Monday, October 31, 2016

Try One Of October's Top Five Family Finance Tips This Fall

October Porch Pumpkins

Looking to turn over a new financial leaf with the kids this fall? Try one of the five most popular family finance tips from October:

  1. Reimburse Your Teen’s Uber And Lyft Rides — Here’s one thing you might consider reimbursing for your teens. No questions asked.
  2. Make Kids Journal Their Money Requests — Here’s another way (aside from a budget-based allowance) to put the brakes on impulsive extra money requests from your kids.
  3. Use Reimbursements To Condition Teens To Maintain A Spending Buffer — Here are two important personal finance lessons your teens can learn using a reimbursement process for everyday purchases.
  4. Decide Who’s Taking The Lead On Your Kid’s Financial Education — Don’t let the ball drop between parents when it comes to your child’s money schooling. See which parent is taking the lead most often in FamZoo families.
  5. Ditch Directives And Tell Kids Real Money Stories — Kids don’t listen to “Don’t do this!” and “Always do that!” Tell some real money failure stories about yourself to make the lessons stick. The more of a money moron you were, the better. Here’s an example.

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Sunday, October 30, 2016

Spook Your Teens With Scary Debt Stories BEFORE College

Scary Debt Face

Lindsay used student loan money to take a 3 month hiatus from school, visit a (now ex) boyfriend, and buy a pricey spinning wheel and drum carder for a knitting hobby. Now she's struggling to pay back over $50,000 in student loan debt. Frightening.

Melanie went to school, worked hard, earned good grades, and never had a credit card, a mortgage, or any other debt. She racked up $81,000 in student debt and couldn’t find full time work. Chilling.

Amber and Danny emerged from law school and dental school with over half a million dollars in student debt — $623,620 to be precise. Yes, you read that right. Truly hair raising!

Each shares their frightening debt stories openly in hopes of helping others in the same predicament.

Share their stories with your teens to avoid the same predicament.

Spooking your teens scary debt stories before they go to college, might just help them steer clear of becoming one after.


P.S. Happy Halloween!

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Saturday, October 29, 2016

Help Your Child's Giving Go Far With GiveWell

Worldly Giving Jar

Kids often worry their small donations don’t make a difference.

Visit to show them otherwise.

GiveWell believes philanthropic dollars go furthest in the developing world. Each year they publish a very short list of top recommended charities. Only four made their list in 2016.

Your child could save a young life in Malawi for just over $4.

Or deworm a child in sub-Saharan Africa for around a buck.

Or transfer small amounts of cash directly to households in developing countries via mobile-linked payment services.

Show your kids that when they give well, even small donations make a big difference.

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Friday, October 28, 2016

Make Kids Journal Their Money Requests (VIDEO)

Make Kids Journal Their Money Requests Video Player

Video Transcript

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

Sometimes asking mom and dad for extra money is just a little too easy. Not that kids are nefarious or anything, but harried parents are a pretty easy con.

“Ugh, I’m in a rush, so I’ll just flip him a 5.”

“Did I just give her 10 bucks on Monday, or was that last week? Man, I’m losing it!”

“I wonder if he already hit Mom up for that...”

“Did I ever get change back from that 20 bucks I doled out last week?”

Any of that sound familiar?

There’s a simple solution for putting the brakes on impulsive, redundant, or (dare I say?) exploitative money requests from the kids.

Force your kids to write it down. Make’em maintain a little money request journal.

Columns can include:

  • the Date,
  • the Requested Amount,
  • a Justification,
  • the actual Approved Amount, along with some
  • Comments from you about your approval, partial approval or even total rejection,
  • an Adjusted Amount (just in case some change was actually returned),
  • and a Running Total so everyone can clearly see the money stacking up.

By the way, If you want to ditch the pen and paper and go New School, you could use a shared Google Docs sheet or an app instead.

Now, to get money out of you, kids have to take the time to fill out a new entry and seek your formal approval.

It’s amazing how a little thought, a little transparency, a little history, and, yes, even a little red tape can put some big brakes on impulsive spending.

With a money request journal, duping Mom and Dad out of extra dollars just got a whole lot harder.

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Thursday, October 27, 2016

Don't Teach Your Kids How To Write Checks

Checkbook Turning Digital

A basic check writing unit is a staple of the traditional high school personal finance curriculum.

I say ditch that unit.

I don’t care if my kids never learn how to write checks.

Why? Almost all of the overdraft fees incurred by my older two kids were due to hand-written checks. A forgotten check cashed late. A remembered check cashed unexpectedly early.

Whenever there’s a significant delay between payment being initiated and funds being withdrawn, there’s a financial accident just waiting to happen. Especially for those who don’t maintain healthy buffers in their accounts. Like your teens.

That nefarious pay-now-withdraw-later delay exists with checks, and it exists with credit cards. That’s why inexperienced or stretched consumers struggle with both. That’s why banks love both. Cha-ching.

Hand-written checks are nothing more than a gateway to bank overdraft fees. No thanks.

So, what if my kid has to pay someone who only accepts a paper check? (Lame.)

I teach my kid how to use online bill pay instead. The bank handles cutting the check and withdraws the funds promptly. No delay. Nothing to remember. No timing games to play. No overdraft. No worries.

You say: “How can my kids be financial grown-ups if they don’t know how to write checks?”

I say: Grown-ups don’t write checks, Luddites do.

P.S. Your teens should ditch cash too. Except for a little backup stash in the shoe.

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Wednesday, October 26, 2016

Set The Stage For Socking Away Savings In College

Father Son Savings Text Exchange

Just last night, I received this glorious text from one of my sons in college:

“Can you transfer $800 to my savings? I don’t want to spend it.”

Umm. Let me think about tha... YESSSSSS!!!

You see, my son has been working a part time job during the school year. Compensation includes a share of the cash in the tip jar at the end of each shift.

That’s just the kind of money that tends to evaporate in a college environment. The cash is at your fingertips. Tip income feels like an extra “bonus.” Dropping bucks here and there with your buddies is a constant lure. On the other hand, accumulating cash in your wallet, loading it on to your spending card, and requesting your dad to whisk it away to savings seems almost inconceivable.

