children and money http://www.wisebread.com/taxonomy/term/9693/all en-US 12 Ways Kids Can Teach Us About Money http://www.wisebread.com/12-ways-kids-can-teach-us-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-ways-kids-can-teach-us-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mom-daughter-money-156796282-small.jpg" alt="family money" title="family money" class="imagecache imagecache-250w" width="250" height="156" /></a> </div> </div> </div> <p style="margin-left: 40px;">&quot;If someone gave me $10, I would buy a toy from the movie Frozen,&quot; recently said one of my favorite 8-year-olds.</p> <p style="margin-left: 40px;">&quot;What if the store didn't have the one you wanted?&quot; asked his mom.</p> <p style="margin-left: 40px;">&quot;Then I would save my money.&quot;</p> <p>With their untarnished idealism and often very pragmatic ways of thinking, kids can teach us a lot about life &mdash; and about money.</p> <h2>1. There Is Magic in a Single Dollar Bill</h2> <p>From early on, we learn that it's fun to get money. Holding a dollar bill means we get to buy a dollar's worth of <em>something</em>. Sometimes a little treat &mdash; like candy &mdash; brings a lot of excitement. Take a kid into a bulk candy store with a dollar bill in hand, and watch the magic come alive.</p> <p>At any age, no matter the dollar amount, money translates into buying power and the ability to make choices. As adults, we can reclaim that same child-like excitement when someone gives us a $10 Starbucks gift card. It's not that the $10 will make or break our wallets, but the fact that it's a gift often adds a little magic to the coffee and scone we choose to buy with that gift card.</p> <h2>2. What You Buy Is More Important Than Where You Buy</h2> <p>Do you remember how beautiful you felt when you wore your hot pink, bedazzled T-shirt to the first day of 2nd grade? Chances are, you didn't really care whether it came from a thrift shop, a discount store, or an upscale retailer. Kids generally care about what they are wearing or receiving as a gift than where it was purchased. Many adults reverse the emphasis.</p> <h2>3. Special Purchases Are Worth the Wait</h2> <p>When a child sees a commercial for a certain doll/truck/game, that's the one they want. Kids usually have to wait if a store is out of that specific item &mdash; especially if they &quot;<em>really, really, really&quot;</em> want it. After they've seen it &mdash; at a friend's house, at school or on TV &mdash; they understand that they need to wait for an adult to first approve the purchase, and later take them to a store to make the purchase. The anticipation builds, and that makes buying (and having) it that much more satisfying.</p> <p>Adults can experience that same gratification as a result of anticipating a purchase, whether it's a new car or a new pair of sunglasses. Don't settle for what might be readily available; take a lesson from the kids and wait for the item that you <em>really, really, really</em> want.</p> <h2>4. Saving Is Fun!</h2> <p>Many parents teach their children to save money by incentivizing the process, or making it a fun challenge. Beth Kobliner, author of <a href="http://www.amazon.com/gp/product/0743264363/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0743264363&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=CLU3ARSMMUCO42EC">Get a Financial Life</a>, says that &quot;children as young as three years old can grasp financial concepts like saving and spending.&quot; She offers the following suggestion to help make saving fun: Have a child set a realistic savings goal to buy a specific item. &quot;Every time your child adds money to the savings jar, help her count up how much she has, talk with her about how much she needs to reach her goal, and when she will reach it.&quot;</p> <p>That same activity could be very gratifying for adults as we save up for big-ticket items or even small indulgences.</p> <h2>5. Money Is Finite</h2> <p>By pre-school, kids have an understanding that money doesn't grow on trees, but many still assume that it is somehow always available to grownups thanks to <a href="http://www.dailymotion.com/video/x144h7f_our-panel-of-kids-share-their-money-thoughts_people">banks, ATMs, and &quot;factories</a>.&quot;</p> <p>Still, when a child holds a $10 bill at a toy store, he knows that a $12 purchase isn't possible. As adults, with wallets full of plastic money, we sometimes forget that concept; hence the <a href="http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/">average U.S. household credit card debt</a> stands at over $15,000. The concept of &quot;buy now, pay later&quot; can land many adults in perilous waters. (See <a href="http://www.wisebread.com/what-is-your-financial-kryptonite-and-how-to-conquer-it?ref=seealso">What Is Your Financial Kryptonite &mdash; and How to Conquer It</a>)</p> <h2>6. Make Wise Choices</h2> <p>What might present itself as an agonizing decision over choosing the Matchbox sports car or fire truck can turn into excitement once the decision has been made. But it might take a lot of hemming and hawing that we can't understand (&quot;It's just a $2 toy car!&quot;).</p> <p>As much as we may like them, in some ways, liberal return policies have made us lazier consumers as adults. Kids tend to stay truer to their purchases; as such, they often make more contemplative decisions. Not a bad practice!</p> <p>At the same time, kids can teach us that it's okay to make a financial mistake. Kids rarely beat themselves up if they make a bad purchase. They tend to look to the next &quot;buying opportunity&quot; right away rather than wallow in buyer's remorse, as adults sometimes do.</p> <p>The good news: As adults, capable of higher level thinking &mdash; and making higher priced mistakes &mdash; we can take steps to avoid buyer's remorse. According to Kelly Kiyeon Lee, co-author of a report in the Journal of Consumer Research, one way to avoid is to take the time to really think about the value of the product, including short-term and long-term benefits, she says. Another is to learn from past mistakes, especially high-ticket impulse purchases.</p> <h2>7. Big Isn't Always Better</h2> <p>Kids can find the joy in a &quot;cool&quot; passageway in a tiny house, or lighted cup holders in an economy car. Sometimes, we grown-ups forget that magic, and focus on the price tag as an indicator of what's &quot;better,&quot; particularly when it comes to houses, cars or other big-ticket items. The problem is that reality limits our budgets, so while a $750,000 home may have more &quot;wow&quot; appeal, we can find the joy in the $250,000 home &mdash; or an $800/month apartment &mdash; if we open our minds to it.</p> <h2>8. Impulse &quot;Wants&quot; Are Inevitable; Impulse &quot;Buys&quot; Are Not</h2> <p>Speaking of impulse purchases, if you've ever had an &quot;assistant&quot; accompany you to the grocery store, you know that temptations lurk in certain aisles (think cereal, snack, cookie &hellip;) and other strategic locations throughout the store. End caps and checkout lanes can be present particularly brutal challenges. Fortunately, as the wallet-holding adult, you can moderate their impulse wants, and put the kibosh on the impulse buys. As grown-ups, we often need to remind ourselves to listen to the &quot;adult moderator&quot; in our brain telling us we don't really need that purse &mdash; even if it is super cute.</p> <h2>9. Money Can Help People</h2> <p>Whether it's donating a portion of their allowance to the church collection basket or contributing to a specific cause, kids learn from an early age that altruism feels good, and that if a lot of people chip in a little bit, great things can happen &mdash; towns hit by natural disasters can be rebuilt, cures for diseases can be researched, and other good causes can benefit from contributions, however small. It is their collective power that packs the punch &mdash; and can make a difference in one or many lives. And that feels good. (See also: <a href="http://www.wisebread.com/surprisingly-easy-ways-you-can-support-charity?ref=seealso">Surprisingly Easy Ways You Can Support a Charity</a>)</p> <h2>10. Free Is Fun!</h2> <p>Going to the ice cream shop on &quot;free cone day&quot; gives kids a thrill, even though, in most cases, ice cream is always &quot;free&quot; to them if Mom or Dad pays. Long line? No problem &mdash; the ice cream cone is free!!</p> <p>When the cosmetic rep offers you a free fragrance sample, why not take one? Free gift with purchase &hellip; free samples at the warehouse store? Sure! Last week I called Under Armour customer service to inquire about a replacement strap on a gym bag. When they offered to send one to me &mdash; for free! &mdash; I felt like it was gold.</p> <h2>11. Money Can Be Negotiated</h2> <p>In fact, financial negotiations can start at a young age for many kids. &quot;If I do more, can I earn more?&quot; &quot;When I turn 12, will you increase my allowance?&quot; Even requests for a special pair of soccer shorts can be turned into negotiation, wherein kids have to make a compelling argument to the parent whose reflexive response is &quot;no.&quot;</p> <p>In a recent CNN Money article debating the pros and cons of giving kids an allowance, Jayne Pearl, author of <a href="http://www.amazon.com/gp/product/1576600645/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1576600645&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=AXZMNXJ7T5I3LE2R">Kids and Money: Giving Them the Savvy to Succeed Financially</a> asserts the importance of an <a href="http://money.cnn.com/magazines/moneymag/money101/lesson12/index2.htm">allowance as a teaching tool</a>. &quot;Negotiation skills are an important part of that [learning], which they're going to need for dealing effectively with friends, teachers and, eventually, their bosses,&quot; she says.</p> <p>Those basic negotiation skills can help us get the best price on a car, house, a dining room set at an estate sale, and at other points of sale where bargaining is appropriate. They also come in handy when accepting a job offer, asking for a raise, or making joint financial decisions with our spouses.</p> <h2>12. Money Does Not Equal Worth</h2> <p>Most kids don't make a connection between success and money. Sure, most have seen enough TV to assume that a lot of famous athletes, singers, and actors are &quot;rich&quot; and therefore live in lavish houses and drive fancy cars. But their favorite teacher may be the lowest on the school's pay scale, and their best friend may live on the &quot;other side of the tracks.&quot; Most kids don't notice, care, or take stock of others' net worth.</p> <p>What a great reminder for us adults.</p> <p><em>Have your children taught you any lessons about money? