefactor and the beneficiary.

But sometimes charitable efforts can go horribly awry. Mix in a little human vanity, and the results can be even more tragic.

Judith Lasker describes a classic case of a tragic charitable outcome: orphanage visits. Why? The end result:

  • Orphans forming short term ties that are repeatedly broken.
  • Orphanage owners running money making scams.
  • Un-screened visitors putting orphans at risk.
  • Owners maintaining sub-optimal conditions to drive more donations.
  • Draining funds from other more effective methods.

Judith challenges her readers: “Would you volunteer abroad if you had no cameras with you?”

All of which leads to two thoughts you’ll want to keep in mind when choosing charitable efforts with your kids:

  1. Beware unintended consequences. Do the research. Will your efforts perpetuate or even deepen the problem for the beneficiaries?
  2. Beware vanity. Maintain focus on the recipient. It’s not about you. Ironically, the less it’s about you, the better you and your kids will feel. Note the key word “sincereley” in Emerson’s opening quote.

So before you engage your kids in a hands-on philanthropy exercise, ask yourself the hard question: are you making a difference or a photo opp?


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

Tuesday, July 26, 2016

Perform a Family Grocery Audit with the Kids

Grocery Waste Audit List

Most kids have no idea how much groceries cost. They also have no idea how much food — and, therefore, how much money — is wasted each week (40%?!).

To help your kids appreciate everyday expenses, reduce unnecessary waste, and save money, try conducting this simple family food audit exercise together.

Here’s how it works:

  1. Post the latest grocery receipt. The next time you return from the grocery store, pin your receipt on the fridge door.
  2. Check off consumed items. At the end of each day, help the kids go through and place a check mark next to the items on the receipt that were fully consumed.
  3. Track discarded value. Whenever an item is thrown out, help the kids write down the value of the amount wasted next to its entry on the receipt. Tossed the whole item? List the full price paid. 30% wasted? List 30% of the price. Very rough estimates will do.
  4. Tally up the damage. Before the next big grocery outing, sit down with the kids and total up the numbers. Eye opening, isn’t it?

Talk about what was wasted and why. Talk about the opportunity cost: “Hey, we could have gone to a movie with that money!” Talk about changes you can make to your shopping habits to waste less, and save more.

Then, make sure to take your kids with you on the next grocery store visit. I bet your newly deputized food auditors will keep you in line.


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

Monday, July 25, 2016

Start A Money-You-Could-Have-Earned Account For Your Kid

Spend Save Forgo Jars

“Dad, can you help me out? I can’t save enough to buy the phone I want.”

“Actually, you could have saved enough easily.”

“What do you mean?”

“All those paid odd job opportunities around the house — like the attic cleaning last week — that you passed on.”

“Oh those? That’s just a couple of bucks here and there.”

“Actually, to be precise, you’ve passed on $639 bucks since the beginning of the year.”

“How do you know that?”

“It’s right here in your M.Y.C.H.E. account.”

“What the heck is that?”

“It’s your Money-You-Could-Have-Earned account.”

Maybe if your kids saw an ongoing tally of the odd job earnings they’ve been passing up, they’d be more eager to seize work opportunities.

Lots of parents offer their kids paid odd job opportunities around the house (above and beyond the unpaid expected chores of course). The tasks completed and payments earned are diligently tallied up and tracked by both parties.

But what about the jobs that go uncompleted and the payments that go uncollected? What if you tracked the ongoing balance of money that your kid could have earned over time? Keep it in a notebook, a spreadsheet, or online. Review it with your child periodically.

That way, your kid will learn that a couple of bucks earned “here and there” adds up to a lot of bucks down the road.


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

Sunday, July 24, 2016

Clip Familiar Financial Articles For Your Kids

Wall Street Journal Chip Article

Does your kid love gaming? Nvidia Shows Off Its New Titan X Chip for Gamers.

Chipotle? Short Sellers Dine On Chipotle.

Movies? Studios Live and Die by the Tomato.

Clothes? Lululemon Still Has Room to Run.

What do all of those recent articles have in common? They’re little snippets of financial education dressed up in topics your kids will find interesting. Mini lessons in business, investing, and economics are hiding among graphics cards, burritos, movie reviews, and exercise pants.

Let’s face it, finance is boring when it isn’t truly personal. That’s why so many people wait until they’re older to take an interest in finance. Unfortunately, finance is suddenly very personal when you’re facing big financial trouble.