I have to admit, I’m one proud papa to receive a text like that. I never would have sent a text message like that when I was in college. (Let’s just ignore the fact that text messaging didn’t even exist back then.)

So, how can you set the stage for receiving a similarly glorious text message from your future college student someday? Every parent’s mileage may vary (kids are different!), but here are a few things that certainly increased the odds in my case:

Who knows? If you set the savings stage early, you might just look forward to texts from your college kids about money, instead of dreading them like most parents.

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Tuesday, October 25, 2016

Add Consequences To Allowance With A Chore Fail Chart

Allowance and chore fail system sketch.

You want your kids to get hands-on practice with money management early on.

But your kids are too young to get a real job.

How about paying your youngsters for chores?

No. You expect your kids to complete everyday chores without compensation. After all, that’s part of being a contributing member of your household. Besides, managing a detailed chore chart is one more hassle to cram into your already overloaded parenting regimen.

How about giving your kids an allowance?

No. You don’t like the idea of a hand-out. Besides, blowing off chores should have consequences. Kids shouldn’t get off scot-free when shirking responsibilities.

What to do? Allowance or chore chart?

Try combining a variation of both: a budget-based allowance and a chore “fail” chart.

I describe how you can treat an allowance like a budget instead of a hand-out in the post, Fix The Way You’re Doing Your Kid’s Allowance.

But what’s a chore fail chart? It’s the inverse of a traditional chore rewards chart. Checking an item off a chore fail chart deducts a small penalty from your kid’s account instead of crediting a reward. It serves as claw-back from your kid’s allowance. So, instead of entries like “Made bed: +$0.25” on a chore rewards chart, you have entries like “Did NOT make bed: -$0.25” on a chore fail chart.

The added bonus is less hassle. The regular allowance runs itself, and you only need to interact with a chore fail chart when chores are being ignored instead of completed. Unless your kid is in full-on rebellion mode (teens anyone?), that means checking a lot fewer boxes.

By the way, if you don’t care for the idea of monetary penalties, you can deduct privileges on your chore fail chart instead — like online gaming time. But that can get a little more complicated to track and manage.

The ease of an allowance without the entitlement. The accountability of a chore chart without the hassle. Coupling a budget-based allowance with a chore fail chart might just solve your pay-for-chores versus give-an-allowance dilemma.

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Monday, October 24, 2016

Tell Teens To Take More Risk

Teen taking investment risk.

“Wear your helmet!”

“Don’t text while driving!”

“Watch what you post on social media!”

If you’ve parented a teen, I’m sure you’ve dished out some of those classic admonishments — and then some.

Teens are notorious for risky behavior. It comes with the surging hormones and the under-developed frontal lobe.

But there’s one area that teens need to pump up the risk if they’d like to enjoy a healthy future. Investing.

According to recent research featured in the Wall Street Journal, the biggest money mistake people make in their 20s these days is playing it too safe. They think investing in the market is too risky or too complicated.

Most teens I know never get beyond plunking some money in a traditional savings account, if they save any money at all.

Here’s where you can play a life-changing role starting in high school and extending through college. Try this general gameplan:

  1. Help your teen to get a W-2 paying job. We focused on summer jobs with our kids, but don’t be too quick to dismiss part-time work while in school. Part-time work for full-time students has benefits.
  2. Open a Roth IRA account. You can start with a custodial account for kids under 18. I opened ones for my teens at a local Schwab office, but there are lots of options here.
  3. Contribute some earnings. Convince your kid to stash away some percentage of each paycheck into a savings account or a savings card. At the end of the summer or the year, roll the savings balance over to the Roth as an annual contribution.
  4. Get a family match. Match your child’s contributions if you can or enlist a grandparent to help. The matching turns it into a “Family 401(k).“
  5. Invest the contribution. Don’t just let the contribution sit there in cash. This is where it’s time to accept some medium term risk for long term returns. We’re talking decades. Consider a low cost, well diversified, broad market index fund or ETF.
  6. Rinse and repeat through college. Make it an annual tradition all the way through that college diploma.

You’ll struggle to get past step 3 though if you don’t show your teens some serious payoff. You can run some very impressive scenarios in a very simple spreadsheet. Copy mine here, and play with the numbers.

Sample Teen Roth Projection

For example, let’s say your freshman in high school makes over $1,000 this summer (my 3 middle sons averaged $1,775 each summer so that shouldn’t be a stretch), contributes $500 of it to a Roth, gets the grandparents to match, and invests in a total market index fund like VTI. Then suppose your child continues the ritual every year through senior year in college. Assuming an annual return of 7.38% (the current 10 year annualized return of VTI), your child will turn that $8,000 into over $150,000 by age 60 — just from this little “summer student ritual.”

Even better, if that student ritual turns into a persistent habit of maxing out IRA contributions and sensible investing as an adult, your kid will be sitting on well over a million by retirement. Run the numbers in the spreadsheet.

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

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Sunday, October 23, 2016

Adopt A Family Money Motto

Motto On A Dollar

What are your family’s core beliefs about money? Can you encapsulate them in just a few words?

Thinking, thinking...

That’s not an easy question to answer off the cuff.

Do you think your other family members would come up with similar words? Is everybody on the same page?

Maybe it’s time to identify and adopt a family money motto.

Google “motto” and you’ll find: “a short sentence or phrase chosen as encapsulating the beliefs or ideals guiding an individual, family, or institution.”

Our family finance site lets users enter mottos for their family members to see whenever they sign in. You can select from a small gallery of classic quotes or enter your own. Here are the 5 most popular mottos from our limited gallery:

  1. “Never spend your money before you have it.” ~Thomas Jefferson
  2. “A penny saved is a penny earned.” ~Benjamin Franklin
  3. “If you think education is expensive, try ignorance.” ~Unknown
  4. “Doing more and more with less and less is one form of being generous. In fact, the easiest way to become rich is by being generous.” ~Robert Kyosaki
  5. “A fool and his money are soon parted.” ~Thomas Tusser

You can find a lot more on our Wise Money Words Pinterest board.