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mardee-handler">Mardee Handler</a> of <a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-personal-finance-lessons-from-the-hobbit">5 Personal Finance Lessons From “The Hobbit”</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids">Money Mistakes Two Popular Board Games Teach Kids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance children and money financial education money lessons Thu, 17 Jul 2014 13:00:03 +0000 Mardee Handler 1160247 at http://www.wisebread.com How to Raise Your Kids to Be Financially Independent http://www.wisebread.com/how-to-raise-your-kids-to-be-financially-independent <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-raise-your-kids-to-be-financially-independent" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy-bank-3246058-small.jpg" alt="piggy bank" title="piggy bank" class="imagecache imagecache-250w" width="250" height="192" /></a> </div> </div> </div> <p>A recent Pew Research study confirms what most of us already know&nbsp;&mdash; a growing number of adult children are either <a href="http://www.forbes.com/sites/moneywisewomen/2012/06/06/failure-to-launch-adult-children-moving-back-home/">delaying their departure from home or are moving back</a> after a false start.</p> <p>In all fairness to this generation of young adults, they just happened to enter adulthood during a deep, prolonged recession. To make matters worse, this recession has also been accompanied by a fundamental restructuring of our economy; so unfortunately things don't look much better for the generation that follows, either. (See also: <a href="http://www.wisebread.com/7-important-lessons-frugal-parents-teach-their-children">7 Important Lessons Frugal Parents Teach Their Children</a>)</p> <p>That's something the children can't control. But what can be controlled is how well prepared they are to deal with it. And their success or failure on that score will impact not only their own financial future, but also yours &mdash; for the longer your children remain financially dependent on you, the more it can delay or even jeopardize your retirement.</p> <p>So, what can you as a parent do to reduce the &quot;boomerang&quot; risk and ensure your kids are financially independent?</p> <h2>Set Expectations: Share the Bigger Goal</h2> <p>When raising our two boys we established and tried to achieve three broad goals. We communicated these goals to them early and often. The hope was that if they had a clear understanding of what was expected of them it would help to anchor them and give them focus.</p> <p>We summarized our goals as &quot;IRC&quot;:</p> <ul> <li>Independent (learn to live independently)</li> <li>Responsible (take responsibility and be accountable for your actions)</li> <li>Caring (care for and respect others&hellip;and yourself)</li> </ul> <p>An important part of achieving the first goal &mdash; of becoming Independent &mdash; meant <a href="http://www.wisebread.com/financial-literacy-for-young-adults">learning how to manage their own finances</a>. For help with this we were fortunate to receive some well-timed advice. At our oldest son's first birthday party a couple we knew mentioned that they set up a savings account for each of their children just before they were born. The couple deposited into the accounts every dollar the kids received on birthdays, holidays, and special occasions.</p> <h2>Start Early With Savings</h2> <p>Because the couple started so early, over the years their savings grew to a tidy sum. This was our first lesson, and it got the ball rolling for us.</p> <p>So we immediately opened a savings account for our firstborn. Not just any account, a passbook savings account. Why? Because, unlike a statement savings account, withdrawing money from a passbook account is inconvenient; it requires actually going to the bank &mdash; and during banker's hours no less. But inconvenient is what we wanted, for if making withdrawals was as simple as using an ATM card or clicking a mouse, then it would have been much easier to yield to the temptation of taking out some money &quot;just this one time.&quot;</p> <h2>Make It a Team Effort</h2> <p>Soon our oldest son was joined by a younger brother and before we knew it, they were both in middle school. It was then that we introduced them to their savings accounts and encouraged them to take a more active role in the activity. Whenever money came their way, they accompanied us to the bank. With each deposit came a sense of accomplishment, knowing that they were contributing to a steadily growing savings amount.</p> <p>Also, as an incentive to start adding their own money to the gifts they received from others we contributed a dollar-for-dollar match to each child's own deposit, much like a 401(k) program.</p> <h2>Add Investments to the Mix</h2> <p>Not too long afterwards, we introduced <a href="http://www.wisebread.com/getting-kids-started-with-the-stock-market">an investment component to the mix</a>. Each child (actually, they were young adults now) could allocate a portion of their savings to one or two stocks. In keeping with the &quot;teamwork&quot; philosophy, stock selections were jointly made by the whole family.</p> <p>Adding stocks made things a lot more interesting and also increased their engagement considerably, because it introduced the element of risk. Up until then, there was only one way their savings balance could go&nbsp;&mdash; up. Now it could go down, but it could also rise faster than if it were pegged to the bank's low fixed interest rate on the savings component.</p> <p>Some stock prices did fall, so as these lessons were learned and as they began to understand more about how the stock market worked, we allowed them to make a small number of additional trades. (And to be fair, my wife and I secretly agreed to make them whole if by the time they graduated college their stock picks didn't at least break even.)</p> <h2>Monitor Progress With Financial Statements</h2> <p>By the time the boys were in high school they were fully engaged in this effort. Capitalists that they are, they even started making fairly sizable deposits into the account from after-school job earnings.</p> <p>As &quot;portfolio manager&quot; I created and distributed quarterly account summaries. These summaries helped them monitor their progress and also prepared them for reading and understanding the financial statements they would later receive and use after leaving the nest.</p> <h2>The End Game: Setting a Final Goal</h2> <p>As high school graduation approached, each account had grown to over $15,000. That was considerably more than any of us had expected. With both boys planning to attend four-year college, we decided that the accounts would be turned over to them after earning their undergraduate degrees. This gave us an opportunity for a final shared activity &mdash; goal setting.</p> <p>The logical place to apply the money was on college debt. Average student loan debt for college graduates who borrow is now nearly $30,000, so repaying all or a healthy chunk of it creates an opportunity to begin adulthood in a strong financial position. In our children's case, college was (and continues to be) paid for by dear old Mom and Dad. So they have an even better chance at not only being debt-free when entering the working world, but actually having a considerable amount of savings to help them get &mdash; and hopefully stay &mdash; ahead.</p> <h2>Lessons Learned</h2> <p>When we opened the first savings account around 20 years ago, we didn't know what it would lead to. The activity evolved and changed over time and, for us, it ultimately created an opportunity to accomplish many things.</p> <ul> <li>It introduced our children to the concept of saving and the positive effects of compound interest over an extended period of time.</li> <li>It introduced them to stock market investing, risk, and the learnings that come with failure.</li> <li>It gave our children a hands-on opportunity <a href="http://www.wisebread.com/a-recipe-for-youth-financial-literacy">to set and achieve financial goals</a>.</li> <li>It evolved into a process involving engagement, family teamwork, and collaboration.</li> </ul> <p>And it did one other thing &mdash; it gave our children an opportunity to get ahead early in the game.</p> <p>Hopefully the experience will nudge the odds in favor of reducing their financial dependence on us as they enter this brave new world. Perhaps this approach can be used in some fashion by your family or by others close to you to help their children get ahead, too.</p> <p><em>Are you teaching your children how to be financially independent? What does your lesson plan look like?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/how-to-raise-your-kids-to-be-financially-independent">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">12 Ways Kids Can Teach Us About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-money-tools-and-toys-for-every-age-group">The Best Money Tools and Toys for Every Age Group</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/teaching-kids-about-money-an-interview-with-dr-brad-klontz">Teaching Kids About Money: An Interview with Dr. Brad Klontz</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/teaching-preschoolers-about-money-an-interview-with-beth-kobliner">Teaching Preschoolers About Money: An Interview With Beth Kobliner</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family children and money financial edication money lessons teaching kids about money Fri, 09 Aug 2013 09:48:30 +0000 Keith Whelan 980771 at http://www.wisebread.com 7 Places Teens (and Adults) Can Learn About Money http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-places-teens-and-adults-can-learn-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/students-512822-small.jpg" alt="students" title="students" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>We all want to encourage financial literacy in our teens (and ourselves). But what exactly does that mean, how is financial literacy best accomplished, and where can you go to learn? (See also: <a href="http://www.wisebread.com/the-best-money-tools-and-toys-for-every-age-group">The Best Money Tools and Toys for Every Age Group</a>)</p> <h2>What to Learn</h2> <p>Financial literacy is defined by the <a target="_blank" href="http://www.financialeducatorscouncil.org/financial-literacy-definition.html">National Financial Educators Council</a> as &quot;possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual's personal, family and global community goals.&quot;</p> <p>At the practical level, courses and workshops on financial literacy typically cover one or more of these topics:</p> <ul type="disc"> <li>Earning</li> <li>Budgeting</li> <li>Spending</li> <li>Borrowing</li> <li>Saving</li> <li>Investing</li> </ul> <p>Developing financial literacy and competency is a two-step process. First, learn foundational, timeless principles for managing money (e.g., spend less than you earn to save money; take more risks to earn higher investment returns).</p> <p>Next, develop an understanding of real-life practices, which evolve with trends and technology. For example, comparison shopping and investing today is much different than years ago before mobile apps and <a target="_blank" href="http://www.wisebread.com/a-guide-to-online-brokers-for-investing-newbies-and-beyond">online discount brokerages</a>. <a target="_blank" href="http://www.wisebread.com/certainties-death-taxes-and-change">Regulations pertaining to taxes</a>, saving for retirement, handling financial transactions, and more also change frequently.</p> <p>Understanding a general principle is important and then learning how things work within the current context is crucial for navigating personal finance.