Wednesday, December 28, 2016

Make Kids Pay The Sales Tax

iPhone Receipt Showing Sales Tax

You want kids to appreciate the value of a dollar.

You want kids to be aware of how much things cost.

You want kids to share some financial skin in the game to encourage frugal behavior.

But kids can’t afford to pick up the full tab for everything.

The following transaction from our family finance site hints at a clever yet affordable solution to the dilemma:

10/22/2016 iPhone 7 sales tax -$72.97

Brilliant. Make your kids pick up just the sales tax instead.

In most states, the combined state and local sales tax is enough to make your kid take notice. If it isn’t enough in your state, you can always levy your own family sales tax and toss the proceeds into your family swear jar.

Making your kid pick up the sales tax for everything might be a bit over the top. Consider focusing on certain categories of spending instead. Sporting goods, clothing, toys, music equipment are some good examples.

Lots of kids don’t have a clue about how much things cost or that sales tax even exists. Sticking your kids with the tax bill on purchases is a clever and affordable way to make your kids mindful of both.

Want to turn these tips into action? Check out

Wednesday, December 21, 2016

Set Up A Smart Competition To Make Investing Lessons Fun For Kids

Chipotle Versus Index Fund Performance Comparison 2016

Buy a share of a favorite company’s stock for your child. That’s the time-honored technique for sparking an early interest in investing.

Why? It works. What kid wouldn’t want to own a piece of Disney? It’s the perfect way to turn the otherwise dry and abstract topic of investing into something personal and concrete.

There’s one big problem through. Betting on a single stock is a horrible investing strategy. It’s just gambling.

Case in point: my Chipotle chomping son was thrilled to receive a share of his burrito bingeing destination of choice last year for Christmas. This was shortly after the chain’s infamous E. coli debacle. We both knew the popular restaurant would rebound quickly as they tackled their problems. Furthermore, the wise counsel of Warren Buffett rang in our ears: “Be fearful when others are greedy and greedy when others are fearful.” Clearly a savvy investing maneuver on our part, right?


A year later, Chipotle is down over 27 percent. Doh!

The message for my son? The market is no place for his money. Way too risky. Way too hard to pick a winner.

Financial parenting fail. Right?

Not so fast.

We also bought him a piece of the overall stock market — a share of Vanguard’s VTI. As Jack Bogle says: “Don’t look for the needle in the haystack. Just buy the haystack!” In other words, there’s no need to struggle to pick individual winners. If you buy a piece of every stock in the market, you can’t help but scoop up all the winners too.

So how’d that work out?

VTI is up over 13 percent since then. Sweet.

Now, that isn’t to say your results will match. In fact, you might see the complete opposite.

Either way, setting up a little friendly competition between an exciting stock and a “boring” index will set the stage for ongoing concrete discussions with your youngster about critical investing principles like risk, volatility, and diversification.

The only sure bet? Your kid will wind up being a savvier investor as a result.

P.S. If you’d rather not hassle with setting up a custodial account for your youngster, consider a parent-paid investment account instead.

Want to turn these tips into action? Check out

Wednesday, December 14, 2016

Let Kids Gift Service Bucks Instead Of Stuff

Kid Service Dollar

I don’t want my kids to buy me any more stuff for birthdays or holidays.

But, I do want my kids to practice thoughtful gift giving and experience all of its benefits.

The answer? Kid service bucks.

Let your kids give you a voucher for a favorite service they can provide personally.

Like what? Culling through some anonymous transactions on our family finance site turns up an eclectic set of services that parents value. How do I know these services are valued? Because I can see parents are already paying top dollar for them!

Here are some favorites I found. They run the gamut from the practical to the quirky:

  • back scratches
  • hand drawn pictures
  • cleaning the fish tank
  • mowing the lawn
  • whacking the weeds
  • cleaning out and organizing drawers
  • washing the car
  • taking the car to the car wash (for driving teens)
  • babysitting younger siblings
  • planning and making their own school lunches
  • making mom’s or dad’s lunches for work
  • helping mom or dad cook dinners
  • making dinners
  • planning a week of meals
  • running errands
  • handling car pool pickups (for driving teens)
  • being awesome (that earned one kid $6 — clearly a high value service!)

See any you’d appreciate? Start dropping some hints to your kids. Maybe it’s time to “accidentally” leave a wishlist on the counter.

Kids can draw the vouchers by hand or make kid service dollars using the same technique I use for making Mom/Dad dollars.

Oh, and just in case my kids are reading: a handmade card and a few bike rides with Dad make the perfect gift for me!

Want to turn these tips into action? Check out

Wednesday, December 7, 2016

Browse Your Kid's Transactions For Great Gift Card Ideas

Mom holding phone with son's card transactions

Gift cards are the go-to gift for last minute shoppers — especially relatives chasing down that birthday or holiday gift for junior. Gift cards are easy to mail and more personal than cash.

That said, just going down to the local grocery store and plucking a card off the rack doesn’t feel all that personal or thoughtful. How do you know it’s a winner for your young recipient? How do you choose a card that’s unique and surprising, yet useful?

Do a little spending research on your subject.

For kids who use a checking account or prepaid card with parental online access, it’s easy and quick. Just browse through your child’s transaction history for clues.

Scanning through the recent purchases by my 14 year old son yields several instant winners:

  • A Newegg gift card — He built his own custom gaming PC a while back and is always upgrading parts. I see transactions for a memory upgrade and a new gaming mouse. I’m sure there’s more to come.
  • A Steam gift card — What’s a hot gaming rig without games? I’m seeing about a game transaction a month.
  • A Pizza My Heart gift card — Looks like that’s the local go-to spot for hanging with the buddies downtown.
  • A Tea For U gift card — There’s the time he got that $4 specialty tea downtown and later regretted it because of the ridiculous price! But he is quite the tea hound, and that might be a good surprise gift for guilt-free special occasions.