Sometimes a pithy family phrase or quirky go-to saying from a grandparent fits the bill best. Here’s a small sampling culled anonymously from our site:

  • “Pursue your passions. Live within your means.”
  • “We work hard, have some fun, save for a later day and always help others.”
  • “Think before you spend!”
  • “Spend beneath your means so you’ll have the freedom to pursue your passions and help others.”
  • “Thrift, prudence, adventure!”
  • “Earn, save and enjoy life!”
  • “Our family isn’t just crazy. We’re crazy for saving.”
  • “There is enough sunshine for everyone”
  • “Everything affects everything — be smart with every dollar and every dime.”
  • “Dream big dreams, and work as hard as your dreams are big!”
  • “I give and I get and I don’t get upset!”
  • “Save your money ’cause someday your money will save you!”

Or, as one clever user entered: “What’s the motto with you?”

Well? What’s your family money motto?

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Saturday, October 22, 2016

Harness Your Teen's Irrationality To Build Your Family Savings

Teen Savings Jar

Behavioral finance informs us that rational thought doesn’t always govern personal finance decisions. Lots of money behaviors are purely emotional or even seemingly random.

For example, people who could save and know they should save, often just don’t.

That’s why a new crop of apps that save “behind your back” (like Digit) or save based on random emotional triggers (like Tip Yourself) are all the rage recently. The apps transfer money from your spending to your savings account using unscheduled or unconventional triggers.

In that same vein, I have a quirky idea for parents out there. With hormones raging and frontal lobes developing, your teenager is the perfect unpredictable, emotional trigger.

Every time your teen does something irrational, incomprehensible, or irresponsible, transfer a dollar to your savings. Build up your emergency fund, your vacation account, or your family fun money card. If your teen is like most, you’ll be swimming in extra savings in no time!

If you’re going to have to endure a teen’s perplexing behavior, you may as well put some extra money away while you’re suffering through it.


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Friday, October 21, 2016

Use Reimbursements To Teach Teens The Value Of A Dollar (VIDEO)

Reimbursements Video

Video Transcript

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

Yes, I pay for many of my teens’ everyday expenses. Even though they each have savings from summer jobs. And I’m happy to do so, like many parents.

But, I want to make absolutely sure my teens know exactly how much those everyday items cost. Even if I’m paying for them. Financial ignorance might feel like bliss now, but it sure won’t later.

So, how do I make sure my teens are fully mindful of the money I’m spending on them?

  1. Make them spend it first using their own account, card, or cash.
  2. Make them itemize the expenses.
  3. Make them formally request a reimbursement after subtracting out any items or portions of items we’ve agreed are their responsibility.
  4. Only then will I send them money to cover — or partially cover — the transactions.

So what’s covered? I might fully cover toiletries, partially cover the gym membership, and not cover entertainment at all. You might have an entirely different set of rules. Do what makes sense for your situation.

So, your teens may not be able to afford everyday items yet, but they still need to learn exactly how much those items cost.

Make them active participants in the everyday expenses you’re picking up. That way, your teens will already know — and appreciate — the real value of a dollar when the day comes for everything to be on their nickel.

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Thursday, October 20, 2016

Teach Your Kids It "Pays" To Be Nice

Nice people finish last, right? Nope.

In fact, in many areas, nice people wind up ahead of the game. According to a recent article in the Wall Street Journal, research shows that being nice pays solid dividends in several areas:

  • Work: Nice people get better performance reviews from senior supervisors. Nice people are less likely to be fired.
  • Romance: Nice men are perceived as more attractive. (Sorry, no mention of a corresponding study on women, but I’m willing to bet — or at least choosing to believe — that what’s good for the gander is good for the goose here too!)
  • Happiness: Small daily acts of kindness raise one’s self-judged happiness.

The article goes on to recommend a simple strategy for learning to be nice: imitate a nice person.

So how do we teach our kids to be nice?

Well, we all know who they tend to imitate, don’t we. The apple doesn’t fall far from the tree.

So let your kid catch you doing plenty of nice things. Such as? Smile and be friendly to those around you for starters. Then try a few small random acts of kindness like the ones here.

Before you know it, you’ll be nicer, you're kids will be nicer, and you’ll all be winners at work, in relationships, and in your own mind.

Sounds like a bargain. Being nice costs you nothing yet pays huge dividends. It’s one of those rare cases in real life where everyone really is a winner.

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Wednesday, October 19, 2016

Offer Your Kids A Candy Buy-Back For Excess Halloween Treats

Spend, Save, Eat Jars

If too much candy is the treat, a stomach ache and a mouthful of cavities will end up being the trick.

So how do you restrict your kid’s candy intake without being a Halloween buzz killer?

Offer your kids a candy buy-back program for their excess treats.

Pay by the pound, or come up with a chart of trade-in values for different categories of candies: mini to full size. I’d keep the trade-in details a secret until the next day. That way, your kids won’t run around the neighborhood trolling for specific items.

Last year, credits for Halloween candy exchanges on our family finance site were typically in the $3 to $9 range with the highest being $20. That’s quite a haul! Several of the credits were split between spending, saving, and giving. Impressive.

What can you do with the purchased candy?

  1. Eat it yourself. Probably not a great idea, but, hey, you deserve a treat every once in a while too. Save it for your cheat days.
  2. Save it for party favors. A candy stash can come in handy for your kid’s next birthday party. Add a few treats to each party favor bag.
  3. Foist it on your office mates. Why mess up your own diet? Sabotage your coworkers’ diets instead.

If you don’t want to buy your kid’s excess candy, a local dentist might. See if one is participating in the Halloween Candy Buy Back program founded by Wisconsin dentist, Chris Kammer. You can look up participating dentists by zip code on the program’s web page. I found two in my neighborhood. According to the FAQs on the site, the most common payout by participating dentists is $1 per pound.

Another organization, The National Financial Educators Council, is taking the candy for money exchange idea one step further. They advocate cutting out the middle man altogether. Stop handing out candy in the first place, and hand out money at the door instead. Yikes!

I’m not biting on that suggestion. Kids going door to door saying “Trick or legal tender?” Nah. Let’s keep the trick-or-treat tradition intact on Halloween night and moderate the consumption afterwards with a parental candy buy-back program.

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Tuesday, October 18, 2016

Run A Family Gift Card Exchange

Gift Card Turning Into Cash

Being my birthday today, I thought I’d run a quick analysis of birthday related transactions on our family finance site. (Completely anonymous analysis as always!)