</p> <h2>How to Learn</h2> <p>In my experience, the best way to learn is to gain knowledge about key topics and then field test principles in the real world.</p> <p>For example, I've discovered that some banks are more likely to alert you to problems or waive fees than others, despite what their printed materials may state. Similarly, the concept of risk tolerance is best grasped by gauging my reaction to investment losses following bad economic news, not by listening to a lecture about market fluctuations.</p> <p>The hands-on approach reinforces concepts in ways that simply consuming information cannot. Still, personal trial and error can be a costly way to learn. Talking with your parents, friends, and colleagues about their experiences can be an effective way to gain insights into financial matters without the money-related consequences.</p> <p>An effective program is project-based, fun, interactive, and relevant to current needs according to Jim Clark, President and CEO of the <a target="_blank" href="http://www.bgca.org/Pages/index.aspx">Boys &amp; Girls Clubs of America</a>. His organization offers a financial literacy course that has educated more than 500,000 teenagers since its inception about 10 years ago. He attributes its success to a design that &quot;puts concepts into practice through experience.&quot;</p> <h2>Where to Learn</h2> <p>There are many places to learn about personal finance, many likely available in your area. Take advantage of opportunities in places you already go, like high school or the library, or seek out courses beneficial in helping you to make good decisions without angst. Here are several places that you may want to check out.</p> <p><strong>1. Boys &amp; Girls Clubs of America</strong></p> <p>The Boys &amp; Girls Clubs of America offers <a target="_blank" href="http://moneymattersmakeitcount.com/Pages/default.aspx">Money Matters</a>, a program developed and sponsored by the <a target="_blank" href="http://www.schwabfoundation.org/">Charles Schwab Foundation</a>.</p> <p>An adult facilitator who is a positive personal-finance role model guides participants through lessons that include discussions of real-life experiences in a small group setting. These talks include challenges that teens face, such as finding money to attend college and lessons learned from mistakes, such as bouncing a check or getting dinged with late fees. Through sharing of struggles and triumphs, along with adult mentoring and guidance, teens learn good financial practices from each other plus receive support and encouragement.</p> <p>Teens are kept engaged by being recognized for their efforts and given a forum to &ldquo;show off.&rdquo; For example, Money Matters graduates are recognized for completing the program and are eligible for college scholarships. They can also participate in the <a target="_blank" href="http://bgca.org/m4/Pages/m4.aspx">Money Matters Music Mogul</a> contest.</p> <p><em><strong>Adult Version:</strong></em></p> <p>For adults 50 and older, AARP offers a three-part workshop entitled <a target="_blank" href="http://www.aarp.org/aarp-foundation/our-work/income/finances-50-plus-financial-capability.html?cmp=RDRCT-FINANC_AUG16_012">AARP Foundation Finances 50+</a>, a new program also developed and sponsored by the Charles Schwab Foundation. Face-to-face guidance is offered in several metropolitan areas. The participant guide and volunteer leader guide are available for <a target="_blank" href="http://www.aarp.org/aarp-foundation/our-work/income/finances-50-plus-financial-capability/bring-to-your-community/">free (you can download files or order a printed copy</a>).</p> <p><strong>2. Student-Run Banks and Credit Unions</strong></p> <p><a target="_blank" href="http://www.dailyfinance.com/2010/03/09/bank-branches-in-high-schools-a-good-financial-lesson/">Banks and credit unions</a> may have branch offices in local high schools. Students who help run the branches can develop working knowledge of banking systems. Often, hands-on experience is combined with a business class associated with the bank or credit union operations.</p> <p>Teenage customers can open and manage their accounts at these branches, allowing them to become familiar with banking practices. Specific skills they gain are basic but essential, such as how to open an account, make a bank deposit, check an account balance, and withdraw money for expenses. Plus they can learn that though banking services are often available 24/7 online, branch offices have limited hours.</p> <p><em><strong>Adult Version:</strong></em></p> <p>Local credit unions may offer educational resources that cover topics such as establishing credit, borrowing for your first home, and general money management.</p> <p>For instruction on how your checking account and savings account work, arrange to sit down with a knowledgeable representative. They should be able to explain monthly and transaction-based fees, ways to minimize fees, and methods of avoiding a shortfall or insufficient funds for payments you initiate.</p> <p><strong>3. High School Civics and Economics Classes</strong></p> <p>Though both of my kids have taken required coursework in civics and economics, the class seemed to make the biggest impression on my youngest son.</p> <p>Most memorable was the documentary &quot;Maxed Out,&quot; which the teens watched in class. The film covers predatory lending practices of many financial institutions. My son&rsquo;s synopsis of lessons learned: &ldquo;you go to college, you get a credit card, you max out the credit card, and then you die.&rdquo;</p> <p><em><strong>Adult Version:</strong></em></p> <p>&quot;Maxed Out&quot; is available for <a target="_blank" href="http://vimeo.com/57295979">viewing online</a> and through streaming services, such as Netflix.</p> <p><strong>4. Scouting Programs</strong></p> <p>Scouting programs, such as Boy Scouts of America and Girl Scouts, offer many ways for teens to learn about personal finance and money management. Fund-raising activities for camping trips, special outings, and troop operations can help kids of all ages understand that money is needed for various activities. Plus, there are <a target="_blank" href="http://www.wisebread.com/money-making-lessons-from-the-girl-scouts">lessons to be learned from Girl Scout cookie sales</a>.</p> <p>Badges for <a target="_blank" href="http://www.girlscouts.org/program/gs_cookies/pdf/2012_Financial_Empowerment_singlepages.pdf">financial empowerment in Girl Scouts</a> (PDF) cover topics such as budgeting, comparison shopping, establishing credit, saving for large purchases, and entrepreneurship. The <a target="_blank" href="http://www.scouting.org/scoutsource/BoyScouts/AdvancementandAwards/MeritBadges/mb-PERM.aspx">Boy Scouts&rsquo; Personal Management merit badge</a> deals with planning for major purchases, making decisions about investing, household budgeting, and more.</p> <p><em><strong>Adult Version:</strong></em></p> <p>Parents can learn by teaching badges or sitting down with their teens as they cover the curriculum. They may find badge exercises to be useful, such as <a target="_blank" href="http://meritbadge.org/wiki/images/f/fa/Personal_Management.pdf">tracking income, expenses, and savings for 13 weeks</a> (PDF).</p> <p><strong>5. College Classes</strong></p> <p>Many colleges and universities offer personal finance classes as part of their degree programs. Courses may be focused in investments, fixed income, real estate investing, and entrepreneurship. Learn in your teenage or young adult years before entering the workforce or starting a business.</p> <p><strong><em>Adult Version:</em></strong></p> <p>Pick up classes at your local university or community college offered through <a target="_blank" href="http://www.aacc.edu/finance/">continuing and professional education</a>. Choose among courses such as personal taxation, retirement planning, and investing.</p> <p><strong>6. Community Venues</strong></p> <p>Community venues, such as public libraries, often host financial literacy workshops and classes for teens. Topics covered may include <a target="_blank" href="http://local.cincinnati.com/share/story/204830">investing</a>, <a target="_blank" href="http://www.philadelphiaspeaks.com/forum/north-philadelphia/9541-financial-literacy-teens-widener-branch-library.html">saving for college</a>, and <a target="_blank" href="http://www.tcpalm.com/news/2013/apr/15/kids-and-teens-learn-how-to-be-money-smart-april-2/">managing a bank account</a>.</p> <p><em><strong>Adult Version:</strong></em></p> <p>Seminars and workshops on financial topics for adults are generally available at public libraries and community centers. Multi-week courses, such as <a target="_blank" href="http://www.daveramsey.com/fpu">Financial Peace University</a>, are often held at churches and other houses of worship or community gathering places.</p> <p><strong>7. Home</strong></p> <p>You can learn about money at home, often in collaboration with your parents, siblings, and friends.</p> <p>Things that my teens have learned recently include how to:</p> <ul type="disc"> <li>Sell items on eBay</li> <li>Get college textbooks and supplies at a discount</li> <li>Transfer money from PayPal accounts to bank accounts</li> <li><a target="_blank" href="http://www.wisebread.com/7-delayed-spending-tricks-that-help-pay-off-debt">Delay spending</a> to get a price reduction</li> <li>Forgo spending to save for future needs</li> <li>Set aside gifts and windfalls for large purchases</li> </ul> <p>They&rsquo;ve also learned that savings accounts pay very little interest right now though having money set aside is valuable by itself.</p> <p>There&rsquo;s much more to learn but I&rsquo;ve found that teens learn best when financial lessons are timely and relevant. Instructors can be parents, sisters and brothers, and friends who are willing to provide guidance and give ideas on what has worked for them.</p> <p><em><strong>Adult Version:</strong></em></p> <p>When you are ready to make a financial decision, learning all about a subject is desirable. Tapping the knowledge of your spouse, parent, friend, or even teenager can help you navigate personal finance issues.</p> <p>A big difference between adults and teens, though, is that there are many topics you need to understand now, before a crisis or major financial decision. For example, you can&rsquo;t wait until retirement to figure out how to generate income for household expenses. You must learn today how to develop streams of income to fund your retirement in the future.</p> <p>Many financial literacy programs encourage you to apply concepts while you are participating. If not, though, act on your own. Open an IRA and start investing soon after you finish an investing class, for example. The sooner you use newly acquired knowledge, the better for your financial literacy and the faster your financial savvy will grow.</p> <p><em>Where have you learned financial literacy?