Don’t let your kids discover an interest in personal finance the hard way. Help them develop a comfort and familiarity with financial concepts early on.

  • Clip financial articles on topics familiar to your kids.
  • Discuss them over breakfast or later in the day.
  • Tease out the financial lessons behind the familiar headlines.

Make finance personal for your kids now, so it won’t be a stranger when they need it later.


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

Saturday, July 23, 2016

Don’t Let Augmented Reality Lure Your Kids Into Augmented Spending

High Tech Money Lure

“Hey, Haley, what’s up with all the purchases at Hoagie Haven today?”

“Oh, we were hanging out there for a couple hours playing Pokemon Go. It’s a Pokestop and someone kept dropping Lures there, so we hung out to capture Pokemon. I figured I should buy some stuff since I was hanging out there so long.”

“Hmm, I see… Let’s talk about who that someone dropping Lures might be, shall we?”

Every new technology invariably includes some hidden new way to lure money out of consumers’ wallets. Augmented reality, the new technology powering Pokemon Go, is no exception.

Augmented reality based games overlay computer generated characters and objects on the real world. This means players often venture out into the community as they participate in the game.

Guess where merchants would like players to end up? That’s right. The cash register.

In the case of Pokemon Go, businesses have already used Pokemon Lures to attract potential customers to their location. The word is that businesses will be able to purchase Pokestops soon. No surprise there.

You can be sure that as more players seek to level up their scores, more merchants will be figuring out ways to level down their wallets.

So if your kid is venturing into a new technology like the augmented reality in Pokemon Go, it’s time to sit down together and explore all of the potential money lures lurking within.

That way, you can make sure your kid’s augmented reality experience isn’t accompanied by augmented spending.


Friday, July 22, 2016

Teach Teens How To Use Prepaid Cards At The Pump

Prepaid At A Pump

“Dad, the gas station just stole all the money off my prepaid card, and now I’m stranded. Help!”

Uh, oh. The old gas station preauthorization aggravation situation!

  • Your teen swipes a prepaid card with $22.96 on it at the pump.
  • Not knowing how much gas will be pumped, the card reader device tries to preauthorize a healthy sum — often $75 — on the card.
  • The attempted purchase is declined because $75 exceeds the current balance.
  • An authorization hold for the $75 lingers on the card.
  • Boom! Your teen is out the funds for up to 30 days!

Yes, it’s outrageous. But that’s how the scenario often goes down. Huge bummer.

It’s easy to avoid though. Teach your teen to take the prepaid card into the gas station attendant and say:

“Please charge my card exactly $20 dollars for gas on pump number 7.”

In other words, make sure your teen knows to treat a prepaid card just like cash when at the pump.

That way, you won’t get that panicked call. You also won’t get talked into loaning your credit card to your teen for gas — which means your teen won’t be pumping money out of you either.


Thursday, July 21, 2016

Boost The Average Money IQ In Your Kid’s Circle Of Friends

Friends In A Circle

“You are the average of the five people you spend the most time with.”
~Jim Rohn

Your kids spend more and more time with friends as they get older and more independent. You’ve already noticed their behaviors rub off on each other. And that includes money behavior.

How do your kids’ friends handle money? What’s the collective average of their money behavior? How can you help raise that average without being too intrusive?

Lectures certainly won’t cut it, but shared experiences with friends might. Encourage your kids and their friends to pursue some mindful money activities together. Maybe they could:

What else can you think of?

The more thoughtful your child’s friends are with money, the more thoughtful your child will be with money. So think outside the immediate family box, and help raise the average within your kid’s circle of friends. A rising tide lifts all boats — your kid’s boat included.


Wednesday, July 20, 2016

Make Kids Really Save On A Bargain

Today’s fantastic family finance article is:

Discount tag


“Hey Dad, I just bought these shoes on sale for 20% off and saved $10!”

“Well, technically, you didn’t save anything. You simply spent $40 instead of $50. Yes, you spent $10 less than you could have, but you didn’t actually save $10. Your savings account didn’t increase at all, did it?”

Eyeballs rolling, “Oh, Dad, you know what I mean. Sheesh, don’t be such a killjoy!”

And we wonder why our teenagers don’t talk to us any more...

If you want to keep the money dialog open, try this compromise: make your kid actually save the discount amount. In the case above, your kid would have to turn the ten theoretically saved dollars into ten real saved dollars by transferring that amount into a separate savings account, card, or jar. If not right away, then before the next purchase can occur.