These cash deposit descriptions caught my eye:

Convert Cineplex cards from Birthday


Birthday gift from XXX: Target gift card in exchange for cash

Any parent who’s seen unused or partially used gift cards pile up in a kid’s drawer might want to consider this clever idea. Let your kids turn in their gift cards to you for cash — or an equivalent deposit in a bank account or on a prepaid card. (Maybe even split that deposit between spending, saving, and giving.)

That way, your lactose intolerant daughter won’t be stuck with a (well-meaning) gift card to Ben & Jerry’s.

Or, your son, now burned out on that burrito addiction, won’t be burying that (well-meaning) gift card to Chipotle.

No sense letting those nice cards go to waste. Now your kids can spend the balance on something they really enjoy. Or, maybe even put that money to work by earning some sweet Bank of Mom/Dad interest.

What to do with all the gift cards you collect?

  1. Use them. Just because your son has Chipotle fatigue and your daughter is lactose intolerant doesn’t mean you can’t enjoy some burritos and ice cream! And what parent can’t use up a Target card in a heartbeat.
  2. Regift them. Always good to have a stash of cards around for that last minute birthday party your kid forgot to mention.
  3. Sell them. Someone else in the family might want to buy a coveted card from your stash. Or, if you’re willing to accept a discounted price, you could sell them online.

With your own family gift card exchange, you’ll help chip away at the billion dollars that’s left on the table — or in a sock drawer — every year. Also, no more long faces when Aunt Millie delivers that well-meaning but off target gift card either. Win, win.

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Monday, October 17, 2016

Charge Your Kids An Inconvenience Fee

Butler Delivering A Fee

Have your kids been treating you like a personal butler, maid, or chauffeur lately?

Clearing the cups and plates stacked up by the computer monitor.

Picking up the clothes strewn on the bathroom floor.

Donning the hazmat suit to deal with the old lunch bag left in the basement room.

Picking up the dog bombs in the back yard. Unintentionally. With your shoe.

Driving across town at the last minute in rush hour to get that thing due tomorrow morning. That thing that was assigned two weeks ago.

Perhaps it’s time to teach the kids that your time is money.

Maybe the next activity alert on your kid’s card account should read:

$5.00 from Spending Card ***1234 for: Cleaning Up Your Mess!

That will get some attention. If you’re lucky, it might just get you fired from your family servant side-hustle. Not to worry. You’ve got better paying jobs to tend to.

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Sunday, October 16, 2016

Challenge Your Kid To Find The Phishy Clues In This Text

I received this text message last Thursday:

From: support@alexandra...
We are sorry to inform you that your WellsFargoAccount is locked. Go to Thank you- SMSid{MBN295M}

Show your kids the picture of this text. Can they spot the clues that make it clearly suspicious?

  1. Odd sender. Why would a text from my bank come from an unfamiliar address at an unrelated organization?
  2. Space removal in key phrase. Notice how the spaces have been removed from “Wells Fargo Account.” This makes the bank name stand out on its own line and dominate the attention of a quick glance. Clever.
  3. Bank name in weird position of a weird link. The familiar “wellsfargo” appears in a link with 5 components instead of the typical 3. No bank would have a link like that with so many parts to the left of the final “.com”. Even odder, notice how the leftmost part of the link is two w’s followed by a v instead of the familiar three w’s.
  4. Strange company component. The part of the link just to the left of the final “.com” is where we’d expect to see the company name. If you look closely at the whole link, it actually directs to “” and not “”. Definitely bogus!

How’d your kids do?

The narrow point of this exercise is to show your kids what a typical phishing text looks like. That way, they’ll be less likely to impulsively bite on one.

The broader point of this exercise is to remind your kids to approach any communication about money with a healthy dose of caution and skepticism. Slow down. Read everything carefully. Think.

Acting quickly on impulse just gets us in trouble with money. Our impulse to tap on link. Our impulse to spend. Our impulse to be like others. Marketers and scammers prey on those impulses. Help your kids learn to let impulse and emotion subside so the analytical, skeptical part of the brain can take charge.

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Saturday, October 15, 2016

Ding Your Kids For Replacement Cards

Prepaid card left on sidewalk.

Kids lose stuff. That includes payment cards (which is one of the many reasons you don’t want kids running around with yours).

I ran some stats on our family finance site to see how common losing a card is. 5.7% of non-parent FamZoo cardholders have ordered at least one replacement card. The worst offender has ordered a grand total of 6 replacements. Doh!

So, if you plan to teach your youngster or teen how to manage money with a payment card, find one that allows you to:

  • Receive real-time alerts whenever there’s any activity on the card. That’s often your first clue that the card is no longer in your teen’s pocket.
  • Lock the card immediately from an app or web application as soon as it goes missing so nobody can use it in the meantime.
  • Transfer funds off the card immediately so you have access to the funds elsewhere — on another card or in another account.
  • Order free (or cheap) replacements with minimal hassle.

Sounds good, right?

Well, maybe.

But what if all of those conveniences make your kid cavalier about losing cards? Shouldn’t there be some consequences for being careless with money? Indeed.

So consider imposing a parent penalty for lost cards. Maybe even ratchet up the amount for repeat offenses. A warning on the first one, $5 for the second, double it for successive ones.

What do you do with the fees collected? Perhaps sweep the impounded funds into the family swear jar.

Also, before you rush to order that next replacement card, consider just locking it and waiting 24 hours instead. Many a FamZoo card has been found beneath a teen’s pile of dirty clothes.

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Friday, October 14, 2016

Teach Kids A Simple Secure PIN Strategy (VIDEO)

Dachshund and PIN keypad.

Here’s a video version of the post: Teach Kids A Simple Secure PIN Strategy.

Video Transcript

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

Remember this phrase: Colby the dachshund rocks!

More on that later...

Meanwhile, the world is going cashless. So it won’t be long before your kids are using PIN-based payment methods like prepaid cards or bank debit cards.

Using them responsibly includes learning how to pick a secure, but memorable PIN.

Parents definitely need to step up the education here. How do I know? In the last 30 days, the third and fourth most common reasons for declines on kids’ FamZoo cards are PIN related.