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">12 Ways Kids Can Teach Us About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-financially-educate-your-children">How to Financially Educate Your Children</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/teaching-kids-about-money-an-interview-with-dr-brad-klontz">Teaching Kids About Money: An Interview with Dr. Brad Klontz</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/essential-money-lessons-for-recent-grads">Essential Money Lessons for Recent Grads</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-recipe-for-youth-financial-literacy">A Recipe for Youth Financial Literacy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family children and money financial education financial literacy teens Fri, 17 May 2013 10:24:31 +0000 Julie Rains 974090 at http://www.wisebread.com The 5 Best Credit Cards for College Students http://www.wisebread.com/the-5-best-credit-cards-for-college-students <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-5-best-credit-cards-for-college-students" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/student-credit-card-482237495-small.jpg" alt="student credit card" title="student credit card" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>When I was in college, my mom seemed to call me nearly every week to confirm that I was paying my entire credit card balance in full and on time. It was as if she knew that credit cards and college students do not have a good history together. At the time, banks were employing every tactic possible to get large amounts credit into the hands of young adults. So much so that many felt these banks were acting more like predatory lenders than respectable financial institutions. In response, Congress passed the CARD Act of 2009. This groundbreaking piece of legislation set limits on banks' on-campus marketing efforts and required young adults who applied for credit cards to show some means of paying off loans.</p> <p>Nevertheless, students continue to obtain and abuse credit cards. They tend to incur debt and struggle to make payments on time. While these are bad practices at any stage of life, starting these habits at a young age sets a terrible precedent for how students will continue to manage their finances after graduation. Therefore it is critical that parents work closely with students to carefully guide them into financial independence. (See also: <a href="http://www.wisebread.com/college/college-resources">40+ College Resources for Parents and Students</a>)</p> <h2>Choosing the Best Student Credit Card</h2> <p>So what should parents and students look for in a credit card? Look for simple terms, no annual fees, and if possible, maybe some <a href="http://www.wisebread.com/5-best-cash-back-credit-cards">cash back rewards</a>. You don&rsquo;t want to get in the habit of paying interest on your credit card balance, but if you have to, it shouldn&rsquo;t be well outside the market rates. Also, opening up a credit card account at the same bank that the student holds their checking account is a great idea. This way, timely payments are just a transfer between accounts rather than a transaction between separate institutions.</p> <h3>Discover it&reg; for Students</h3> <p><a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22866600&amp;fot=1032&amp;foc=1"><img width="154" height="98" style="float:right; margin:0 5px 5px 10px;" src="http://content.linkoffers.net/SharedImages/Products/211104/601561.png" alt="credit card" /></a></p> <p>Discover is known for simple terms and great customer service. The <a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22866600&amp;fot=1032&amp;foc=1">Discover it&reg; for Students</a> card offers 5% cash back bonuses for gas and ground transportation on up to $1500 in purchases from January through March 2015 after you sign up for 5% Cashback Bonus. All other purchases earn 1% cash back. Students can also earn 5-20% cash back when shopping through Discover's online shopping portal. The APR ranges from 12.99% &ndash; 21.99% variable. Free text alerts remind students when payments are due. Paying late won't raise the APR, and a free FICO score is included in each monthly statement, online, and in their mobile app so students can monitor their credit. There are also no foreign transaction fees, so this is a great card to use on any travels abroad.&nbsp;<strong>There is no annual fee.</strong></p> <p><a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22866600&amp;fot=1032&amp;foc=1"><strong>Click here to apply for the Discover it&reg; for Students.</strong></a></p> <h3>Barclaycard&reg; Ring MasterCard&reg;</h3> <p><a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=16694762&amp;fot=1032&amp;foc=1"><img width="154" height="98" style="float:right; margin:0 5px 5px 10px;" src="http://content.linkoffers.net/SharedImages/Products/209357/575670.jpg" alt="credit card" /></a></p> <p>While not a card targeted specifically for students, the <a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=16694762&amp;fot=1032&amp;foc=1">Barclaycard&reg; Ring Mastercard&reg;</a>&nbsp;is a great card for them nevertheless.&nbsp;Not only does it offer a competitive and simple 8% APR, there are no balance transfer fees, and no penalty APR hikes for late payments. This is also the first card to introduce crowdsourcing into its terms. The Ring Mastercard allows user feedback to affect the terms and conditions of the credit card. Cardmembers can discuss issues and vote on new ideas in an official community portal. It also has a Giveback feature which allows cardmembers to receive a percentage of the company's profits. <strong>There is no annual fee.</strong></p> <p><strong><a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=16694762&amp;fot=1032&amp;foc=1">Click here to apply for the Barclaycard&reg; Ring Mastercard&reg;.</a></strong></p> <h3>Discover it&reg; chrome for Students</h3> <p><a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22993903&amp;fot=1032&amp;foc=1"><img width="154" height="98" style="float:right; margin:0 5px 5px 10px;" src="http://content.linkoffers.net/SharedImages/Products/220221/601849.png" alt="credit card" /></a></p> <p>The chrome is the newest in Discover's line of credit cards. Its <a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22993903&amp;fot=1032&amp;foc=1">Discover it&reg; chrome for students</a> card offers a more straightforward 2% cash back on gas and restaurants (up to $1,000 combined purchases each quarter) and 1% cash back on all other purchases. Students can also earn 5-20% cash back through Discover's online shopping portal which features over 200 online retailers. Cashback can be redeemed for any amount at any time, and they never expire. Another great perk is getting a FICO score with each monthly statement so students can keep up to date on their credit. There is currently an intro 0% APR on purchases for 6 months, after that it will be 12.99%-21.99% variable. All Discover cards offer zero foreign transaction fees, and<strong> there is no annual fee. </strong></p> <p><strong><a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22993903&amp;fot=1032&amp;foc=1">Click here to apply for the Discover it chrome for students.</a></strong></p> <h3>Citi&reg; Dividend&reg; Card for College Students</h3> <p>The Citi&reg; Dividend&reg; Card for College Students offers 5% cash back every quarter in rotating categories, and 1% cash back on all other purchases. Students may earn a total of up to $300 per calendar year. Citi also has a shopping portal of over 400 retailers where cardholders can get 5% unlimited cash back. Citi offers a 0% promotional APR on purchases for seven months, followed by a regular APR of 13.99% - 23.99% (variable), depending on the applicant&rsquo;s credit history. <strong>There is no annual fee. </strong></p> <p><strong><em>Note: This offer is currently unavailable</em></strong></p> <h3>Citi ThankYou&reg; Preferred Card for College Students</h3> <p><a href="http://www.jdoqocy.com/click-2822544-11740867?sid=steele-911504" target="_top"><img width="154" height="98" style="float:right; margin:0 5px 5px 10px;" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u784/CitiThankYouPreferredCardforCollegeStudents.jpg" alt="credit card" /></a></p> <p>Another card for students offered by Citi, the <a href="http://www.jdoqocy.com/click-2822544-11740867?sid=steele-911504" target="_top">Citi ThankYou&reg; Preferred Card for College Students</a><img width="1" height="1" border="0" alt="" src="http://www.awltovhc.com/image-2822544-11740867" /> offers 2 points on dining and entertainment purchases, and 1 point on all other purchases. Unlike the Dividend Platinum Select Visa mentioned above, there is no limit to the number of points you can earn. They currently offer a sign up bonus of 2,500 points after spending $500 in the first three months, and 0% intro APR for 7 months on purchases. After that, the APR ranges from 13.99%-23.99% (variable), based on credit worthiness. <strong>There is no annual fee.</strong></p> <p><a href="http://www.jdoqocy.com/click-2822544-11740867?sid=steele-911504" target="_top"><strong>Click here to apply for the Citi ThankYou&reg; Preferred Card for College Students.</strong></a><img width="1" height="1" border="0" alt="" src="http://www.awltovhc.com/image-2822544-11740867" /></p> <h3>Journey<sup>SM</sup> Student Rewards from Capital One&reg;</h3> <p><a target="_blank" rel="nofollow" href="http://www.wisebread.com/capital-one-journey-student-rewards?ref=911504"><img height="98" style="float:right; margin:0 5px 5px 10px; width=" src="http://content.linkoffers.net/SharedImages/Products/162814/591711.gif" alt="credit card" /></a></p> <p>The <a target="_blank" rel="nofollow" href="http://www.wisebread.com/capital-one-journey-student-rewards?ref=911504">Journey<sup>SM</sup> Student Rewards from Capital One&reg;</a> is marketed to students and features 1% cash back on all purchases, every month, with no annual fee. In fact, Capital One offers an additional 25% cash reward each month when cardholders <a title="The College Freshman Budget" href="http://www.wisebread.com/the-college-freshman-budget">pay their bills on time</a>, for a total of 1.25% cash back. There's no limit on how much cash back students may earn, and the rewards don't expire. After making the first 5 monthly payments on time, cardholders get access to a higher credit line. There's fraud coverage if the card is lost or stolen. This card also comes with the Capital One Credit Tracker, which gives cardholders free access to their monthly credit score as well as helpful credit tips.</p> <p><a target="_blank" rel="nofollow" href="http://www.wisebread.com/capital-one-journey-student-rewards?ref=911504"><strong>Click here to apply for the Journey<sup>SM</sup> Student Rewards from Capital One&reg;</strong></a></p> <p>No matter which card they choose, students face treacherous path on their road to <a title="5 Steps Toward Financial Independence" href="http://www.wisebread.com/5-steps-toward-financial-independence">financial independence</a> and responsibility. By working together to choose the best card for their needs, parents and students can smooth out this critical path to adulthood.</p> <!--?php _wisebread_print_box(7); ?--><!--?php _wisebread_print_box(7); ?