That way, your kid can spend less and really save more at the same time. Now, that’s a bargain.


Tuesday, July 19, 2016

Show Kids How To Ask For Bargains Without Haggling

Today’s fantastic family finance article is:

Kid Asking Question


It doesn’t hurt to ask. In fact, it often pays.

And that’s a good bargaining lesson for kids to learn early. So let your kids listen in the next time you ask a salesperson or customer service representative:

  • Can you waive this fee since I’ve been such a loyal customer?
  • Can you match this price I found elsewhere?
  • Can I return or exchange this item since it didn’t match what I expected?
  • Can you extend my free trial since I didn’t get a chance to try it yet?
  • Can you give me a better rate if I pay in advance or use a different payment method?
  • Do you have any special offers or discounts available?
  • Is there a way we can work out a price that’s more affordable?

You never know, right?

The human on the other end of a transaction just might have some latitude to give. Of course, your kids should know there’s more leeway when you’re pleasant and credible. That’s the difference between asking and haggling (or harassing).

One more important reminder for the kids: never lie when bargaining, or you’ll pay the price. Someday.


Monday, July 18, 2016

Run A Family Phone Insurance Company

Today’s fantastic family finance article is:

Teen Pointing to Broken Phone


“Dad, I jumped in the pool with my phone.”
(Uh, oh. Get the rice out!)

“Mom, my phone went through the wash!”
(Into the rice again!)

“Dad, I landed on my phone while horsing around, and the screen got smashed!”
(It’s always “got smashed”, never “I smashed”...)

“Mom, my phone flew out of my pocket while riding my bike, and a car ran over it!”
(Yeah, phones and pigs fly!)

“Dad, I left my phone at the lacrosse field!”
(That field that’s now 4 hours in the rear view mirror...)

The chances are, one of your kids is going to have a phone mishap — at least once.

That’s what makes phones such a great way to teach kids about the principles of insurance: paying into a pool of money to cover a potential (or inevitable!) financial loss, learning what’s covered and what’s not, paying a deductible if the loss occurs, even incurring a rate increase under certain conditions.

The problem is: most commercial phone insurance plans are a rip-off. The rates are high, and many of the many common teen scenarios (see above) aren’t covered.

What to do?

Start your own family phone insurance “company” instead. Here’s how:

  1. Create a common family insurance fund. A dedicated money jar, account, or prepaid card.
  2. Define the coverage rules. Is any mishap covered? What happens to multiple offenders? A rate increase? A cheaper phone replacement? Is there a deductible — a portion of the replacement cost that the family member has to cover out of pocket?
  3. Bill each family member monthly. The payments go into the common fund.
  4. Cover phone mishaps from the common fund. The “victim” pays the deductible, and the fund picks up the rest. If the fund is dry, the victim may have to wait or settle for a cheap interim phone.
  5. Apply any profits to family fun. Running a large surplus in your fund because your kids are freakishly responsible? Use the excess cash above and beyond a reserve for a fun family outing like a dinner, a movie, or a trip to the ice cream parlor.

So, next time you hear: “Dad, I dropped my phone in the toilet!”

If the rice treatment doesn’t do the trick, you can calmly say: “File a claim.”


Sunday, July 17, 2016

Teach Teens To Spot Teaser Rate Tricks

Today’s fantastic family finance article is:

Cat Teaser


“Deception may give us what we want for the present, but it will always take it away in the end.”
~Rachel Hawthorne

“Hey, Dad, that looks like a great deal!’

  • Switch to our phone and save 50% on your monthly service plan! Mumble, mumble, activation fee of $30/line, mumble, mumble, savings end May 31, mumble, mumble, other monthly charges apply, mumble, mumble.
  • Credit card with 0% interest rate! Mumble, mumble, 20.99% after 15 months, mumble, mumble, rate jumps instantly with first missed payment, mumble, mumble.
  • TV and Internet bundle for just $50/month! Mumble, mumble, $80 setup charge, mumble, mumble, standard rates apply beginning month 7, mumble, mumble.
  • Prepaid card with no monthly fee! Mumble, mumble, purchase transaction fee $2, mumble, mumble, decline fee $1, mumble, mumble, ATM fee $2.50, mumble, mumble.

Can you spot a classic teaser offer with your teen today?

Pick it apart together. Read beyond the introductory tease. Sift through all the mumble jumble to determine whether the offer is really a good deal in the long run.

Make sure your kids know a good deal is more than just a good first impression.