So, here’s a simple recipe you can teach your kids for making secure and easy-to-remember PINs:

  1. Pick a memorable four word phrase. Maybe a song title, part of a favorite lyric, a statement about your beloved pet, whatever. Just make sure it isn’t something someone else can easily guess.
  2. Map the first letter of each word to a number using a phone keypad. Bring up the dial pad on a cell phone, and look up the number for each letter. For example, 2 corresponds to A, B, or C. So, the phrase “My Dog Has Fleas” maps to 6 3 4 3. You’ll notice 1 and 0 don’t have any corresponding letters, so you could make up your own mapping there. So 1 could be an exclamation point capping off a three word phrase.
  3. Repeat until secure. If your phrase maps to something too obvious, like too many repeated or consecutive numbers, just try a different one.
  4. Keep a keypad cheat sheet. Print out a keypad image to keep in a wallet or purse for times when a phone isn’t handy.

That’s it! No more bad PINs. No more forgotten PINs.

So, what’s my secure dachshund PIN? You got it! 2 8 3 7.

Don’t worry though. Colby the Dachshund still rocks, but I changed my PIN.

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Thursday, October 13, 2016

Make Kids Journal Their Money Requests

A money request journal.

Asking mom and dad for extra money is a little too easy. Not that kids are nefarious or anything, but harried parents are a pretty easy con.

“I’m in a rush, so I’ll just flip Johnny a 5.”

“Did I just give Suzy 10 dollars on Monday, or was that last week? Man, I’m losing it!”

“I wonder if Emma already hit up Mom for that...”

“Did I ever get change back from Logan on that 20 bucks I doled out last week?”

“It sure seems like Sophia just asked to buy something like that last month, or was that Madison?”

There’s a simple solution for putting the brakes on impulsive, redundant, or (dare I say?) exploitative money requests from the kids.

Force your kids to write them down.

Make them maintain a little money request journal with columns for:

  • Date,
  • Amount,
  • Reason,
  • Approved Amount,
  • Approval/Denial Comments,
  • Adjusted Amount (if change was returned),
  • Running Total for the week or month.

Now, to get money out of you, the kids have to fill out a new line item in the journal with the date, the amount, and a reason. (If you want to ditch the pen and paper and go New School, you could use a shared Google Docs sheet or an app instead.)

Coming up with a written justification and confronting the reality of their recent request history so will often be enough to stifle impulsive asks right away.

If not, you’ll have the advantage of glancing over the recent history too. No more exploiting our parental senior moments.

If everything is ship-shape, you can approve and hand over the money without feeling taken. Or, you might negotiate a bit: “Hey, your running total for the month is getting a bit high, I’ll give you half that amount.”

Flat out denial is a distinct possibility too. Just be sure to record a thoughtful reason: “We’ve hit our agreed upon limit for In-N-Out runs this month.”

All that said, if you’re handling a ton of random money requests from the kids, you may need to fix the way you’re doing allowance instead.

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Wednesday, October 12, 2016

Use Reimbursements To Condition Teens To Maintain A Spending Buffer

Teen Requesting Shampoo Reimbursement.

I’ve written before about how I like to use a simple reimbursement process with my teens to force awareness of how expensive everyday life is.

To recap: If I just buy everyday items for my teens outright, the costs are out of sight, out of mind. But if I make them buy the items first and request reimbursements from me afterwards, they can’t help but notice the prices. See more about my reimbursement process and policies here.

Beyond learning the value of a dollar, I realized there’s an unexpected extra benefit to the reimbursement system: it conditions kids to maintain a minimum balance — a “spending buffer.” Without it, they can’t buy the item in the first place. At least, not without some parental hassle.

A spending buffer is an excellent personal finance habit.

  • It wards off embarrassing declines or painful overdraft fees.
  • It serves as a mini-emergency fund. (Suddenly low on gas? Covered!)
  • It averts monthly fees for accounts that have minimum balance requirements.

So, try moving to a simple reimbursement process for the things you’re currently buying outright for your teens. They’ll get a financial education two-fer: cost consciousness and spending buffer savviness.

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Tuesday, October 11, 2016

Show Teens How Free Checking Isn't Free

Hidden Fee Word Search Puzzle.

Your teens are old enough to know that businesses can’t survive long if they don’t make money.

So, if a mature business offers a service for free, it’s making money elsewhere. Savvy consumers figure out where. Then they remain on guard for the inevitable promotion of that other thing. And its promotion can be extremely subtle, if not downright shifty.

Free checking services from banks are a perfect example.

If a checking account doesn’t have a monthly service fee, where are banks making their money?

One key answer: overdraft fees.

So what should savvy banking consumers be on their guard for? Sneaky ways to get them to cough up overdraft fees.

Such as the cynically named “overdraft protection service.”

If you want to avoid overdraft fees, surely it makes sense to have “overdraft protection”, right?


The overdraft “protection” option is the very mechanism banks use to convince consumers to “opt in” to paying unnecessary overdraft fees. Why? Because since Regulation E passed, consumers have to explicitly opt in to be charged overdraft fees in most cases.

Why would anyone opt in to paying fees? Because they’re confused. Ironically, you have to opt out of all overdraft protection options to protect against overdraft fees.

And don’t expect your bank teller to make that clear. If anything, expect the opposite. Don’t believe me? Read this.

In fact, just last month, my colleague walked into that very same bank to tell them in no uncertain terms that he did not want any overdraft fees assessed to his son’s checking account. The branch employee assured him that overdraft protection services had been dropped. My colleague walked out thinking the matter was settled.

But, nooOOOoooOOO. A week or so later: another overdraft fee. What?

On to the 1-800 customer support line. Ahhh, it turns out the branch employee cancelled one overdraft protection service (the savings account linkage to checking), but not the other (debit card protection). Mind you, my colleague made the goal very clear the first time: NO avoidable overdraft fees on his son’s account in accordance with Regulation E. In any case, problem solved now, right?

NoooOOOooo. Days later: yet another overdraft fee. What the...?