--><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/the-5-best-credit-cards-for-college-students">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/college/college-resources">40+ College Resources for Parents and Students</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-great-jobs-for-college-students">10 Great Jobs for College Students</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-college-freshman-budget">The College Freshman Budget</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/budgeting-for-study-abroad-what-youll-need-and-how-to-access-your-money">Budgeting for Study Abroad: What You&#039;ll Need, and How to Access Your Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Education & Training building credit children and money college students Tue, 07 May 2013 19:48:50 +0000 Jason Steele 911504 at http://www.wisebread.com What It Costs to Raise a Child http://www.wisebread.com/what-it-costs-to-raise-a-child <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-it-costs-to-raise-a-child" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/baby-5070175-small.jpg" alt="baby" title="baby" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Raising children can be invaluable and something a parent will cherish forever. The cost of those memories, however, is much more than time spent, diapers changed, toys picked up, and tears shed. (See also: <a href="http://www.wisebread.com/7-things-to-consider-before-becoming-a-stay-at-home-parent" target="_blank">7 Things to Consider Before Becoming a Stay-at-Home Parent</a>)</p> <p>As any parent will tell you, there are financial costs to raising children, though they probably don't closely track them. The federal government does, however.</p> <h2>Average Annual Cost Per Kid</h2> <p>The <a href="http://www.cnpp.usda.gov/Publications/CRC/crc2011.pdf" target="_blank">latest figures from the U.S. Department of Agriculture</a> [PDF] put the annual cost of raising a child from $12,290 to $14,320 in a two-child, married couple, middle-income family.</p> <p>Child-rearing costs through age 17 vary by family income level. The total costs range from $212,370 to $490,830, with the average middle-income family spending $295,560 to raise a child through age 17. These expenses don't include college.</p> <p>The USDA also offers a child cost <a href="http://www.cnpp.usda.gov/calculator.htm" target="_blank">calculator</a>, which can be a fun form of birth control for would-be parents who have a few seconds to spare online. The calculator asks for the number and age of children, how many parents live in the household, where you live, and before-tax annual household income.</p> <h2>Zip Code Influences Kid Cost...</h2> <p>Some areas of the country are more expensive to live in than others, which might be an incentive to move. Child-rearing expenses were highest in the urban Northeast, followed by the urban West and urban Midwest. They were lowest in the urban South and rural areas. The costs of housing, child care, and <a href="http://www.wisebread.com/how-to-get-into-a-good-school-district-for-less" target="_blank">education</a> had the most regional differences.</p> <h2>...and So Does Your Kid's Age</h2> <p>Expenses increased as children age, the report finds, with food, transportation, clothing, and health care expenses rising the most as a child eats more and starts driving.</p> <h2>Where Your Kid Money Goes</h2> <p>Where does the money go? About where you'd expect.</p> <ul> <li>Housing: 30%</li> <li>Child care and education: 18%</li> <li>Food: 16%</li> <li>Transportation: 14%</li> <li>Healthcare: 8%</li> <li>Clothing: 6%</li> </ul> <p>Another 8% went to miscellaneous expenditures, which can quickly drain a parent's pockets. These include:</p> <ul> <li>Personal care items and services such as haircuts and toothbrushes</li> <li>Entertainment such as portable media players, sports equipment, and computers</li> <li>Reading materials such as nonschool books and magazines</li> <li>Admission fees such as paying to go to a movie, baseball game, or amusement park</li> </ul> <p>Those costs seem to add up fast during summer when a child is bored.</p> <h2>College Is Extra</h2> <p>A <a href="http://www.wisebread.com/the-college-freshman-budget" target="_blank">big expense</a> that isn't included is the cost of sending a kid to college, although parents might be taking on that expense if they're saving for a child's college education before the child turns 18.</p> <p>The USDA report cites <a href="http://trends.collegeboard.org/college-pricing" target="_blank">statistics from the College Board</a> that in 2012 the annual average tuition and fees at a four-year public college with in-state tuition was $8,244, and was $28,500 at a four-year private college. Annual room and board was $8,887 at a public college and $10,089 at a private college. That adds up to about $33,000 to attend a public college for four years, or $114,000 for four years at a private college.</p> <p>Maybe those priceless pieces of school-made art from kindergarten can be sold at auction.</p> <h2>Kids Cost Opportunity, Too</h2> <p>Along with the cost of raising children, the USDA had other bad news for parents &mdash; they're likely to earn less money as <a href="http://www.wisebread.com/retirement-for-stay-at-home-parents" target="_blank">they spend their time with their children</a> instead of in the workforce. Current earnings and future career opportunities may be diminished because of job choice or reduced time in the labor force for one or both parents. If a parent has to stay home and take care of children, that parent won't earn as much money as they would otherwise.</p> <p>But at least the report gets to the point of child-rearing that only parents can understand and appreciate &mdash; the rewards are priceless, no matter what the cost.</p> <p>Or, as the USDA bluntly puts it, &quot;The direct and indirect costs of raising children are considerable, absorbing a major share of the household budget. On the other hand, these costs may be outweighed by the benefits of children.&quot;</p> <p><em>Where do your child-rearing dollars seem to go? Are you getting your money's worth?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/what-it-costs-to-raise-a-child">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/24-tips-for-having-a-baby-without-going-broke">24 Tips for Having a Baby Without Going Broke</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/in-two-income-households-can-making-more-put-us-further-behind">In Two-Income Households, Can Making More Put Us Further Behind?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/escape-the-economic-inout-patient-care-cycle">Escape the Economic In/Out Patient Care Cycle</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-you-should-give-kids-cash-for-the-holidays">5 Reasons Why You Should Give Kids Cash for the Holidays</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-if-your-adult-child-is-moving-home">What to Do If Your Adult Child Is Moving Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Family child costs children and money family budget pregnancy Tue, 07 May 2013 10:00:31 +0000 Aaron Crowe 973864 at http://www.wisebread.com Money-Making Lessons From the Girl Scouts http://www.wisebread.com/money-making-lessons-from-the-girl-scouts <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/money-making-lessons-from-the-girl-scouts" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/gs.jpg" alt="Girl Scouts pose with cases of cookies." title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>My living room has been stacked high with cases of Girl Scout cookies for the past month, I've created a spreadsheet that looks like the blueprint to a Dr. Seuss house, and my day is frequently interrupted by phone negotiations over trading a &quot;Dulce&quot; for a &quot;Savannah.&quot;</p> <p>Yep, I'm a cookie mom.</p> <p>Despite my moments of doubt &mdash; &quot;Are all these hours really worth the amount of money this fundraiser puts in our troop bank account?&quot; &mdash; I've come to love most aspects of cookie season. I've even learned a thing or two about money and sales from the well oiled machine known as the Girl Scout Cookie Program. (See also: <a href="http://www.wisebread.com/timeless-money-lessons-from-teens">Timeless Money&nbsp;Lessons From&nbsp;Teens</a>)</p> <h2>1. You Can't Get a &quot;Yes&quot; If You Don't Ask</h2> <p>During cookie manager training, I learned that <a href="http://www.gscsnj.org/Forms%20&amp;%20Documents/Cookie/Troops/Cookie%20Program%20Troop%20Guide.pdf">85% of people who are asked to buy Girl Scout cookies say yes</a> (PDF). However, only 35% of people are asked. If a sales team with millions of unpaid child workers has that large of an untapped market, think how much untapped potential your own business or endeavor might have!</p> <h2>2. It Pays to Set Goals</h2> <p>One great thing about the Girl Scout Cookie Program is that Girl Scouts are supposed to <a target="_blank" href="http://www.girlscouts.org/program/gs_cookies/the_five_skills.asp">set their own goals</a> for what activities they want their earnings to fund and figure out how many cookies they need to sell to meet those goals. The process is encouraging me to <a href="http://www.wisebread.com/goal-setting-defined-and-deconstructed">do more purposeful goal setting</a> for my own money earning activities.</p> <h2>3. Lead With What You Have</h2> <p>This is actually a piece of advice our troop got from a kind shopper as we stood outside a local grocery store. Our Scouts were keeping a close tally on what varieties we had run out of, and when shoppers asked what we had, they'd recite, &quot;We're out of Trefoils, we're out of Do-Si-Dos ...&quot; before finally getting to the many varieties of cookies we still had for sale.</p> <p>&quot;Hey, girls,&quot; our shopper said, getting out his wallet. &quot;Lead with what you have, not what you don't have.&quot;</p> <h2>4. Be Persistent</h2> <p>The Girl Scouts have come up with a great way to counter excuses like, &quot;I don't eat sweets&quot; or &quot;I already bought cookies.&quot; It's called a <a target="_blank" href="http://girlscoutsla.org/pages/product_sales/goc1.html">Gift of Caring</a>, and it means that you can pay for a box of cookies to be donated to a food pantry or military unit &mdash; with a percentage going to the troop just like with a regular sale. It takes some moxie for little girls to hear &quot;no&quot; and come back with, &quot;You could give a Gift of Caring instead!&quot; but I have seen it pay off again and again.</p> <h2>5. Don't Save All Your Accounting for the Last Minute</h2> <p>The Girl Scouts wisely break up their cookie season into bite-sized chunks, asking troops to make deposits throughout the season so that they don't find themselves at the end of the sales period owing thousands that they haven't collected. This would be such a good idea in all our financial planning &mdash; if you need to make a $10,000 tuition payment in September, schedule yourself four quarterly bank deposits of $2,500 each to make sure it's all in order when the time comes.</p> <h2>6. Don't Bite the Hand That Feeds You</h2> <p>Girls Scouts are always supposed to leave a place nicer and cleaner than we find it, but at cookie manager training we were warned to be especially vigilant about this when it comes to selling cookies in public locations. When selling in front of stores, we are admonished not to leave our empty cases lying around or even taking up space in the host business's recycling bin. Most important, if Starbucks is nice enough to let us sell cookies by their front door, we don't stand around drinking coffee or hot cocoa from other shops.