Boom. Instant winning gift ideas for Grandma S. and Grammy J. when they call at the last minute during the holidays. Like they do every year. :-)

Want to turn these tips into action? Check out

Wednesday, November 30, 2016

24 Prepaid Card Hacks For Teaching Kids About Money

Handy Tool Clamping Prepaid Card

If you’re among the growing ranks of parents using prepaid cards to put money safely in your kids’ hands, here are 24 tips for making the experience educational as well:

  1. Configure the card to avoid financial bullying.
  2. Teach your kid a simple secure PIN strategy.
  3. Challenge your kid to card fee bingo before first use.
  4. Use instant notifications to put some pain in cashless payment.
  5. Give your kid a prepaid card for online gaming, save $7,625.88.
  6. Use multiple cards to run your own private family banking system.
  7. Use a simple reimbursement process to make your kid aware of how expensive everyday life is.
  8. Use reimbursements to condition your kid to maintain a spending buffer.
  9. Turn the next treat outing into a mini budgeting lesson.
  10. Ding prepaid declines to train your kid to avoid future overdraft fees.
  11. Remind kids it’s 3 PIN strikes and your card’s out!!!
  12. Run your own family card reward program that racks up points for less spending.
  13. Play the Sweep-To-Savings Game with your kid.
  14. Show your kid how to avoid a ridiculous 14.2% tax on cash.
  15. Ding your kids for replacements to discourage cavalier card handling.
  16. Teach your kid to keep a backup stash of cash on hand (or under foot).
  17. Give your kid’s card a meaningful label to encourage the right habits.
  18. Give your kid’s allowance transfers a meaningful description to reinforce purpose.
  19. Compartmentalize money for different purposes on separate cards.
  20. Set up text alerts that report the balance after every transaction to stay on budget and tip off fraud.
  21. Lock the card when it’s lost or stolen or just in need of a little financial time-out.
  22. Teach teens how to use prepaid cards at the pump without massive hassle.
  23. Make teens pass the No Decline Prepaid Challenge before opening a checking account.
  24. Use a hybrid card strategy to help teens build credit while staying on budget.

Got your own clever prepaid card hack for kids? Share it!

Want to turn these tips into action? Check out

Wednesday, November 23, 2016

Enjoy Good Fortune And Good Health This Thanksgiving

Eye popping pumpkin pie.

My father’s side of the family traces its roots back to the McGilvrays in Scotland. Ever since I can remember, we’ve launched our Thanksgiving meal with these simple words of gratitude from Scottish poet, Robert Burns:

Some hae meat and canna eat,
  And some wad eat that want it;
But we hae meat, and we can eat,
  Sae let the Lord be thankit.
~ The Selkirk Grace by Robert Burns

What does it mean? Here are some clues: “hae” means “have”, “wad” means “would”, and “want” refers to lacking something.

So, the crude modernized translation we convey to our younger family members is:

Some have food but they can’t eat (perhaps they’re sick),
  And some would like to eat but they lack food (perhaps they’re poor);
But we have food, and we can eat,
  So let’s be thankful for our good fortune and good health.
(Dig in!)
~ “Bobby” Burns

May your family also be blessed with good fortune and good health.

Happy Thanksgiving from the Dwight branch of the McGilvrays!

Blog Announcement: A New Frequency For Family Finance Favs

As of today, I have published 322 consecutive daily posts on Family Finance Favs since my first article on January 7. It’s been challenging and rewarding.

Originally, my goal was to hit 365 straight posts before reassessing how often I publish. For a few reasons, I’ve decided to make an adjustment now rather than later.

  • First, I received two unsubscribes recently that cited too many emails. I want to help busy parents, not overwhelm them.
  • Secondly, tomorrow is Thanksgiving. I’d like to dial things back a bit for the holidays, so I can focus on my family without feeling the constant pressure of a daily writing deadline.
  • Third, I’d like to get back to writing more software on our family finance site. It’s a core passion of mine that has been sidelined of late. Besides, our ever growing population of families and backlog of enhancements demand more attention.

So, starting with today’s post, I’m switching over to a weekly cadence. After the holidays, I might adjust to a frequency somewhere in between. Let me know what you think.

Want to turn these tips into action? Check out

Tuesday, November 22, 2016

Teach Your Doll Loving Tween About Total Cost Of Ownership

Doll With Dollar Bill Eye

I noticed an American Girl doll purchase buried within an anonymous sampling of transactions today. A little deeper analysis on our family finance site reveals they’re still quite a thing with today’s tweens.

It reminded me of an old post I stumbled upon years ago. The 2010 article tackled the money-burning question: How much does an American Girl doll really cost? (I’d link to it, but the site has long since disappeared.)

The answer: much, much more than just the doll itself.

That’s because nobody buys just the doll. There are the inevitable accessories. Outfits, furniture, even a dog! Before you know it, you’re in for well over six times the initial cost of the doll.

Check out this eye-popping bill of materials from the 2010 article:

  • 1 America Girl doll: $95.00
  • 5 everyday outfits: $120.00
  • 1 fancy dress: $32.00
  • 1 bathing suit or ski outfit: $34.00
  • 1 toy puppy: $20.00
  • 1 doll-sized zip-up carrier: $58.00
  • 1 bed and nightwear: $100.00
  • 1 table and chair set: $75.00
  • 1 set of various accessories: $35.00
  • 1 hair care kit: $10.00
  • 1 tween-sized outfit to match doll: $65.00
  • Grand total: $644.00


I call that a personal finance opportunity. Time to teach your young tween about the total cost of ownership.

Have your doll enthusiast fill out a worksheet of all the “little” follow-on accessories envisioned. It’s a rare chance to introduce your youngster to the magic of spreadsheets around a captivating topic.

Seeing the grand total up front will be a revelation.

Offer a deal: you pick up the doll, and your youngster picks up the accessories.

Now watch that wardrobe — and the total cost of ownership — shrink!