Saturday, July 16, 2016

Help Your Teens Find Paid Gigs In The Neighborhood

Today’s fantastic family finance article is:

Neighborhood Road of Money


Does your teen have access to a pickup truck, a strong back, and 60 minutes to spare?

Boom. $40.

That’s what Jayne L. across town is paying to move 5 clay planters.

How would your teen know that?

Nextdoor.com. Here’s the post with the opportunity:

Hi. I have a 5 large clay planters that I would like to move from Menlo Park to Stanford. Will happily pay $40 to anyone who has a truck and a driver’s license who will move them for me. Just e-mail me via nextdoor.

Who’s Jayne L.? She’s your neighbor. Haven’t met? Just click on the profile. If she’s in your immediate neighborhood, you’ll see exactly where she lives, how long she’s lived there, and all her activity on NextDoor.com. Now you can decide whether this is a safe paid gig for your teen.

Nextdoor.com is a private social network for you and your neighbors. All neighbors have to verify their address and use their real names. It’s a great resource for teens who are looking to earn a little extra cash from neighbors offering miscellaneous paid gigs.

Your teen can also find paid neighborhood gigs on Craigslist. Just narrow the search down to your local neighborhood, select the “Gigs” category, and filter on “paid.”

Here’s where you and your teen need to be much more careful though. Unlike on Nextdoor, it can be hard to know who you’re dealing with on Craigslist. The photobooth attendant job with a known party supply company offering $20 an hour and extensive training? Looks like a winner. The “modeling” gig requesting the submission of inappropriate pictures? Um, no!

Not comfortable going the online route? There’s always the good old fashioned way: pound the local pavement. Your teen can go door to door to known neighbors and simply ask. Need some yard work done? Need someone to feed the cat while on vacation? Need the dogs walked? Need some babysitting? Your teens won’t know what’s possible without asking.

So, the next time your teens hit you up for some cash, tell them to go ask the neighbors instead.


Friday, July 15, 2016

Prompt The Philanthropy Discussion With 20 Great Giving Quotes

Today’s fantastic family finance article is:

Charitable Hands


Philanthropy is a complicated word with a simple definition: giving money and time to help make life better for other people.

If you’re struggling to successfully communicate the importance of philanthropy to your kids, try the words of somebody else instead. Here are 20 quotes to jump start the conversation:

  1. “No act of kindness, however small, is ever wasted.”
    ~Aesop
  2. “Service to others is the rent you pay for your room here on earth.”
    ~Muhammad Ali
  3. “Blessed are those who can give without remembering and take without forgetting.”
    ~Elizabeth Bibesco
  4. “Be charitable before wealth makes you covetous.”
    ~Thomas Browne
  5. “A man there was, and they called him mad; the more he gave, the more he had.”
    ~John Bunyan
  6. “The miracle is this — the more we share, the more we have.”
    ~Leonard Nimoy
  7. “Only a life lived for others is a life worthwhile.”
    ~Albert Einstein
  8. “It is one of the beautiful compensations of this life that no one can sincerely try to help another without helping himself.”
    ~Ralph Waldo Emerson
  9. “To know even one life has breathed easier because you have lived. This is to have succeeded.”
    ~Ralph Waldo Emerson
  10. “The highest use of capital is not to make more money, but to make money do more for the betterment of life.”
    ~Henry Ford
  11. “No one has ever become poor by giving.”
    ~Anne Frank
  12. “The best way to find yourself is to lose yourself in the service of others.”
    ~Mahatma Gandhi
  13. “You give but little when you give of your possessions. It is when you give of yourself that you truly give.”
    ~Kahlil Gibran
  14. “If you haven’t got any charity in your heart, you have the worst kind of heart trouble.”
    ~Bob Hope
  15. “Ask not what your country can do for you. Ask what you can do for your country.”
    ~John F. Kennedy
  16. “Money is only unused power. The real purpose of wealth, after food, clothing and shelter, is philanthropy.”
    ~Leon Levy
  17. “A little thought and a little kindness are often worth more than a great deal of money.”
    ~John Ruskin
  18. “For it is in giving that we receive.”
    ~St. Francis of Assisi
  19. “It’s not how much we give but how much love we put into giving.”
    ~Mother Teresa
  20. “You can’t live a perfect day without doing something for someone who will never be able to repay you.”
    ~John Wooden

Try this: write each quote on a note card, and pull a new one out each night to discuss during dinner.

Before you know it, philanthropy will become a regular part of your kid’s vocabulary, and that Giving Jar will take on a whole new meaning.