</p> <h2>7. Make Every Member of Your Organization Accountable</h2> <p>In our area, every parent in the troop signs a responsibility form acknowledging that they owe every penny of cash for the cookies their daughter takes to sell. Parents who volunteer must be fingerprinted and get a background check from the local police. Every time cookies or money change hands from troop to members and back again, a receipt is issued.</p> <p>This all may seem like overkill until you realize that our little troop is currently in possession of $6,000 in cookies and cash. Scout's honor is great, but when we are talking about thousands of dollars, receipts and fingerprints are great backup.</p> <h2>8. Delegate, Delegate, Delegate</h2> <p>When I first got involved in the cookie sale, I was shocked at how much work is involved for parents, especially when the girls are young. But it all gets done despite the volunteers' jobs, parenting responsibilities, and everything else they have to do. It gets done most easily in troops &mdash; like ours, luckily &mdash; where all the families share the work. If I ever <a href="http://www.wisebread.com/6-reasons-youre-not-as-happy-as-youd-like-to-be">find myself getting overwhelmed</a>, it's usually because I have not taken time to ask the other parents if they could take over one of the tasks I'm juggling.</p> <h2>9. Remember the Big Picture</h2> <p>When I get home from spending three hours outdoors with a group of increasingly rambunctious third grade girls and count up how many cookies we sold, I'm tempted to calculate our troop's earnings on a per-hour, per-adult basis. This often amounts to less than minimum wage, which discourages me.</p> <p>However, other Girl Scout parents remind me that there is more to the sale than our troop earnings. There is all the <a target="_blank" href="http://www.girlscouts.org/program/gs_cookies/the_five_skills.asp">great experience our girls are getting</a> with earning the money to fund their own activities. Then there is the fact that money from every box sold goes back to our local council to fund activities for all girls in our region. When I got my summer Girl Scout camp catalog, it laid out the difference between what parents are required to pay and the true cost of providing the camp sessions. Girl Scout Cookie sales <a target="_blank" href="http://www.girlscouts.org/program/gs_cookies/faq.asp">subsidize camps and other great activities</a> that many girls could not afford otherwise.</p> <h2>10. Don't Over-Estimate Sales</h2> <p>If you order more cookies than your troop can sell, you'll be scrambling to avoid literally &quot;eating&quot; the loss. This is a lesson that even a regional Girl Scout council found out when some cookies they returned to the baker &mdash; as allowed in their contract &mdash; turned into a black mark on the Scouts' public image. The baker had <a target="_blank" href="http://www.cbsnews.com/8301-201_162-57569638/destruction-of-unsold-girl-scout-cookies-sparks-debate-in-california/">unexpired cookies destroyed instead of donated</a>, and the news media had a field day.</p> <h2>11. You Must Understand Opportunity Cost</h2> <p>Once a troop has picked up its initial cookie order, the volunteers involved have the option to order and pick up more cases. Whether to do so requires some guesswork and calculation &mdash; are the potential additional earnings <a href="http://www.wisebread.com/what-you-pay-in-time">worth the adult's time</a> and gas to fetch more cookies, and the girls' time to sell them?</p> <p>&quot;I thought about ordering two additional cases for a booth sale because I'm pretty sure we'd sell them,&quot; said Marta Segal Block, a troop cookie manager in Oak Park, Ill., who blogs at <a target="_blank" href="http://advicefrommarta.com/">Advice from Marta</a>. &quot;But really, even if we did that's only $17 or so, so it isn't worth the trouble to order the cases just for that. But, if we had a third booth sale and ordered another 10 cases, then it would seem worth it.&quot;</p> <p><em>Have you ever taken part in a GSA cookie sale or similar fund raising effort? Did you learn any money and sales lessons?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/money-making-lessons-from-the-girl-scouts">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">12 Ways Kids Can Teach Us About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-financially-educate-your-children">How to Financially Educate Your Children</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/marketing-messes-with-your-head">Marketing Messes With Your Head</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance children and money girl scout cookies marketing sales Tue, 05 Mar 2013 10:30:10 +0000 Carrie Kirby 968126 at http://www.wisebread.com Opening a Roth IRA for Your Kid http://www.wisebread.com/opening-a-roth-ira-for-your-kid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/opening-a-roth-ira-for-your-kid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/566087174_4b0055634f_z.jpg" alt="smiling mother daughter" title="smiling mother daughter" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>My parents have done a lot for me. But one of the things I am the most grateful for is that they opened up a Roth IRA for me when I was in high school, the first year that the account was available.</p> <p>Like many people, I didn't think much about long-term savings when I was younger. Most of my goals were relatively immediate, saving for things like a video camera, travel, or the security deposit for my first apartment. And I remained similarly short-sighted at my first couple of jobs post-college. Convinced I wouldn't be at my first job long enough for them to start matching my contributions, I&nbsp;passed on contributing to my 401(k). I felt extra sour about that particular company's retirement plan when I discovered that my holiday bonus &mdash; a deposit into my 401(k) &mdash; disappeared when&nbsp;I quit because I hadn't vested. So what did I do? I said &quot;screw it&quot; to retirement savings, and ignored the 403(b) at my next job, too.</p> <p>Flash forward to now &mdash; after several years of freelancing and learning about finances, I wish that I had the foresight to set up a 401(k) when I could have. But that also makes me extra thankful for the retirement account I do have, and have had since my teens &mdash; my Roth IRA. (See also: <a href="http://www.wisebread.com/why-roth-iras-are-ideal-for-young-professionals">Why&nbsp;Roth&nbsp;IRAs Are Ideal for Young Professionals</a>)</p> <h2>Some Roth IRA Benefits</h2> <p>Anyone who has earned income can set up a Roth IRA, and the accounts are generally very easy to open.</p> <p>Roth IRA account holders can withdraw any funds they contributed to their account, tax-free, at any time. While I don't think it's good practice to encourage people to tap into their retirement savings early, this can be helpful. For example, I once removed a couple thousand dollars from my Roth IRA so that I could buy an inexpensive used car without resorting to a loan.</p> <p>Even some Roth IRA earnings can be withdrawn before retirement time under certain circumstances, such as when you're <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">buying your first home</a>.</p> <h2>Setting Up Roth IRAs for Kids</h2> <p>As I mentioned above, who has earned income can set up a Roth IRA. You can't pay your kid to do work, but if he has a summer or part-time job, he's eligible. Even cash jobs like babysitting can count. According to Janet Bodnar at <a href="http://www.kiplinger.com/columns/drt/archive/2008/dt080130.html">Kiplinger's</a>, if your child mows lawns for the summer, you just need to &quot;keep careful records of each job...And it would make a stronger case if he mowed lawns not just for you but for other customers as well.&quot;</p> <p>If your child has spent part (or, well, all) of her money, you can also kick in cash on her behalf &mdash; but the maximum contribution is $5,000 or the total of your child's earned income, whichever is smaller.</p> <p>Bodnar also notes in her piece that some companies will not open accounts for children under 18. Others, do, however; just know you might have to search around a little bit to find one.</p> <p>Did you set up a Roth&nbsp;IRA for your child? If so, what was your experience?</p> <p><em>The post is part of the </em><a href="http://www.goodfinancialcents.com/roth-ira-account-movement/"><em>Roth IRA Movement</em></a><em>.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/meg-favreau">Meg Favreau</a> of <a href="http://www.wisebread.com/opening-a-roth-ira-for-your-kid">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-set-up-an-ira-to-build-wealth">How to Set Up an IRA to Build Wealth</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-you-must-open-a-roth-ira-before-april-15">4 Reasons Why You Must Open a Roth IRA Before April 15</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tax-penalties-for-early-retirement-withdrawals">Tax Penalties for Early Retirement Withdrawals</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement children and money early retirement withdrawal investing for kids Roth IRA Tue, 27 Mar 2012 10:00:32 +0000 Meg Favreau 913196 at http://www.wisebread.com 5 Reasons Why You Should Give Kids Cash for the Holidays http://www.wisebread.com/5-reasons-why-you-should-give-kids-cash-for-the-holidays <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-why-you-should-give-kids-cash-for-the-holidays" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/kids money.jpg" alt="kids with cash" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Do you remember what it was like to be a kid? Do you remember how hard it was to get your hands on cash? I know I'm dating myself here, but when I was young, a dollar was, well,&nbsp;<em>paper</em> money. I could get a lot of candy for that dollar. A lot. So why have I been so hesitant to give kids cash for gifts? Will I be getting them practical things next, like socks and sweaters and underpants? No way. I'm refusing to become <em>that</em> grown up. Here's why I'm sending cash for Christmas, and you should too.</p> <h3>All Kids Love Cash</h3> <p>I don't care how old or young they are, every kid loves the cold hard green stuff. Why? Because the Federal Reserve puts a chemical in every dollar bill that makes you instantly lose your mind and try to bargain your Pampers for an extra buck. I'm kidding. Kind of. I recently went to a young child's birthday party where she received a five dollar bill. No lie. Five bucks. But you would have thought that card held the Golden Ticket to Willie Wonka's Chocolate Factory by the way she swung around the room singing. I, on the other hand, cursed myself under my breath, thinking about the $30 I wasted on books and craft supplies, which, big surprise, she did not like. Lesson learned. Which leads me to reason number two...