P.S. Consider buying used instead. I know we have a bin of American Girl dolls stashed in the attic waiting to be redeployed. Don’t bother to hit us up though. They’re reserved for our grandkids :-)

Want to turn these tips into action? Check out

Monday, November 21, 2016

Nudge Your Kid's Charitable Impulses With Giving Allocation Data

Spend-Save-Give Allocations On FamZoo

Thanksgiving, the holidays, and New Year's provide the perfect backdrop for charitable giving discussions with the kids.

Should they be setting aside a portion of their own money for donations?

If so, how much?

As I’ve written before, I like the idea of letting kids make that decision. After a thoughtful conversation with you.

It’s a conversation worth revisiting periodically though. Kids mature.

Here’s how you can inject a little data into your next charitable checkpoint. I measured the average allocations for kids on our family finance site who split their income into multiple categories. The numbers:

  • 61.06% to spending
  • 27.68% to saving
  • 11.26% to charitable giving

How does 11% match up with your kid’s latest thinking?

There’s no right answer, but a little data might just be the nudge your kids need to up their charitable games this year.

Want to turn these tips into action? Check out

Saturday, November 19, 2016

Use A Parent Payment Plan To Hold Teens Accountable For Big Fines

Money Book


That’s how much one teen in our family finance community racked up in library fines. Ouch!

Of course, the teen didn’t have near that much money on hand to pay off the penalty. (And no emergency fund in place. Yet.)

This is where many parents would resign themselves to just paying the fine themselves. To compensate for letting their penniless teen off the hook financially, the parents might feel compelled to inflict more of an emotional penalty — extended lecturing, reminding, or, as teens like to call it, nagging.

Sigh. What parent needs more teen drama?

The parents of this teen, however, found a better way.

They paid off the $111 fine. But they also set up an automated $3 weekly deduction on their teen’s account. Payments roll into the parent’s account as weekly installments until the fine is fully repaid. Activity alerts on the teen’s card provide a steady drumbeat of reminders that library fines are not to be taken lightly.

That’s 37 automated nags that this teen’s parents won’t have to deliver personally.

Sweet. Accountability without the drama.

Want to turn these tips into action? Check out

Friday, November 18, 2016

Turn Why Into How When Kids Whine About Money (VIDEO)

Why Into How Video Player

Video Transcript

Hey, Bill here. As always, thank you for the nice mentions on social media.

Every parent’s heard it: “Dad, why can’t I have BLANK?”

The Lego set. The latest iPhone. The designer jeans. The high end gaming device. You name it.

So you reach for your standard “because”...

“Because we can’t afford it.”

“Because you don’t need it.”

“Because I said so.”

Because mom or dad’s the bad guy, right?

Well, don’t let your kid play the victim. Flip the script. Change the question from why to how.

“How can you earn enough to buy BLANK yourself?”

Maybe some odd jobs around the house.

Maybe some paid gigs in the neighborhood.

Maybe some simple freelance tasks.

Maybe creating and selling some creations online.

Suddenly, you’re not the bad guy any more.

You’re the friendly facilitator because you turned why into how.

The funny thing is, after kids figure out the how, and put in all that effort to earn enough money, they often realize that BLANK really isn’t worth it after all.

How cool is that?

Want to turn these tips into action? Check out

Thursday, November 17, 2016

Stop Birthday Shopping For Your Kid's Friends

Birthday Card From Parent Revised

“Oh yeah, Dad, Johnny’s birthday is today so he’ll need a gift...”

How many times have you been suckered into the last minute birthday gift scramble by your kids?

Well, if your kids are at least into their tween years, I have a new answer:

Not. My. Problem.

Hey, Johnny is cool, but he’s my son’s buddy, not mine.

So here’s the new birthday present protocol:

  • Set a birthday present budget. Decide on a reasonable limit that makes sense for your family’s situation. Remind your youngster: a thoughtful selection always means more than an impersonal one — no matter how modest the price range. If your kids want to spend more than the budget, you can invoke the Premium Price Rule and have them pick up the difference.
  • Provide the funds. Hand over the cash, credit your kid’s card, or reimburse the precise amount after the fact. A prepaid card loaded with limited funds works well for online purchases in particular.
  • Get out of the way. Let your kid own the gift selection and the shopping. Beyond chauffeuring when necessary or vetoing in extreme cases, your involvement should be minimal.

Viola. A birthday gift for Johnny. A responsibility gift for your child. A stress reduction gift for you. Trifecta!

Want to turn these tips into action? Check out

Wednesday, November 16, 2016

Play Gratitude Pictionary With The Family For Thanksgiving

Playing Gratitude Pictionary On Thanksgiving

Looking for a novel, fun way to express gratitude during Thanksgiving that engages the whole family?

Try a round of “Gratitude Pictionary” at the table this year.

Here’s how it works:

  • Prop up an easel if you have one, or just use a large sketch pad braced against a wall.
  • Let everyone know they’ll be drawing something for which they are grateful. The more unobvious, the more fun.
  • Remind family members not to blurt out their ideas beforehand and to think of some backups just in case picks overlap.
  • As each family member draws, the others will try to be the first to guess what it is.
  • Kick it off with your own gratitude drawing to get the ball rolling. Keep sketching until someone guesses right.
  • Rotate turns with the pen until everyone around the table has had a shot.
  • Encourage family members to explain their gratitude choices as they’re identified. You might gain some interesting insight!
  • Having fun? Go around again! :-)

Try it as a closing activity over dessert.

Be sure to take pictures of everyone with their gratitude drawings. Your photo album will serve as a nice little keepsake catalog of the things your family truly cherishes.

Want to turn these tips into action? Check out

Tuesday, November 15, 2016

Let Kids Blow Their Own Money On Gum

Kid Blowing Gum Money Bubble

The old checkout stand gum gambit. Your kids play it well. They wait until you’re harried at the checkout stand. Then they hit you up with the old:

“Dad, can I have a pack of gum? Just one little one? Pllllleeeaaassse?”

We’ve already discussed how to sidestep the checkout stand meltdown by maneuvering the purchase decision out of your hands and into your kid’s. You’ll find the precise script here.