Thursday, July 14, 2016

Teach Kids Procrastinating Doesn’t Pay. Wait...Maybe It Does!

Today’s fantastic family finance article is:

Money Decision Alarm Clock


Don’t put off until tomorrow what you can do today.
~Benjamin Franklin

You’ve probably already admonished your kids countless times for dilly dallying when it comes to schoolwork, writing thank you notes, cleaning their rooms, you name it.

But what about when it comes to money?

Time to crack the whip there too, right? Moving too slowly with money means:

  • Higher prices. You didn’t book in advance, so you missed out on the early bird special and will be paying a higher fare.
  • Excessive interest. You waited too long to pay it off in full by the end of the month, so now you owe interest on top.
  • Late fees. You waited too long to get your payment in by the deadline, so you’ll be paying a penalty too.
  • Bad terms. Your waited too long on several payments, so you can’t qualify for the best terms next time and you’ll be paying higher rates.
  • Lower wages. You waited to long to learn that new skill, so you’ll be taking a lower paying job.
  • Lost returns. You waited too long to start investing, so you’ll be missing out on years of compound growth.

On the other hand, moving too quickly with money means:

  • Higher prices. You could have waited for that closeout sale three months from now and paid half price.
  • Excessive interest. You could have waited 6 more months and bought it outright with savings instead of buying it now on credit and paying extra in interest.
  • Impulse buys. You could have waited until tomorrow to realize you didn’t need or want that item you bought on a whim today.
  • Uncompetitive deals. You could have waited to look elsewhere for a comparable item and paid a lot less.
  • Scams. You could have waited to do a little research to avoid losing money to a known swindler.
  • Premature losses. You could have held that investment for ten more years and made a bundle instead of selling in a panic today and losing a bundle.

So, should you put off until tomorrow what you can spend today?

The answer is...

...wait for it...

...it depends!

Teach your kids to know when procrastinating with money pays, and when it doesn’t.


Wednesday, July 13, 2016

Transition Your Kid's Allowance To The Digital World

Today’s fantastic family finance article is:

Piggy Meets Ones and Zeros


There’s an app for this. There’s an app for that.

Well, it turns out this and that now includes allowances and chores. Check out a list of over 30 online allowance and chore management options here.

Why transition from the classic piggy bank filled with tangible coins to a digital solution filled with abstract numbers?

That’s precisely the discussion topic on today’s featured episode of the Digital Dads podcast.

Sure, there’s the convenience factor of automating another routine task for insanely busy parents, but it’s really about something much bigger. It’s about doing a better job delivering a modern financial education to our kids.

A thoughtful digital allowance system, whether it’s in a spreadsheet or an app, will make it simpler to teach your kids critical personal finance lessons like:

  • The effort required to earn a dollar.
  • The importance of tracking spending.
  • The power of compound interest.
  • The pain of debt.
  • The responsibility of paying bills.
  • The effectiveness of goal setting.
  • The opportunity of matching contributions.
  • The wisdom of setting aside saving (and giving!) before spending.
  • The inescapable reality of digital money.

Listen to the discussion in the podcast and see what you think. Weigh in with your opinions on the Digital Dads Facebook group.

Yes, a piggy bank is a good start. But if you don’t move on, your kid will be stuck in the mud when it comes to modern finance.


Tuesday, July 12, 2016

Teach Teens Time Is Money And Vice Versa

Today’s fantastic family finance article is:

Time and Money In Hand


“Time is money says the proverb, but turn it around and you get a precious truth. Money is time.” ~George Gissing

We’ve all heard the phrase “time is money.” But what does that really mean? And why does it matter?

Time is the most precious of all resources. Once spent, it can never be reclaimed. Money is certainly a critical resource too, or as Zig Ziglar once said: “Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the ‘gotta have it’ scale.”

So, given that time and money are two of life’s most important resources, discussing the relationship between the two might help your teen get the most out of both someday.

Here are eight time and money conversation starters. Four explore how money is time. Four more consider the inverse.