</p> <h3>You Spend a LOT Less</h3> <p>If you're sending the gift in the mail, shipping, even for a lightweight gift, will cost you, sometimes more than you wanted to spend on the gift in the first place (you cheapo). Get them an educational game that runs just under $20, add at least $7 in shipping, not to mention the $3-$4 in wrapping, and your thoughtfulness just cost you nearly $30. Or you can get a $.99 card, throw in a twenty and send it with a $.49 cent stamp. You just shaved nearly ten dollars off your cost and became the most popular distant relative to your niece. Being popular just means throwing money at people. Look at politicians.</p> <h3>No Returns or Refunds</h3> <p>It's money. No one will ever complain about getting money. They can't return it or wish it was something else, because it can become what they want it to be. You won't have to spend hours in a mall or researching the hottest toys online just to find out she has that toy or hates that color. Whether the kid will save up the cash to get something she really wants or blow it all on candy and stick-on tattoos, money always fits, and it can be used for a great life lesson.</p> <h3>You're Teaching Them Fiscal Responsibility</h3> <p>If you want to be more hands-on and responsible, which is noble, send them an essay on the difference between Keynesian Economics and Austrian Economics, tell them to write a book report on it, and promise to send them the $20 after you receive the report. Or you can just wrap the money with the financial section of your newspaper with a sticky note that says, &ldquo;You better hang on to this.&rdquo; Nothing like a little doom and gloom to wake those tweens out of their Justin Bieber haze.</p> <h3>You'll Bond with Them</h3> <p>Once they get the money, have an open dialogue with them. You can get to know them and their interests by what they spent the cash on. Ask nonchalantly, &ldquo;So what did you end up getting yourself for Christmas?&rdquo; When they start talking about how FurReal Friends are way better than Zhu Zhu Pets, just smile and nod. Smile and nod.</p> <p>Of course you'll want to check in with mom and dad before you go sending off money in case they have a particular rule about kids and cash. Be polite and ask what their preferences are. In some cases, you can offer a gift card instead. Just remember, I've never seen a kid do a happy dance around the living room for a gift card. Must be that chemical the Fed uses.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sonja-stewart">Sonja Stewart</a> of <a href="http://www.wisebread.com/5-reasons-why-you-should-give-kids-cash-for-the-holidays">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-give-thoughtful-gifts-on-a-scrooge-like-budget">How to Give Thoughtful Gifts on a Scrooge-Like Budget</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-places-to-get-cheaper-diapers">5 Places to Get Cheaper Diapers</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-saving-tricks-to-know-before-buying-an-engagement-ring">12 Money-Saving Tricks to Know Before Buying an Engagement Ring</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-parents-save-money-at-costco">How Parents Save Money at Costco</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-gifts-for-the-guy-who-has-everything">20 Gifts for the Guy Who Has Everything</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Family Shopping children and money holiday gifts Mon, 25 Oct 2010 12:00:21 +0000 Sonja Stewart 268164 at http://www.wisebread.com How to Financially Educate Your Children http://www.wisebread.com/how-to-financially-educate-your-children <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-financially-educate-your-children" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4832837733_42a203ddfb_z.jpg" alt="kids and money" title="kids and money" class="imagecache imagecache-250w" width="250" height="155" /></a> </div> </div> </div> <p>You have the power to create and mold your child&rsquo;s financial imprint. It is through your own actions, discussions, and attitudes towards money that your children will develop habits &mdash; both good and bad &mdash; that will carry them through and last a lifetime. They won&rsquo;t learn it from anybody else; finances are not taught (at least not thoroughly enough if at all) in schools, and nobody else is going to show them how to succeed in life and avoid the huge <a href="http://www.wisebread.com/10-financial-frights-to-avoid" title="10 Financial Frights to Avoid">financial pitfalls</a> that lurk around every corner.</p> <p>So do your child a favor and give them a huge helping hand! Here are a few ways you can help them create a healthy relationship with money:</p> <h3>1. Don&rsquo;t Bribe Them With Money</h3> <p>By offering money as a reward for good behavior, your kids will learn that money is an end, instead of a <em>means to an end</em>. <strong>Try rewarding them with tangible life-enhancing experiences</strong> which the money would buy, like taking them to the movies, or out for a family lunch. Better yet, you can reward good behavior with things that don&rsquo;t require money like having a sleepover with friends.</p> <h3>2. Go With the Flow</h3> <p>If your child wants to count the coins in your purse, let them. Use the opportunity to <strong>help them understand what each coin is worth</strong> and their relative value. You may even help them identify what each coin can buy (if anything). If they receive birthday money, then talk about the benefits of opening a <strong>bank account</strong>. As money works its way into your child&rsquo;s life (and it will), use the opportunity to talk to them about it.</p> <h3>3. Allowances: Stick to the Plan</h3> <p>If you give your child an allowance, <strong>be exact and consistent with the amount and timing of each payment</strong>. This will get them used to timing and managing their income stream, as they will need to do when they later have jobs and careers.</p> <h3>4. Allowances and Pocket Money: Pay Yourself First</h3> <p>The best way to get your kids into the habit of paying themselves first is by doing it right from the beginning. Discuss long-term and short-term savings, and <strong>encourage them to put at least 10% of their allowance either in a bank account or even a piggy bank</strong>. The piggy bank option will require additional discipline (on their part) not to delve into it for candy, and could go two ways. On one hand, irresponsibly accessing their long term savings (maybe they are saving up for a video game) may affect their ability to reach their goals; a great lesson to learn &mdash; the hard way &mdash; early on in life. Then again, using a bank account instead may take just enough of the <a href="http://www.wisebread.com/impulse-shopping-a-controllable-handicap" title="Impulse Shopping: A Controllable Handicap">impulse urges</a> out of their hands to help them achieve their goals and feel the satisfaction of getting that video game after saving up for it.</p> <h3>5. Put a Positive Spin on It</h3> <p>Even if you don&rsquo;t have a positive attitude towards your own money matters, don&rsquo;t allow your children to inherit this unhealthy disposition. <strong>Don&rsquo;t let them associate money with anxiety or stress</strong>. Instead, teach them practically how money can help achieve their goals and get the most out of life through avenues like creating financial independence, creating a better world with charitable contributions, and even giving it to loved ones. Again try to stay away from the idea that money is an end or is happiness in and of itself; instead show how <em>money can be a conduit to positive things</em>.</p> <h3>6. Talk About It, Lots!</h3> <p><strong>Money is not a taboo subject</strong>, even though we may have been raised to believe it is. If you aren&rsquo;t comfortable telling them how much money you personally have in the bank (either because you believe you are not a shining example or because you simply don&rsquo;t want to), then that&rsquo;s okay. But when your child asks why you can&rsquo;t go to Disney World, this is an opportunity to discuss the household&rsquo;s budget, the cost of living, vacations, and entertainment. <strong>Involve them in the family finances</strong>, and they will learn to take ownership naturally &mdash; a skill that will take them through life.</p> <h2>Money Milestones</h2> <p>Involving your kids in the family budget when they are only three years old may be a bit of a stretch. Instead, consider these money milestones as a way of incorporating finance education seamlessly into their lives.</p> <h3>Coins</h3> <p>When your kids start to become curious about pretty coins and money in general, educate them as to the value of coins and what they can buy. <strong>It also makes a great lesson in math</strong>: start with pennies as building blocks, then introduce higher value coins as their numerical repertoire increases.</p> <h3>Bank Account</h3> <p>As soon as pocket money and birthday gifts start adding up, take them into the bank to open an account. There are lots of child-friendly accounts out there, so make sure you <strong>actively involve them in the process</strong>. They will derive great pride from having their own account. This is when you start to discuss the concept of <em>earning interest on savings</em>.</p> <h3>Budgeting</h3> <p>Now that they have a bank account and the ability to save up for things, it is time to start budgeting. If they receive an allowance, hopefully they are already paying themselves first and putting away at least 10%, as with money received as gifts.</p> <p>They are also probably talking about toys they want (like video games). So help them budget for it! <strong>With pen and paper in hand, help them construct a budget by determining how much their toy costs, figuring out how much they currently have, and calculating how long it will take them to save up for it.</strong> Seeing the plan on paper may encourage them to save more than just 10% towards their goals, depending on how motivated they are. Again, this is a great exercise in applicable math.</p> <h3>Extra Income</h3> <p>Let&rsquo;s say your child is now motivated by their budgeting goals, and eager to reach them sooner. You could consider paying them extra pocket money for additional chores performed (they call this &ldquo;overtime&rdquo; in the working world, and it is <a href="http://www.wisebread.com/outsourcing-your-life-and-creating-new-businesses" title="Outsourcing Your Life">outsourcing</a> for you!), or help them if they want to earn money entrepreneurially. <strong>Teach them good business principles if they come to you wanting to open a lemonade stand</strong>, and help them to launch their enterprise successfully, starting with a <a href="http://www.wisebread.com/6-small-business-pitfalls-and-how-to-avoid-them-part-two" title="6 Small Business Pitfalls">solid business plan</a>.</p> <h3>Investing</h3> <p>As your child continues to understand and appreciate the delayed gratification of saving and budgeting, and has a good handle on the interest their bank account earns, they may be ready for something more. Talking about various investments is the next step. A small lesson in big business and stock investments could turn into a game, as they <strong>follow the share price of companies they are familiar with, like Coca-Cola, or Disney</strong>.