But what if your kids play the old “other parents don’t make their kids buy their own gum” card?

No worries. I’ve got some data from our family finance site to help you call that bluff.

It turns out we see lots of these little gum transactions. In fact, so many that “gum” bubbles up near the top of the common keyword list when we anonymously analyze transaction descriptions.

A quick little analysis of hundreds of gum related purchases recorded by parents in our IOU accounts over the last year yields these fun facts:

  • The average gum purchase amount was: $2.88
  • The youngest purchaser was 3 years old.
  • The 7 to 12 age range is the sweet spot for gum purchases with 12 year olds having the most transactions.

Oh, and warn your kid about leaving those wrappers everywhere. At least one kid got docked with this penalty:

-$5.00 Left bubble gum wrappers on counter


I wonder what the old left-gum-in-pants-pocket-that-went-through-the-wash infraction costs in that household!

Want to turn these tips into action? Check out

Monday, November 14, 2016

Boost College Savings With An Allowance

Girl, Grad, and Savings Spreadsheet.

These days, behavioral finance apps that “trick” people into saving are all the rage. Most work by automatically transferring small amounts of money from checking to savings based on an algorithm, like rounding up each purchase or looking for surplus cash. The PTMoney blog reviews several of them here.

These new apps can be a real boon for parents struggling to save money for their kids to go to college.

Here’s another auto-savings trick to consider: give your kid an allowance.

To save money?! Sounds ridiculous, right?

Well, here’s the secret to making it work: split the allowance payments between buckets. You know, like the classic spend, save, give jars. But, instead of having just one Save jar for your kid’s random purchase goals, add a long term bucket too. Set the clear expectation that the fractional allowance payments accumulating in this bucket are earmarked for college only.

Pro tip: to boost savings further, offer a nice aggressive parent-paid interest rate to be applied each week.

If you start this process early, your youngster can amass some significant funds by high school graduation day. Run the numbers in this Google sheet.

Suppose you use America’s most popular allowance formula of $1 per year of age, start early at the age of 5, allocate 20% to the college bucket, and accumulate through age 17. Then your kid will have $3,521.87 sitting in the college bucket when the time comes to matriculate.

And if your kid kicks in portions of birthday checks, holiday checks, and paychecks along the way, the grand total could be dramatically higher.

This is just the kind of automated “savings trickery” that parents are doing with our family finance app.

The extra college savings are good, but there’s a side benefit that may be even better: shared skin in the game. Every week for years on end, your kids will have actively participated as investors in their own college education. You can bet that sense of financial ownership will translate into a more frugal and focused college experience.

Cool trick.

Want to turn these tips into action? Check out

Sunday, November 13, 2016

16 Classic Quotes To Jumpstart The Gratitude Conversation With Your Kids

Grateful Boy With Dog

Is your child falling into the trap of always wanting more?

From ancient Roman philosophers to classic American rockers, introspective people ultimately realize that gratitude is the root of a rich life, not gold. Reviewing these classic quotes with your kids might help you accelerate the epiphany:

  1. “Gratitude is not only the greatest of the virtues, but the parent of all the others.” ~Cicero
  2. “It is not the man who has too little, but the man who craves more, that is poor.” ~Seneca
  3. “Wealth consists not in having great possessions, but in having few wants.” ~Epictetus
  4. “A small house can hold as much happiness as a big one.” ~Chinese Proverb
  5. “It’s easy to halve the potato where there’s love.” ~Irish Proverb
  6. “It is not happy people who are thankful. It is thankful people who are happy.” ~Unknown Wise Person
  7. “Content makes poor men rich; discontent makes rich men poor.” ~Benjamin Franklin
  8. “Who is rich? He that rejoices in his portion.” ~Benjamin Franklin
  9. “I have learned to seek my happiness by limiting my desires, rather than in attempting to satisfy them.” ~John Stuart Mill
  10. “I make myself rich by making my wants few.” ~Henry David Thoreau
  11. “It’s good to have money and the things that money can buy, but it’s good, too, to check up once in awhile and make sure that you haven’t lost the things that money can’t buy.” ~George Lorimer
  12. “Gratitude is riches. Complaint is poverty.” ~Doris Day
  13. “Count your blessings more often than you count your money.” ~Dolly Parton
  14. “If you live for having it all, what you have is never enough.” ~Vicki Robin
  15. “The thankful receiver bears a plentiful harvest.” ~Proverb
  16. “Forget your lust for the rich man’s gold. All that you need is in your soul. And you can do this if you try. All that I want for you my son, Is to be satisfied.” ~Lynyrd Skynyrd

Perhaps you could adopt one as a family money motto.

Too deep for your youngster to grasp?

Just remind your kids to look for joy in the simple things already around us. Charles Schulz captured a classic example that anyone of any age can appreciate when he said: “Happiness is a warm puppy.” Not cold cash.

Want to turn these tips into action? Check out

Saturday, November 12, 2016

Hire Your Youngsters To Find Stray Decorations

Decorations And Coins.

Ah, the holidays.

You drag the boxes down from the attic.

You decorate the house from head to toe.

The family enjoys a festive holiday.

You undecorate.

You lug the boxes back up to the attic.

Phew. Done!

Not so fast.

That’s when you find the stray decoration lurking in a nook here or a cranny there. It’s inevitable.

Finding all your decorations while cleaning up after the holidays is like finding all the typos in your own writing. One or two always slip through the cracks.

There’s a simple solution though. I stumbled upon it while analyzing some anonymous Halloween related transactions on our family finance site today. I noticed this credit to an account:

Found Halloween Decoration: $0.50

Looks like a parent paid a kid 50 cents for finding a stray Halloween decoration. Brilliant!

Before you make that final ascent up to the attic with your holiday boxes this year, offer your kids a modest bounty for any stray decorations they can find.

It’s a fun way for your kids to put a little jingle in their pockets while eliminating some holiday hassle for you. Win, win.