  1. Time spent being idle is money that could have been earned in wages. “You could have taken that babysitting job down the street and earned $40 instead of staying home to play video games.”
  2. Time wasted while making a product or delivering a service is money that could have been earned by producing and selling more units. “You could have mowed two more lawns and made twice as much today if you had really hustled.”
  3. Time learning a valued skill is money in the form of greater future earnings. “You could have spent a couple hours each day last summer learning how to build an app and then picked up a paid programming gig this summer.”
  4. Time investing in the market is money earned in compound returns. “You could have contributed some of your first summer job earnings to a Roth IRA and accumulated thousands of dollars tax free by the time you were old like Dad.”
  5. Money available to pay someone to do a task for you is time freed up for family, leisure, or a more rewarding task. “You could have paid your little brother to help with the mowing so you could spend more time drumming up new business and earning more for the two of you.”
  6. Money in reserve is time you have to make the right decision. “If you had some savings set aside to cover living expenses, you could have waited and negotiated for a better job out of school instead of accepting that first lousy offer in a panic.”
  7. Money in reserve is time you have to correct a bad decision. “If you had some savings set aside you could quit that job with the abusive boss or leave that abusive partner immediately and take the time required to find a better situation.”
  8. Money in reserve is time you have to pursue your dreams. “If you had more money set aside, you could go ahead and ditch that lousy job and spend full time days building your own thing.”

Can you think of others?

A thoughtful discussion with your child about money takes time, but it costs little and pays off handsomely. That’s time — which is money — well spent.


Monday, July 11, 2016

Let Kids Know Credit Card Purchases Are Loans

Today’s fantastic family finance article is:

Not My Money Card


“Neither a borrower nor a lender be.” ~William Shakespeare

...until your next credit card purchase.

Do your kids realize you’re borrowing money every time you make a credit card purchase?

Probably not.

The next time you use a credit card around the kids, strike up a conversation like the following:

“Do you know who just bought lunch?”

“Um, you did. I just watched you pay with your card.”

“Actually, I didn’t pay for it yet.”

“Uh, Dad, are you OK!?”

“The bank paid for it. This credit card lets me borrow the bank’s money. So every purchase is a loan I have to pay back later.”

“Oh. I get it. When do you have to pay them back?”

“By the end of the month.”

“What if you forget?”

“Then I have to pay them back the amount I borrowed plus interest.”

“You mean like the teeny interest I get in my savings account? That’s not so bad.”

“No, like 330 times as much interest!!!” 1

“Ouch! Good to know.”

That’s a conversation you can’t have too often.

Remind your kids that every credit card purchase is a loan. And if they don’t pay it back in time, they’ll be the borrowers they simply can’t afford to be.


1 Assuming a bank savings account interest rate of 0.06% and an average student credit card rate of 19.8%.


Sunday, July 10, 2016

Get Your Kids High On Charitable Giving

Today’s fantastic family finance article is:


Finally, there’s a “drug” we can turn our kids on to without feeling guilty: charitable giving.

fMRI data from brain studies reveals that altruistic behavior lights up the pleasure centers of the brain like the nucleus accumbens. That’s where neurons that release the pleasure chemical dopamine live. The bottom line: charitable giving is neurologically similar to receiving a winning lottery ticket.

So make sure your kids know that doing good feels good. It delivers a “rush.”

An important note from the study: the more control the subjects exerted over their decisions to give, the greater the pleasurable response. That’s an important message for parents to heed. Go ahead and be an altruism “pusher” by giving your kids plenty of encouragement and inspiration, but avoid forced giving scenarios or you’ll dampen the buzz.

So, get your kids hooked on charitable giving early. It’s a habit you — and society — won’t want them to kick.


Saturday, July 9, 2016

Let Your Kid Choose The Spend-Save-Give Allocation

Today’s fantastic family finance article is:

Slice of Quiche


Every parent knows it’s wise to teach kids to set aside some money for saving and giving before getting down to the spending. It’s a habit that will serve your kids well as adults.

But what percentages should you require your kids to withhold out of every chore, allowance, birthday, or holiday dollar?

None!

Let your kids decide instead.

But only after a thoughtful conversation.

What’s the saving for? A bike? That first (used) car? A share of college expenses? A Roth IRA contribution?

“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.”
~Thornton T. Munger

What’s the giving for? Animal rescue? The homeless? A favorite charitable organization?

“No one has ever become poor by giving.”
~Anne Frank

What’s the spending for? Needs? Wants?

“He who buys what he does not need, steals from himself.”
~Swedish Proverb

Now, with all that in mind, how would your child like to split every dollar?

There’s really only one wrong answer here: zero percent in any of the categories. Beyond that, it’s all good. And the allocation can always be adjusted over time. After more experiences, more thoughtful discussions.

So let your kids choose the spend-save-give allocation. Their choices just might surprise you. Pleasantly.