</p> <p>Although having them invest their hard-earned pennies in the stock market is not recommended just yet, you could set up a mock investment account, and get them to follow the value of their money along with the stock (again, a great lesson in applicable math). Even if they forget about it for a while, a reminder a year or so down the road that they had &ldquo;money&rdquo; invested and what it is now worth may lead to a pleasant surprise about market growth; or conversely a rude awakening about market downturns.</p> <h3>Family Finance</h3> <p>As your child gets a good grasp on the above financial matters (they will likely be in their teenage years by now), it is time to <strong>involve them actively in the family budgeting and finances</strong>. Help them to understand what their own <a href="http://www.wisebread.com/vision-boards-dream-big-play-with-pictures-and-watch-your-life-change" title="Vision Boards: Dream Big">short term and long term goals</a> are, such as the cost of higher education (even if you plan to pay for it), and eventually getting a car (or conversely what their <a href="http://www.wisebread.com/10-easy-ways-to-be-nicer-to-the-environment-and-your-wallet" title="10 Ways to Be Nicer to the Environment">alternative transportation options and costs</a> would be), housing, and the cost of getting set up comfortably to live on their own (and hopefully, before the age of 35)!</p> <p><strong>When it comes to family vacations, involve them actively in the process</strong>, by working out with them the cost of various vacation options and funds available, and then decide together what the family would most enjoy doing. Budget together for excursions and <a href="http://www.wisebread.com/the-easiest-way-to-save-money-on-vacation" title="The Easiest Way to Save Money on Vacation">souvenirs</a>, and your kids will take ownership of the trip and learn to appreciate the experience so much more. Not only that, but they will be much less likely to try to guilt you into unreasonable expenditures since they already know what the budget is; they may even help other family members to stay on track!</p> <p>You may not see yourself as the world&rsquo;s best financial example. But this is no reason to sit back on your haunches and do nothing; in fact this will only increase the chances exponentially that your kids will follow suit! Instead, be prepared to come clean with your own mistakes, and celebrate your victories, in order to help your kids learn from you and start their own financial lives on the right foot.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/how-to-financially-educate-your-children">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">12 Ways Kids Can Teach Us About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-did-your-parents-really-teach-you-about-money-it-might-surprise-you">What Did Your Parents REALLY Teach You About Money? (It Might Surprise You)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Life Hacks children and finance children and money finance education finance schooling financial education financial schooling Thu, 09 Oct 2008 01:42:49 +0000 Nora Dunn 2505 at http://www.wisebread.com 6 Random Things I Have Taught My Kids About Money http://www.wisebread.com/6-random-things-i-have-taught-my-kids-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-random-things-i-have-taught-my-kids-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/boys at cape canaveral.jpg" alt="boys at Cape Canaveral" title="boys at Cape Canaveral" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>I&rsquo;d like to say that I have taught my kids everything they need to know about personal finance, from the basics of banking to the complexities of investing and portfolio management. I haven&rsquo;t. When I was ready to inform and guide, they had no interest in learning. The financial education of my children has not been progressive or linear, but rather haphazard and unorganized. Imparting wisdom, then, has been the result of random events and conversations. So, with the understanding that life keeps happening whether you are ready or not, here are 6 things I have managed to teach my children about money.</p> <p><strong>1) Beware of fees for add-on services.</strong></p> <p>Both of my sons, newly equipped with cell phones, accessed the Mobile Web during out-of-town trips. When my oldest son went away to football camp, he got bored during his downtime and checked ESPN box scores. My youngest decided to check on updates for his favorite computer game during a family vacation. Neither realized that this&nbsp;service was not&nbsp;included in our flat monthly fee.</p> <p>Now they know that easily accessible services are not always (hardly ever?) free.&nbsp;</p> <p><strong>2) Watch your expenses if you want to have a profitable business,&nbsp;but don&rsquo;t be so cheap that you won&rsquo;t have satisfied customers.</strong></p> <p>When my youngest decided he wanted to sell Yu-Gi-Oh! cards on eBay, we worked together to set up an account linked to my credit card and checking account, both of our emails, etc. Though he seemed to understand the revenue&nbsp;side of business,&nbsp;he had to learn about expenses. He carefully considered the cost of posting multiple photos, postage, and mailers. Would an extra photo help sell the cards or just increase the eBay fee? How much is&nbsp;postage? And should he use a rigid mailer, as I suggested, or a flexible bubble envelope, as he preferred, to get the best&nbsp;buyer feedback? (He shipped the cards using the bubble envelope and earned a&nbsp;&ldquo;well-packaged&rdquo; comment from his first buyer.)</p> <p>Not only did my son figure the basics of controlling expenses, he also learned how to weigh business costs vs. benefits to the customer, made easier thanks to the feedback mechanism.&nbsp;&nbsp;</p> <p><strong>3) Be certain of a purchase before you make a commitment.</strong></p> <p>For the fourth year in a row, my son decided to attend a month-long summer enrichment program. Before I sent in the $350 fee, I confirmed his interest but never mentioned the amount.</p> <p>Having spent the week just prior to start of the program at&nbsp;Boy Scout camp, walking several miles each day, he was&nbsp;tired, rather than energized, for the first day of&nbsp;activities. Adding to his troubles were 1) a new program site&nbsp;(he preferred the inner-city school of prior years); 2) more watchfulness and protection on the teachers&rsquo; part, limiting his perceived freedom; and 3) no long-time friends in any of his classes.</p> <p>He wanted to quit after the first day&nbsp;but I felt troubled having paid the non-refundable program fees and more importantly, not having taught him the value of $350. We had a series of discussions in which I managed to explain to him that while I didn&rsquo;t mind paying for the program, it bothered me tremendously to waste money. Also, I made clear that I had to forgo other opportunities to allow him to participate.&nbsp;Our first solution was for him to repay me (he had a couple of hundred dollars in unspent birthday cash that made a dent in his debt); though he said&nbsp;he didn't miss the money,&nbsp;he decided within a couple of days to go back (thus reclaiming his cash) and found the experience enjoyable.</p> <p>We both learned to consider the cost of programs and other opportunities&nbsp;before making a big commitment.</p> <p><strong>4) Bring cash but don&rsquo;t spend everything you have.</strong></p> <p>For many years, my oldest,&nbsp;a saver by nature,&nbsp;seemed to think that he should either spend all the cash I gave him for outings or keep all the change. I would give him money for a movie with a friend, for example, but he would ask his friend&rsquo;s mom to pay his way and then try to keep my cash. After I clarified that he was to use our family's money, he then proceeded to spend as much as possible. I&nbsp;was surprised when my youngest, the spender,&nbsp;gave me&nbsp;change&nbsp;when he returned from scout camp; during the&nbsp;entire&nbsp;week, he bought just&nbsp;one root beer and a&nbsp;merit-badge handbook.&nbsp;About that time, my oldest also returned currency and coin from a parent-funded activity.</p> <p>I am not sure how it happened but&nbsp;they managed to learn financial restraint.</p> <p><strong>5) Just because you can afford any one thing you want doesn&rsquo;t mean you can afford everything you want.</strong></p> <p>In the past year or so, my teenage son&rsquo;s appetite has gone from average to outrageous. During this time, he discovered Jersey Mike's and&nbsp;developed a preference for giant-sized sandwiches (currently Chipotle Cheese Steak) to the extent that he began to think that having a giant every day was a normal request.&nbsp;During the summer break, when I had trouble keeping his hunger abated, he kept asking for Jersey Mike's. When I&nbsp;expressed my frustration and told him that we couldn&rsquo;t afford to eat out <em>every day</em>, he asked if we were poor.</p> <p>I did convince him that limiting your appetite&nbsp;doesn&rsquo;t mean you are poor but&nbsp;thrifty and wise.</p> <p><strong>6) Having money&nbsp;can save you money.</strong></p> <p>Now that I&rsquo;ve realized that I should involve my sons in day-to-day financial decision-making, I took my youngest&nbsp;with me to get his band instrument for the upcoming school year. The local music stores have&nbsp;rental programs, making it easier to afford an instrument, but the one we visited had a combination of offers. We&nbsp;could 1) rent the instrument for a monthly fee, 2) rent the instrument and have the monthly amount go toward the purchase price so that at the end of a few years, we&rsquo;d own the instrument or 3) buy the instrument at nearly a 50% discount and, if my son changed his mind about band, return the instrument&nbsp;for the purchase price less the monthly rental fee.&nbsp;After some consideration, we opted for the purchase with buy-back guarantee (the rental interest rate seemed about 25%).</p> <p>He found, as Philip as mentioned in &quot;<a title="http://www.wisebread.com/on-the-importance-of-having-capital" href="/on-the-importance-of-having-capital">On the Importance of Having Capital</a>&quot; that having enough to pay now can save money; or if he&nbsp;missed the nuance of the salesperson's presentation, he certainly learned that band instruments are expensive.</p> <p>Do I hope to&nbsp;be more intentional&nbsp;in my financial education of my children in the&nbsp;future?&nbsp;Yes. But I'll take&nbsp;what I can give (in terms of&nbsp;personal finance) as it comes along.&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/6-random-things-i-have-taught-my-kids-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">12 Ways Kids Can Teach Us About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-money-tools-and-toys-for-every-age-group">The Best Money Tools and Toys for Every Age Group</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-financially-educate-your-children">How to Financially Educate Your Children</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance children and money kids and money Sun, 31 Aug 2008 22:29:57 +0000 Julie Rains 2382 at http://www.wisebread.com