Want to turn these tips into action? Check out

Friday, November 11, 2016

Make #GivingTuesday Your Kid's Annual Habit (VIDEO)

Youtube Video Player

Video Transcript

Hey, Bill here. As always, thank you for the nice mentions on social media.

Here’s a simple trick for making charitable giving a habit with your kids: schedule it. Anchor your kids donations to a special day of the year. Make giving an annual tradition.

The holidays are a popular target, but, man, can they be hectic. So pick a day right after a holiday instead of right on one. Try #GivingTuesday. It’s the first Tuesday after Thanksgiving, Black Friday, and Cyber Monday. The perfect charitable atonement for two days of rabid consumerism.

You can read all about this global day of giving at

Now here’s a quick recipe to get rolling with your kids before #GivingTuesday hits this year.

  1. Set a giving goal. Get the kids to set goals for how much and where to donate. Need ideas, check out and Two of my favorites.
  2. Allocate funds. Set up a separate jar, prepaid card, or account where your kid can accumulate a portion of each allowance, chore, odd job, or birthday payment. Here’s an idea: let your kids pick the percentage. Their choices just might surprise you.
  3. Kick in a consumption tax. For extra credit, impose your own Black Friday / Cyber Monday family tax. Add 10% of those extra purchases to your charitable buckets. The tax will either amp up giving or tamp down spending. Either way, it’s a win.
  4. Celebrate with an #UNSelfie. Capture your giving moment on social media to encourage other families to join in.

So that’s how you can start making charitable giving a lifelong holiday tradition with your kids this year. Mark #GivingTuesday on your family calendar today.

Want to turn these tips into action? Check out

Thursday, November 10, 2016

Turn Why Into How When Kids Whine About Money

“Dad, why can’t I have ____?”

Fill in the blank. That lego set. The latest iPhone. The designer jeans. The high end gaming device. You name it.

“Because we can’t afford it.”

“Because you don’t need it.”

“Because I said so.”

Because dad is the bad guy, right?

Don’t let your kid play the victim. Flip the script. Change the question from why to how.

“How can you earn enough to buy ____?”

Maybe some odd jobs around the house.

Maybe some paid gigs in the neighborhood.

Maybe some simple freelance tasks.

Maybe creating and selling some creations online.

Suddenly, you aren’t the enemy any more. You’re the friendly facilitator.

The funny thing is, after kids put in sustained effort to diligently earn enough money to buy something, they often realize it isn’t worth it after all.

How cool is that?

Want to turn these tips into action? Check out

Wednesday, November 9, 2016

Make a Gratitude List With Your Child

Son Holding Dog For Which He Is Grateful

In the Money ABCs I put together for my kids, “H” is for “Happiness through gratitude, not gratification.”

So how do we build a sense of gratitude in our kids?

One way is through little daily rituals, like giving thanks before a meal. Another is through occasional simple exercises, like making a gratitude list. Younger kids can use your guidance, older ones can handle it solo.

One of my college age sons penned this top 10 gratitude list while we were sitting at the kitchen table today:

  1. I’m grateful for my family (including Colby, our piebald dachshund).
  2. I’m grateful for my friends.
  3. I’m grateful for the opportunities I’ve been given.
  4. I’m grateful for my health.
  5. I’m grateful for not having to worry about my next meal.
  6. I’m grateful for human empathy and drive.
  7. I’m grateful to those whose shoulders we stand on.
  8. I’m grateful to my struggles for shaping me.
  9. I’m grateful for my freedom.
  10. I’m grateful for democracy and the peaceful transition of power in the US.

I’d say that’s a pretty epic list.

Me? I’m grateful to have my son home from college for the holidays.

What’s on your family’s gratitude list?

Want to turn these tips into action? Check out

Tuesday, November 8, 2016

Fight Financial Bullying With Cards And Alerts

Boy Being Bullied

Financial bullying among kids comes in many forms. Some blatant, some more subtle.

  • An aggressive kid threatens a beating unless your child hands over money.
  • A manipulative kid “befriends” your special needs child in exchange for financial favors. (Yes, this happens. Sadly.)
  • A social clique “accepts” your introverted child as long as your kid’s picking up the tab for outings.

These can be tough situations for parents to detect. Financially bullied kids can be too intimidated, naive, or embarrassed to let Mom or Dad know.

Here's how you can shore up your kid's defense:

  1. Give your kid a prepaid or bank debit card, not cash. Bullies like cash for the same reason criminals do — no audit trail. Don’t make your kid an easy target.
  2. Limit the amount on the card. Keep a modest balance on the card. Transfer funds onto the card only as needed. That protects your kid from being cajoled into a big one-time purchase.
  3. Turn on real time transaction alerts. Get a card that allows you to receive text alerts whenever there’s activity on your child’s account.
  4. Review the transaction history. Sit down with your child and review the week’s transactions. That’s a good habit whether your kid’s being bullied or not.

With these measures, you can help your kid change the dialog in the confrontation:

“Hand over your money kid!”

“I don’t carry any cash.”

“Then buy me something with your card!”

“Are you sure? My parents get an alert every time I make a purchase.”

“Do it anyway!”

“I’d like to, but I only have $5 loaded on my card. Sorry.”

“Scram kid!!!”

Want to turn these tips into action? Check out

Monday, November 7, 2016

Put A Meaningful Label On Your Kid's Allowance

Kid With Allowance Labels

“Here’s your ______.”

Fill in that blank if you’re delivering money to your kid on a regular schedule.

“Allowance.” Right?

That’s what most parents call it. But maybe you’re missing an opportunity to reinforce a more focused message with your kids about money. A message your kids would hear or see every time you hand over cash or deliver a deposit.

If you could give that allowance a more meaningful label, what would it be?

I pulled an anonymous sample of allowance names parents are using on our family finance site. Kids see the names and absorb subliminal money messages every time allowance is delivered into their accounts.