Friday, July 8, 2016

Turn “Can You Buy Me...?” Into “Can I Afford...?”

Today’s fantastic family finance article is:

Checkout Stand Money Meltdown


The dreaded checkout stand.

Here it comes.

Wait for it...

“Dad, can you buy me some gum?”

“Mom, can you buy me this candy?”

“Pllllleeeaaassse!”

Cue the meltdown.

It’s time to turn “Can you buy me...?” into “Can I afford...?”

How? Let your kids start managing some of their own money instead of begging for yours.

That means your kids need some source of modest income: an allowance, paid chores, odd jobs, birthday money, holiday money, or any combination thereof. Whatever works for your family, your values. The source isn’t nearly as important as the ownership and responsibility.

Make it clear up front that the purchase at the checkout stand is now their decision, not yours. If they have enough money saved up, they’re free to make the purchase.

Spending Mom and Dad’s money? Easy peasy. Spending their own money? Not so fast.

The transformation is magical. Financial ownership will take your kids from money meltdown to money mindfulness.

Now if you hear anything at all at the checkout stand, it’ll be something like: “Dad, I’ve saved $10.95, so I’d like to spend $1.50 on this pack of gum.”

Ahhh. Music to the parental ear.


Thursday, July 7, 2016

Use A Water Pitcher To Explain Credit Card Utilization To Teens

Today’s fantastic family finance article is:

Credit Pitcher And Spending Glass


You: “To help maximize your credit score, you’ll want to minimize your credit utilization rate, targeting a range of 30% or below but above 0%.”

Your Teen: “Huh?! Whatever...”

To explain the optimal utilization strategy to your credit card toting teen, try this analogy instead:

You: “Imagine pouring water from a pitcher to a much smaller glass. If you pour all of the water from the bigger pitcher into the smaller glass, you’ll have a mess on your hands. So pour just enough to fill the glass, and leave the rest in the pitcher. Make sense?”

Your Teen: “Well, duh.”

You: “Good. That’s how I want you to use your credit card. The amount of water the pitcher can hold is your credit card limit. It’s the total amount you could spend. The water you pour into the smaller glass is the amount you actually do spend. The glass is about a quarter of the size of the pitcher. Any mess you make by overfilling the glass is the damage you’ll do to your credit score. So don’t overflow your glass, OK?”

Your Teen: “Got it.”

Keeping a low credit card utilization rate is critical factor when it comes to building a high credit score.

So, make sure your teen knows to leave plenty of water in the credit pitcher while filling a modest spending glass. That way, there’ll be no credit score mess to clean up later.


Wednesday, July 6, 2016

Warn Kids To Be Wary Of Indignantly Defended Fees

Today’s fantastic family finance article is:

Indignant Fee Defender


“The lady doth protest too much, methinks.”
~Queen Gertrude, Hamlet

In Hamlet, Shakespeare taught us to be skeptical when someone tries a bit too hard to defend a position. When the defense turns to indignation, it’s time to double down on skepticism and due diligence — especially in the financial realm.

Today’s article provides a perfect example from people peddling investments.

“How dare you question or fees!”

“Our fund managers are experts!”

“Our fund managers work hard!”

“Index funds are for plebeians!”

Thou doth protest too much!

Teach your kids to peer past the indignation and focus on the financial facts.

If the facts say “dumb” low cost index funds repeatedly outperform “smart” high cost mutual funds, stick with stupid.

The data doth speak the truth.


Tuesday, July 5, 2016

Make Sure Kids Know How To Get Money Out Before Putting It In

Today’s fantastic family finance article is:

Benjamin In Lock-Up


Putting your money into something is usually pretty easy.

A pocket. A purse. A piggy bank. A checking account. A savings account. A prepaid card. A stock. A bond. A mutual fund. An ETF. An automated portfolio.

Pulling your money out? Not always so easy.

There might be a market to make. A penalty to pay. A time to wait. A rule to follow. A fine print to find.

Pulling your money out of an investment can be hard — even impossible at times. See the robo advisor fine print example in today’s article.

The bottom line to share with your kids: know the liquidation rules going in, so there are no surprises coming out.


Monday, July 4, 2016

Light The Fuse Of Financial Independence For Your Child: 10 Tips

Today’s fantastic family finance article is:

Independence Day Sparkler


“Independence is happiness.”
~Susan B. Anthony

Happiness. Dignity. Freedom. Security. Financial independence is all those sweet things.

How can you make sure financial independence is in your child’s future?