So, back to the 1-800 number. When my colleague expressed his exasperation at being charged yet another overdraft fee, it triggered an escalation to a dispute manager. Apparently, “you guys already have a bit of a reputation for fleecing customers” is a hostile “trigger” phrase. The dispute manager was in turn unhelpful, defensive, and, it turns out, uninformed about the nuances of overdraft regulations.

SoooOOOooo, back to the local branch. My colleague called to make a second local appointment to hash things out in person with the branch manager. Fortunately, during the call, the manager finally realized that the last overdraft fee only occurred because the removal of the debit card protection takes several days before it goes into effect. The overdraft had come in during that delay. Well, that at least explains it. But the mind boggles that such delays exist in the Internet age, doesn’t it? Hmmm... fishy.

The point of the story? Let your teen know that if a service is free, you can bet there are hidden fees elsewhere. Find them. Know that business will go to extreme lengths — sometimes even illegal ones — to get you to pay them, so remain vigilant.

Ironically, a free service can be more expensive than a paid one — especially for those consumers who can least afford it. In the free checking case, it’s the consumers with chronically low balances who are subsidizing the service for the others.

And who’s a classic consumer class with low balances? That’s right. Your teens.

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Monday, October 10, 2016

Reimburse Your Teen's Uber And Lyft Rides

Teen Holding Cell Phone In Car.

I never want my teens driving after drinking.

I never want my teens getting a ride from someone else who’s been drinking.

I never want money or guilt to get in the way of those two decisions.

That’s why I tell my teens: “Uber is always on me. No questions asked.”

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Sunday, October 9, 2016

Help Kids Identify With Good Money Habits

Frugal IdentificationTag

Are you struggling to turn your kid’s positive money behavior into a consistent habit? Maybe your kid just doesn’t think frugal behavior is “cool” or relevant.

Try fusing the behavior with part of your child’s core sense of identity. That’s one of the 21 habit forming strategies described in Gretchen Rubin’s book Better Than Before.

Here’s how it works. Let’s say your kid is really into rap. Encourage your kid to identify as the “frugal rapper.” Sound crazy? After all, rapping and frugality are in conflict, right? Well, that’s exactly what rapper Dee-1 did. Check out the frugal rapper’s story here.

Is your kid a rocker? How about identifying as a frugal rocker like the members of the band Gooding.

Is your kid into sports? How about identifying as a frugal star athlete like Redskins quarterback Kirk Cousins?

Just a typical teen? How about identifying as a teen who’s “got cents” like Eva Baker?

I adopted the identity strategy early in my Silicon Valley career. In the land of fancy gadgets and even fancier cars, I was the outlier: the software executive with the boring but functional car — the cheap sedan import. My colleagues sporting BMWs and Mercedes loved to razz me. After riding in my car one day, my bemused boss even asked me, “Don’t I pay you enough?”

A string of modest used cars later, it’s still part of my persona. I just choose to spend my discretionary funds on other things. Things I really care about, like my family and my home. Self identifying as the “software guy with the crappy car” helped me resist the occasional fleeting temptation to buy a fancier car when my heart really wasn’t in it.

The bottom line: when good money habits are a part of your core identity, it makes it much easier to resist financial temptation and peer pressure.

What frugal persona can you help your kid adopt?

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Saturday, October 8, 2016

Know If Your Kids Are Gambling With Gaming Currency.

Kid On Slot Machine.

Your kids love online gaming. That means you aren’t surprised to see transactions like:


in their account histories or card activity alerts.

They’re just buying games on one of the most popular digital gaming distribution platforms, right?


Or, maybe your kids are purchasing digital gaming currency. Why? To buy and trade digital in-game items, like “skins” in the popular game “Counter-Strike: Global Offensive” (aka CS:GO). Skins are nothing more than decorative textures for game weapons. They’re purely cosmetic.

If your child is wasting hard-earned money on in-game vanity items, that’s probably something you’ll want to discuss.

Or, maybe your kids are buying and selling digital items on sketchy marketplace sites outside the game itself. In the case of Counter-Strike, look for transactions with the keyword "skin" like this:

10/9/2016 BITSKINS INC 4155159061 CA $5.46

On marketplace sites like BitSkins, gamers speculatively trade digital game loot in hopes of turning a profit.

If your child is engaging in market speculation on unregulated sites, that’s probably something you’ll want to discuss.

Or, maybe your kids are using digital gaming currency to gamble on the outcomes of online competitions or casino style games. Apparently, kids can use their Steam credentials to seamlessly log into gambling sites and place wagers using skins. That has prompted the Washington State Gambling Commission to demand that Valve Corp (the makers of Steam) prove it isn’t helping turn teen gamers into gamblers.

If your child is gambling, that’s definitely something you’ll want to discuss.

If your kid’s a gamer, it’s time to conduct a non-judgmental spending audit. Make sure that gaming habit isn’t becoming a gambling habit.

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Friday, October 7, 2016

Add An Emergency Fund To Your Kid's Money Bucket List (VIDEO)

Emergency Piggy Bank

Here’s a video version of the post Add An Emergency Fund To Your Kid's Money Bucket List:

Video Transcript

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

Spending? Check. Savings? Check. Giving? Check.

Emergency fund?

For kids? Nah.

Most people don’t learn about emergency funds until they’re off on their own. Usually it’s after they’ve already dug themselves into a big financial hole. That’s why an emergency fund is step #1 in Dave Ramsey’s famous 7 baby steps for getting your financial you-know-what together.

But what if we taught people about emergency funds much, much earlier? Like childhood.

Kids and teens certainly have plenty of little emergencies to cut their teeth on:

  • That third lost sweatshirt.
  • The hockey puck through the garage door window.
  • The massive data plan overage charge.
  • The parking ticket.

Ringing a bell? If your family’s anything like mine, your kids will have plenty of chances to cough up some emergency cash.

So here’s a simple recipe to teach your kids about emergency funds while they’re still young:

  1. Set up a separate emergency fund for your kid. Add an extra jar, envelope, account, or prepaid card to your kid’s standard set of buckets.
  2. Divert some income to fill the fund. Change your kid’s spend-save-give allocations on allowance, odd-job, or birthday payments to factor in the new emergency bucket. You can change things back once they hit the target — maybe $25 for a youngster, $100 for a pre-teen, $250 for a teen.
  3. Share some skin in the next emergency. I say share because some emergencies may extend well beyond your kid’s means. Sharing the costs on a case-by-case basis is fine. As long as there’s some shared skin in the game, the lessons will be learned.
  4. Replenish the fund. Return to step 2 to refill the emergency bucket. Rinse and repeat as the emergencies roll in.