Here are some of the highlights (and lowlights) with my best guesses at the messages being conveyed by the parents:

  • Pocket Money — Here’s a small amount of money you can carry around in your pocket for minor discretionary expenses. (It’s what the Brits call allowance.)
  • Play Money — Pessimistic view: Money isn’t real, it’s just pretend! Optimistic view: Our family believes everyone needs a little play in their life. All work and no play makes Jack a dull boy, right? So, here’s a little money to facilitate some fun on a regular basis.
  • Mad Money — Make some speculative bets on stocks every once in a while. Who knows, you might be the next Jim Cramer! (For the record, I’m in the Jack Bogle camp. Stick with index funds.)
  • Random — Spend this money on random stuff! (Sorry, can’t come up with a positive spin for this one. Ugh.)
  • Free Money — See above.
  • Budget — An allowance isn’t a random hand-out or free money, it’s a tiny slice of the family budget. Use this money for the things we agreed you’d pay for.
  • Wants — We’ll take care of your core needs. Handle your wants with this.
  • Clothing — here’s an additional allowance specifically earmarked for clothing based on the annual budget you proposed and we approved. We’ll let you make the purchasing decisions, but when it’s gone, it’s gone.
  • Commission — Like Dave and Rachel say in Smart Money Smart Kids, you’re working for us on commission.
  • Work — Remember, money comes from work.
  • Weekly Chores — We assume you’ve completed your weekly chores as we agreed...
  • Make Lunches For Dad — Remember our deal: you keep making my lunches, and I’ll keep delivering your allowance.
  • Mudroom Manager Paycheck — Here’s your regular payment for managing the family mudroom. Keep up the good work!
  • Study Allowance — Keep studying, and your allowance will keep coming.
  • Good Grade Money — Make the grades, and you’ll make the money. (If you insist on linking school and money, you might consider paying for good study habits instead of outcomes.)
  • Stipend — As we discussed, a stipend is a payment made to a trainee or learner for living expenses. While you’re in training or learning mode, we’ll help you cover expenses. But when you graduate, you’re on your own.
  • Dollar A Day — If you’re mindful with your money, a dollar a day can really add up over time!
  • Photography Expenses — We love supporting your passion for photography. Here’s the amount we budgeted to keep expenses within reason.
  • Gas, Clothing, Donations — Manage your funds wisely between these three areas.
  • Gas Card Top Up — You’re responsible for most of your own gas, but we’ll kick in a bit each week.
  • iTunes — Let’s keep that iTunes obsession on a bit of a leash.
  • Social Money — Great to see you hanging out with good friends. This should be enough for fun but frugal outings together.
  • Lego Allowance — Keep saving this for a few months, and you’ll have enough for that next cool set.
  • Dadz D**n Money — “An allowance is where I ALLOW you to stay in my house.” ~Chris Rock. (I don’t recommend this crass allowance label, but check out this classic sitcom clip to see what it reminded me of and why it gave me a chuckle.)
  • FOOD!!!! — We get it. You’re a growing teenager playing 3 hours of sports every day. This is for after-practice hunger pangs.
  • Base Salary — We’re kicking in a modest allowance for fulfilling your expected family obligations. Want to earn more? Check out the opportunities posted on the family odd jobs chart.
  • Purchases Normally Paid By Parents — We’re putting you in charge of buying the things that parents typically buy for their kids. That way, you’ll know how much everyday life costs, and there’ll be fewer surprises when you’re on your own.

Did those labels make you rethink how you’re positioning allowance in your family?

What message do you want to send whenever allowance hits your kid’s account?

Want to turn these tips into action? Check out

Sunday, November 6, 2016

Help Your Kid Handle A Money Windfall

Kid Holding Lottery Ticket

Have you ever received a nice little financial windfall? A bonus? A tax refund? A rebate? A surprise raise?

Have you ever blown one?

Most of us have. You remember. That ill-conceived purchase while basking in the giddy afterglow of an unexpected cash infusion. Whoopsie!

Kids get windfalls too. Birthday money. Holiday money. The blockbuster babysitting payout from the absurdly generous neighbor. My youngest son received $25 for a 10 second photo shoot when he was 5. To a kindergartner, that’s like winning the Powerball jackpot!

So you might want to sit down with your kid and discuss some thoughtful strategies for dealing with the inevitable windfalls.

Here are a few options:

  1. Define a separate windfall split. Lots of parents encourage kids to split allowance, chore, or odd job payments between buckets. For example, the average split allocations defined for spending, saving, and giving on our family finance site right now are 62%, 27%, and 11%. For windfalls, you might choose a different split. Maybe it’s more heavily tilted toward spending (90%, 5%, 5%), or maybe it doesn’t include all the normal buckets. Let your kids help decide.
  2. Use the 48 hour rule. Mandate a healthy waiting period before letting your child spend a windfall. Make your kid sleep on it, at least twice.
  3. Fill a strategic money bucket. If you’ve started a net worth spread sheet with your teen like the one here, maybe there’s a column that needs special attention. The emergency fund? The Roth IRA? A Bank of Mom/Dad loan repayment? Convince your teen to use some or all of a windfall to shore up any significant gaps.
  4. Offer a parent match for non-spending choices. There’s nothing like a little incentive to nudge behavior in the right direction. Maybe you could offer a parent match for windfall uses unrelated to spending — like a 100% parent match for any contributions to a Roth IRA.

Discussing how to handle small windfalls with your youngsters now might prevent them from blowing big windfalls as an adult. You know, like you did.

Want to turn these tips into action? Check out

Saturday, November 5, 2016

Change Your Child's Allocation To Spend-Save-Give-Gift For The Holidays

Spend Save Gift Money Jars

’Tis better to give than to receive, right?

Unfortunately, kids can’t discover that beautiful truth if they’re always on the receiving end of the holiday gift exchange.

Here’s how to make sure your kids have the funds to be on the giving end as well.

  1. Set up a separate gift fund for your kid. Add an extra jar, account, or prepaid card to your standard set of buckets.
  2. Pick a modest gift budget. One way to keep things fun yet frugal is to organize a secret family gift drawing for the holiday. See how we organize our family drawing and limit the budget to $20 a child here.
  3. Divert a slice of allowance, chore, or odd job income to fill the fund. Temporarily amend your kid’s spend-save-give allocations to add in a percentage for the new gift bucket. Revert to the original allocation once the gift fund hits the target amount.