Light the fuse early with these 10 tips:

  1. Explain to your kids why they should care about money in the first place.
  2. Make the connection between money and work in your child’s mind.
  3. Teach kids the harder they work the “luckier” they’ll be.
  4. Help your youngster secure an odd job around the house, neighborhood, or Internet.
  5. Outsource a few freelance gigs to your teen instead of to some random person on the Internet.
  6. Hone your teens interview skills at home with a mock hiring session.
  7. Convince your full time student to get a part time job.
  8. Teach your kids how to tell their dollars where to go instead of asking where they went.
  9. Teach your kids these automated micro-saving tricks.
  10. Get your teen started on investing early with a Roth IRA, a low cost index fund, and a parent match.

Why should you bother? Susan summed it up nicely for girls and boys alike:

“I think the girl who is able to earn her own living and pay her own way should be as happy as anybody on earth. The sense of independence and security is very sweet.”
~Susan B. Anthony

Spark the financial independence flame in your child today.

Independence. Happy kids. Happy parents. Happy Fourth!


Sunday, July 3, 2016

Show Your Teen How To Spot Identity Theft With A Free Credit Report

Today’s fantastic family finance article is:

Teen With Evil Credit Twin


Did you know your teen has three credit cards, a mortgage, medical debt, a boat, and overdue child support payments?

Neither did your teen. Until you checked his credit report.

A credit report lists your teen’s history of credit accounts and inquiries. Teens have nice clean credit reports that typically won’t be checked for years. That makes teens a favorite target for identity thieves.

Find out if your teen’s identity has been stolen. Sit down together and follow these simple steps:

  1. Visit https://www.annualcreditreport.com. Don’t be fooled by other sites. This is the only official site directed by Federal law to supply free credit reports to consumers.
  2. Supply personal identifying information. Fill out form with your teen’s name, birthdate, recent addresses, and social security number.
  3. Request up to 3 reports. Check the desired boxes next to each of the 3 consumer credit reporting agencies: Equifax, Experian and TransUnion.
  4. Answer challenge questions to access each report. Each of the agencies will present a series of questions about your personal history to verify your identity before presenting the report. Questions might probe about social security number, previous addresses, phone numbers, co-residents, etc.
  5. Dispute any inaccurate information. Credit reporting agencies are obligated to remove or correct inaccurate, incomplete, or unverifiable information, usually within 30 days. The Experian report I pulled had links right on the online report for initiating a dispute.

You can access each of the reports for free every 12 months. If you stagger individual requests to each of the three agencies, you can check in on your teen’s credit history every four months.

That will keep your teen’s evil credit twin on his toes.


Saturday, July 2, 2016

Teach Kids To Separate Savings From Income Before Spending

Today’s fantastic family finance article is:

Referee Separating Boxers


“Do not save what is left after spending, but spend what is left after saving.”
~Warren Buffett

Spending and saving are like two mismatched boxers. Spending delivers a knockout punch to saving every time. The two need to be separated, or spending will dominate. In fact, the best strategy is to never let saving set foot in the same ring.

How can you teach your kids to protect saving from spending? Simple. Automatically pull savings out of income first. Place a fraction of every allowance, chore, odd job, birthday, or holiday payment into a separate account, card, or jar where it can be safely protected from the long arm of spending.

If you can condition your kids to run away from the fight between saving and spending, they’ll be financial champions.


Friday, July 1, 2016

Use A Hybrid Card Strategy To Help Teens Build Credit And Stay On Budget.

Today’s fantastic family finance article is:

Credit Prepaid Card Hybrid


There’s a saying:

“You can run into debt. But you have to crawl out.”

Credit card debt is a disastrous burden we all want to nip at the bud for our kids. But a solid credit history is a benefit we want to cultivate early.

Credit cards build a credit history. But they don’t prevent debt.

Prepaid cards prevent debt. But they don’t build a credit history.

So which one is right for your inexperienced teen who’s susceptible to overspending and has no credit history?

Both.

Here’s the recipe:

  1. Use a prepaid card for variable discretionary expenses — everyday stuff. Load it with a weekly budget. When it’s gone, it’s gone.
  2. Use a credit card for fixed recurring expenses — like a monthly subscription or an auto-insurance payment. That way, the full amount due each month is never a surprise. Pay it in full. Every time.

It’s the best of both worlds for your teen.

Run a tight, debt-free ship every week.

Crawl further up the credit score charts every month.

Win. Win.