That’s it!

If you take that baby step now on emergency funds for your kids, maybe they won’t be crawling out of debt later as young adults.

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Thursday, October 6, 2016

Teach Kids A Simple Secure PIN Strategy

Colby The Dachshund Rocks PIN Code

Remember this phrase: Colby the dachshund rocks!

Now, read on...

With everything going cashless, it won’t be long before your kids are using PIN-based payment methods like reloadable prepaid cards or bank debit cards.

Using a card responsibly includes learning how to pick a secure but memorable PIN.

Parents definitely need to step up the education here. How do I know? Because in the last 30 days, the third and fourth most common reasons for declines on kids’ FamZoo prepaid cards are PIN related: incorrect PIN entries and security holds due to too many failed PIN attempts. Together, the PIN issues make up 13% of all declines.

Here’s a simple, secure PIN recipe you can teach your kids to follow:

  1. Pick a memorable four word phrase. Maybe a song title, part of a favorite lyric, a statement about your beloved pet, whatever. Just make sure it isn’t something anyone else can easily guess.
  2. Map the first letter of each word to a number using a phone keypad. Bring up the dial pad on a cell phone, and look up the number for each letter. For example, 2 corresponds to A, B, or C. So, the phrase “My Dog Has Fleas’ maps to 6 3 4 3. You’ll notice that 1 and 0 don’t have any corresponding letters, so you can make up your own mapping there. Maybe 1 could be an exclamation point capping off a three word phrase.
  3. Repeat until secure. If your phrase maps to something too obvious, like too many repeated or consecutive numbers, try a different one.
  4. Keep a keypad cheat sheet. Print out a keypad image and keep it in your wallet or purse in case you don’t have a cell phone handy.

So, what’s my secure dachshund PIN?

P.S. Not to worry, I don’t use that PIN any more, but Colby still rocks!

P.P.S. In case you’re curious, the number one decline reason at a whopping 57% is insufficient funds. That’s a different problem for parents to tackle. Here’s one solution.

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Wednesday, October 5, 2016

Decide Who’s Taking The Lead On Your Kid’s Financial Education

Money Education Baseball

You’ve seen the embarrassing moment in baseball.

A towering fly ball is hit to an open space between fielders. Both players rush over. Both pull up short. The ball drops to the ground between them. Doh!

Is that what’s happening to your kid’s financial education?

Multiple adults are rushing around frantically with none catching the responsibility?

Who’s taking the lead on teaching your child the basics of personal finance?


Your partner?

A grandparent?

For fun, I thought I’d look up the stats of the lead-off batters ordering educational prepaid cards for kids on Here’s what I found with some simplistic matching on user names and parent card labels:

Taking The LeadPercentage
Can’t tell41.4%

So who’s saying “I got it” in your family?

Whatever you do, don’t let the ball hit the ground.

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Tuesday, October 4, 2016

Conduct A Non-Judgmental Spending Audit With Your Teen

Spending Pie Chart

Often teens have no idea how much little expenses add up over time. As Ben Franklin observed in one of my favorite quotes:

Beware of little expenses; a small leak will sink a great ship.

To help teens identify the leaks sabotaging their money row boats, conduct an occasional spending audit. If your teen’s spending is confined to a prepaid card or a bank debit card, the steps are easy.

Just follow these mini audit steps:

  1. Pick a time-frame. A month works well for older teens who have regular discretionary spending. Longer periods make sense for younger kids who spend less frequently.
  2. Export the transactions for the period. Good online banking or card offerings will have a simple way to download transactions for a specific time period into a spreadsheet.
  3. Identify a few key categories. Eyeball your teens transactions and look for just a few common recurring categories. Fast food? Online gaming? Starbucks runs? Keep it simple and relevant here.
  4. Add a category column. Add a column to your spreadsheet that assigns each transaction to one of the handful of categories identified above.
  5. Sum up the totals in each category. The SUMIF function in Excel or in Google sheets comes in handy here. Use it to construct a simple table summarizing the total expenditures in each category for the period
  6. Draw a clear picture. Make a simple pie chart or bar chart that highlights the total spending by category.
  7. Discuss, don’t judge. Discuss the results casually without judgment or emotion. If you can’t, find the spouse, partner, relative, or mentor who can. You want to lay the groundwork now for financial transparency and consultation later when the stakes are much higher.

Keeping the audit simple and non-judgmental is critical!

Let your teen own the discovery. You want to create the shortest path to that “Aha” moment: “Oh, wow! That stuff really adds up!” Ideally followed by the epiphany: “Just think how much I could save if I ratchet that back a bit or find a cheaper alternative.”

Bingo! That’s how kids learn to right their own financial ships.

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Monday, October 3, 2016

Ditch Directives And Tell Kids Real Money Stories

Woman telling kids a real money story.

Don’t let your ego or your emotions dictate what you buy! Always do your research before making a big purchase!”

“Yeah, Dad, whatever...”

Money directives hurled at your kids — “Don’t do this! Always do that!” — have a way of going in one ear and right out the other.

Try a real money story featuring yourself instead.

Like this one:

When your mom and I were first married in the mid ‘80s, the second generation Jeep Cherokee was all the rage. In fact, it was the pioneer of the modern SUV and the object of desire of hip young couples everywhere. You know, like your mom and I. So, naturally, I thought we had to have one.

I took your mom down to the car lot one weekend where we found a fire engine red Cherokee. The salesman assured me it was an ‘amazing’ deal and how lucky we were to snag it. The other salesmen all gave us big smiles and big thumbs up as we closed the deal.

I remember glancing in the rear view mirror to see them chuckling with one another as we drove it off the lot. It gave me a sinking feeling. The first of many.

The first time I drove it up a moderate grade, I got another sinking feeling. The 4 cylinder engine was completely gutless. Known problem. Should have got the 6.