Now your kid will have the gift funds in hand by the time the holiday rolls around.

Giving a gift purchased with hard-earned money always generates a special sense of pride and joy in a youngster. And, as a happy consequence, your child will appreciate receiving gifts from others even more. It’s two gifts in one.

Want to turn these tips into action? Check out

Friday, November 4, 2016

Tell Teens To Take More Risk (VIDEO)

Tell Teens To Take More Risk Video

Video Transcript

Hey, Bill here. As always, thank you for the nice mentions on social media.

Teens are notorious for risky behavior. It comes with the surging hormones and the under-developed frontal lobe. But there’s one area where you need to convince your teens to amp up the risk if they’d like to enjoy a healthy future.


Research shows the biggest money mistake young people make theses days is playing it too safe. Most teens just plunk money in a savings account, if they save any money at all.

Here’s how you can intervene and be a real game changer in your kid’s financial future:

  1. Help your teen get a W-2 paying job. Summer jobs are great for teens, but research shows part-time work for full time students has surprising benefits too, so don’t rule that out.
  2. Open a Roth IRA account. I used Schwab for my teens, but there are lots of options here, so shop around.
  3. The tricky part — contribute some earnings. Convince your kid to stash away some percentage of each paycheck. At the end of the summer or the year, move that savings over to your teen’s Roth IRA as an annual contribution.
  4. Match your kid’s contributions. Grandparents or relatives might be willing to help here. The tax advantaged Roth account plus the family matching makes this what many people call a “Family 401(k).” Just make sure you stay within all the legal limits and play by all the legal rules.
  5. Invest. Don’t just let contributions sit there in cash. This is where it’s time for your teen to take some near term risk to gain some long term returns. We’re talking decades here. I like to use low cost, diversified index funds or ETFs for my kids, like Vanguard’s VTI.
  6. Rinse and repeat through college. Make it an annual family tradition.

Now, you’re gonna struggle to get past step 3 if you don’t show your teens some serious payoff. So it’s time to whip up a little spreadsheet.

Let’s say your high school freshman makes over 1500 dollars this summer (not unusual, my kids did), contributes $500 of it to the Roth, gets the grandparents to match, and invests in VTI. Then suppose your child continues the ritual every year for 8 years through senior year in college. Assuming an annual return of 7.38%, your kid would turn that $8,000 into over $150,000 by age 60.

That’s real money!

Even better, suppose that student ritual turns into a persistent habit after college. Maxing out Roth contributions every year would probably leave your kid sitting on well over a million dollars by retirement. Run the numbers in the spreadsheet and show your teen.

Now that’s a risk your teen can certainly afford to take.

Want to turn these tips into action? Check out

Thursday, November 3, 2016

Maintain A Net Worth Spreadsheet With Your Teen

Teen Net Worth Spreadsheet

A few years back, I started putting together net worth spreadsheets for each of my teens. We share them on Google Drive and review them regularly.

I’m glad I started that routine. Here’s why:

  1. Net worth is a critical money concept. It’s a key measure of financial health. Net worth reveals that having a large bank balance but an even larger credit card balance is worse than having a tiny bank balance and no credit card debt. Net worth forces consideration of the full picture.
  2. Tracking net worth is a valuable habit. Monitoring net worth forces awareness. Awareness allows course corrections before finances snowball out of control.
  3. A net worth spreadsheet focuses discussion. The organized columns and concrete numbers serve as a consistent table of contents for a directed discussion with your teen. That sure beats a meandering, abstract lecture. Sure, your kids’ eyes will glaze over the first few times. But hang in there. With each iteration, interest and understanding will grow. Trust me. I’ve seen it four times now, and I’m banking on the fifth. By the time your kids head out into the real world to scratch out a living, you’ll have their rapt attention, not to mention gratitude.
  4. A net worth spreadsheet clarifies goals. I like to include aspirational columns for financial buckets that aren’t quite achievable or relevant today, but are something to shoot for tomorrow. Like a Roth IRA column for a newly minted teen to set the expectation of getting a summer job during the high school years. I also add a “goal” row at the bottom to list target values for accounts in coming time periods. Like $500 for the emergency fund by senior year. That makes goals crystal clear, in context, and relevant.

Here are the columns in the net worth spreadsheets I use with my kids:

  • Quarter. I like to add and review a new row to the spreadsheet quarterly, so I’ll record entries like “Q3 2016” here. Change the column to “Year” if you’d prefer annual. Or choose whatever frequency works best.
  • Spending. The end of quarter balance in the account your kid uses for everyday spending — be it a checking account or a prepaid card. If your teen maintains a balance in a peer-to-peer payment service like Venmo, include a column for that too.
  • Charitable Fund. Tracks the money accumulating in an account for regular donations. I want my kids to get in the habit of setting aside a fraction of their income for philanthropy.
  • Emergency Fund. Money sequestered in a liquid account for emergencies. It finally dawned on me that there’s no reason to wait until your kids are grown up to teach them about emergency funds. Why not learn this critical habit early? Teens have emergencies too. That massive data plan overage charge. that first parking ticket. So I had my teens create separate emergency funds with a target of a few hundred dollars each. As they get older, the target amounts get larger.
  • Big Savings Goal Fund(s). One or more buckets for specific medium to long term savings goals, like buying a used car, financing a Spring break trip, or furnishing a first apartment. Initially, these funds earn my outrageously generous parent-paid interest. Kids have few opportunities to earn reasonable returns, so I offer them a supremely attractive interest rate from the Bank Of Mom/Dad. Think 1970s. It’s a strong incentive to sock money away for the long haul instead of frittering it away immediately on mindless spending. As they get older, we shift these accounts from the Bank of Mom/Dad to an online bank that supports convenient sub-accounts — like Ally bank.
  • College Fund. Money set aside in a 529 account for college. As the teens transition into high school, it’s important to start setting reasonable expectations about college affordability. If grandparents or other relatives have been kicking in 529 funds, this column serves as a good reminder for your teen to show some appreciation for their generosity.
  • Retirement Fund. Yes, your teen should have one. As soon as each teen pulls down that first summer paycheck in high school, I create a Family 401(k) in a Roth IRA account. It’s one of the best financial moves I’ve made as a parent, and I hope you’ll do the same for your teens. I also include an empty Work 401k column in the spreadsheet as a constant reminder that I want them to sign up for one as soon as they land that first full time job.
  • Investments. A bucket for any additional assets your kid might own in a taxable investment account. For example, I bought one of my sons fractional shares in Chipotle last year to as a speculative comparison point to his index fund holdings in his Roth IRA. The point: keep speculative bets to a minimum. Focus on low cost, diversified index funds held in tax advantaged accounts for the long term first. Hat tip Jack Bogle.
  • Total Assets. The sum of all the preceding asset columns.
  • Bank of Mom/Dad Loans. Yes, we make occasional big ticket item loans to our teens, like for laptops. That’s because we want them to experience the responsibility (and pain) of repaying debt before they hit the real world. That’ll reduce the chance of over-committing later when the stakes are much higher.
  • Credit Card. Current credit card balance when they ultimately have them. Teens need to know that credit cards are loans. If you want to help your teen start building a solid credit history, I like this hybrid strategy of a credit card for some well-known fixed recurring expenses and a prepaid card loaded with a budget for discretionary expenses.
  • Student Loans. As with the College Fund column, this is a good column to start setting realistic expectations about college affordability.
  • Car Loan. If any. Saving up first is a better bet. Either way, focus your teen on buying used.
  • Mortgage. Just a placeholder for the future. Maybe. Just don’t let your teens assume buying always beats renting.
  • Total Liabilities. The sum of all the preceding liability columns.
  • Net Worth. The bottom line: total assets minus total liabilities.

A net worth spreadsheet is one of the best techniques I’ve found to help my teens understand the big picture of personal finance. Lay out a road map to their financial independence one cell at a time.

Want to turn these tips into action? Check out

Wednesday, November 2, 2016

Make Family Gift Giving Frugal But Fun With A Secret Holiday Drawing

Not So Secret Santa

Holiday gift giving can be emotionally and financially stressful — especially in big families like mine.

With seven of us in the immediate family, just exchanging one gift each adds up to a whopping 42 gifts. (Check my math: if each of us has to get the other 6 just one gift, that’s 7 times 6 equals 42, right? Yikes!)

  • That’s a lot of spending. Spending that some family members might not be able to afford.
  • That’s a lot of work. It takes real effort to think of just the right gift for someone. Finding 6 perfect gifts is overwhelming.
  • That’s a lot of (potentially random) stuff. Are their really 6 different perfect gifts out there for you this year? Probably not.

Holiday spirit? More like dispiriting. Sounds like a gift grind.

So here’s what we’ve been doing for the last several years instead:

  1. A secret drawing. Well in advance of the holiday, I conduct a secret drawing to match one family gift giver with one unknowing recipient.
  2. A budget cap. I set a budget cap on how much can be spent on each gift. We’ve gone with $20 in our family. Do what’s comfortable in yours. We’ve found that when the creative juices start flowing, $20 goes a long way. Little eclectic gift combos using every last budgeted cent are the norm.
  3. A hand-made card. The card has to include a little mini-essay on why this is the perfect gift for the recipient. There have been some priceless ones.
  4. A formal ceremony. The gifts are delivered one at a time in front of the family “audience.” We do ours at the dinner table on Christmas Eve. Standing with the recipient, the giver provides color commentary along the way, explaining the nuances and hidden jokes behind the gift. The sibling banter around the exchanges has provided some of our most priceless (and proudest) moments as parents. I’m smiling now just thinking about the highlight reel.

Maybe it’s time to try a gift drawing in your family this holiday season. It’s frugal. It’s festive. And best of all, it’s thoughtful. Sounds like the holiday spirit to me.

Want to turn these tips into action? Check out

Tuesday, November 1, 2016

Put GivingTuesday On Your Family Charitable Calendar

Two Dimes Bookended By Hearts

One way to make charitable giving a family habit is to schedule it. Make it a regular tradition on the same day every year.

The end of year holidays are a popular time, but they can be mighty hectic. Try anchoring your family giving to a day near a holiday instead of right on one. Like #GivingTuesday. It’s the first Tuesday after Thanksgiving, and it’s the perfect charitable bookend to the rabid consumerism of Black Friday and Cyber Monday.

What is #GivingTuesday? It’s a global day of giving that has been gaining momentum through social media since 2012. You can read all about it here.

To get the ball rolling on #GivingTuesday this year, help your kids:

  1. Set a giving goal. Encourage the kids to set goals for how much and where to donate. Looking for ideas? Consider scouring DonorsChoose for a classroom project that resonates. Or, make small amounts go extra far in the developing world with GiveWell.
  2. Allocate funds. Set up a separate jar, prepaid card, or account to accumulate a portion of each allowance, chore, odd job, or birthday payment for charitable giving. After a thoughtful conversation, let your kid choose the percentage. The choice just might surprise you.
  3. Kick in a consumption tax. For extra credit, sweeten the charitable pot with a family-imposed Black Friday / Cyber Monday tax. Take 10% of non-essential purchases on those days, and add it to your charitable buckets. The tax will either amp up giving or tamp down spending. Either way, it’s a win.
  4. Celebrate with an #UNSelfie. As you’re disbursing your donations, capture the moment and post an #UNSelfie with the family on #GivingTuesday. That will encourage others to join in on the charitable giving buzz.

Start making charitable giving a holiday tradition — and a lifelong habit — with your kids this year. Mark #GivingTuesday on your family calendar today.

Want to turn these tips into action? Check out