When we drove from LA to my parent’s house near SF, we got another nice little surprise. Unbeknownst to me, that model was notorious for its shoddy radiator. Sure enough, we wound up stranded late at night on the side of Highway 5 in the middle of nowhere. We were halfway through our 400 mile trek with steam spewing out of our radiator. I cursed a blue streak as tried to flag down trucks barreling by. My frantic efforts were in vain. I probably looked slightly on the edge of sanity.

Your mom popped out of the car to replace my unsuccessful efforts. Not ten seconds later, a trucker was screeching to a halt to assist. Hmm. Let’s just say that your mom was a much more compelling reason to stop than I was...

Anyhow, after a little trucker-savvy jury rigging of the radiator, we were back on our way. I now had a nice 200 mile stretch to think about how quickly I could unload that piece of junk Cherokee.

So kids, the next time you’re considering a big purchase, just think of me and my crappy Cherokee. Ask yourself whether your ego or your emotions are driving your purchase. And, by all means, do your research before you pull the trigger.

Pro tip: the more of a money moron you are in the story, the more memorable and effective it will be.

Got a good money story for your kids?

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Sunday, October 2, 2016

Know When Starbucks Pressure Kicks In With Kids

Coffee In A Cup

If you frequent Starbucks regularly like I do, you’ll notice the habit starts pretty darn early. I often see gaggles of kids hanging out there before and after school.

Which got me to thinking: I wonder what age the Starbucks habit kicks in these days.

So I sifted through transactions over the last year to find the answer. Here’s what I found. It kicks in significantly at age 12 and takes it up another big notch at age 14 (see chart).

Bar chart.

That makes sense. The first bump roughly coincides with the passage into middle school and the second with high school. Those are two classic transitions where kids naturally enjoy more independence and an increased desire to emulate adult habits.

So, is this early Starbucks affinity bad? Well, I can certainly think of much worse places for kids to hang out. In the grand scheme of things, Starbucks is a clean, safe, and harmless social venue.

But it is pricey. The average transaction amount we see for a 14 year old is $6.26. That’s right up there with what we found for average fast food purchases by kids.

Three takeaways for parents:

  1. Realize that kids will come under increasing peer pressure to make outings to Starbucks (and other popular establishments) as they transition to middle school and onto high school.
  2. Set some budget boundaries ahead of time to keep spending under control.
  3. Arm your kids with some preemptive money conversation scripts to avoid awkward interactions with friends while politely declining to overspend.

Just a few things to ponder over your next pumpkin spice latte.

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Saturday, October 1, 2016

See 75 Random Things Kids Are Saving For.

Saving jar.

Seeing what kids are saving for can be revealing, amusing, classic, impressive, and even inspiring.

Here are 75 random savings goals kids have created recently on

  1. iPhone7.
  2. An awesome Razor scooter.
  3. LEGO City Police Station.
  4. Harry Potter Hermione “...I’m Highly Logical...” Magnet.
  5. LEGO Super Heroes Jokerland Building Kit.
  6. Lil Woodzeez Family Treehouse 22-Piece Playset.
  7. A donation on
  8. An adoptive family travel heritage trip to Guatemala.
  9. Playstation 4.
  10. Disney souvenir money.
  11. A manicure.
  12. FIFA 17 Standard Edition.
  13. Snap circuits.
  14. Christmas shopping fund.
  15. Rick Riordan’s Magnus Chase and the Gods of Asgard book series.
  16. LEGO Ghostbusters Firehouse Headquarters Building Kit
  17. iPod Touch
  18. Super Deluxe Bow and Arrow Costume Accessory Set
  19. The Pokémon Sun game for the Nintendo 3DS.
  20. Summer camp (with a savings match from Mom).
  21. National Wildlife Federation’s Ultimate Wild Animal Baby Adoption Kit
  22. A pocket knife.
  23. Soccer team road trip.
  24. LEGO Ninjago Blaster Bike
  25. Bird necklace.
  26. “This X-Box will allow [sister’s name] and I to bond even further than minecraft. We will be able to play The Sims together, possibly LEGO Dimensions, and LEGO Star Wars games!! We will pay for all the games and we promise we will always finish our homework before even LOOKING at the X-Box. We will always be responsible and change the input of the TV back to Cable when we're done. The only thing we ask of you is that maybe you could pay half of the cost? I mean it's only $140 for you and $140 for me. sooooo yeah!!”
  27. An investment in the stock market.
  28. iPad mini
  29. Birthdays, Father’s Day, Mother’s Day, Christmas, and more celebrations.
  30. Minecraft.
  31. A $50 emergency fund.
  32. Hover board.
  33. Seed funds to start a company at 18.
  34. Magic: The Gathering.
  35. A puppy, including transportation and vet visits.
  36. A Chromebook.
  37. A 3D Doodling Pen.
  38. A graphics card upgrade.
  39. Beanie Boos Safari the Giraffe
  40. “I want to get a phone sooo bad, mostly because everyone else has one. But also because mine is running out of storage and the camera is half broken.”
  41. Junior drum set.
  42. Disneyland tickets.
  43. A fit bit.
  44. A survival backpack.
  45. A dirt bike.
  46. Horse riding boots.
  47. “I love mom very, very much and I want to buy her pretty things!”
  48. To go on dates.
  49. College.
  50. MacBook.
  51. Electric violin.
  52. Road bike.
  53. Kinect.
  54. Earbuds.
  55. A car by Summer 2023.
  56. A church mission trip.
  57. A used Xbox.
  58. A $500 emergency fund by age 18.
  59. A phone insurance fund (in case it’s broken or lost).
  60. Hamster cage, bedding, and food.
  61. Concert fund.
  62. Basketball, baseball and football shoes
  63. Paintball.
  64. 3D printer.
  65. American Girl doll.
  66. A new hair style.
  67. Airsoft gun.
  68. Parrot Mini Drone Jumping Sumo
  69. Washington D.C. trip.
  70. Donation to Alzheimer’s disease research.
  71. Apple iWatch.
  72. Aero sweater.
  73. A Kindle.
  74. Baseball batting practice.
  75. Dragon shield sleeves.

What’s your kid saving for?

See anything on that list that makes you want to sit down and have a saving discussion with your child today?

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