We parents don’t know it all about money…and its okay!
July 19, 2010
The final mistake that I feel parents are making is not getting educated themselves. A recent Jumpstart Coalition survey showed that “relatively few teachers felt they were adequately prepared to teach personal finance topics.” Parents and teachers, struggle with feeling educated themselves when it comes to financial literacy. It’s no wonder these topics aren’t discussed at home (number one mistake). Some parents are ashamed or embarrassed to admit they don’t know how to balance a checkbook or truly understand how credit cards work. Understand that it’s okay not to know everything, but it’s important to seek help. Reach out and get the education that will benefit both you and your kids. Empowerment and independence is a gift for every family member. Besides, its good for your kids to see that we as parents don’t know everything.
Top 5 mistakes parents are making with teens and money: Mistake number one
May 19, 2010
Money is a topic that makes most people cringe. Especially in the present economic climate, it’s generally not a fun conversation to have. I’d like to change that. Some tell me that my mission of teaching financial literacy to teens is similar to turning the Titanic…it’s going to take a long, long time and require a lot of effort.
Fine, we better get moving now then!
Although I prefer to discuss what we as parents are doing correctly, I’ve been asked several times from various people, to talk about what we are doing wrong. Let me start by saying, don’t beat yourself up if you find some of the following issues ring true for you. We are all doing the best we can, so take the information, make the changes that apply and move forward.
Number one mistake: parents aren’t talking! We talk about school, friends, drugs, smoking, sports and more, but never about money. Without question, everything I mentioned above is critical, it’s just not enough. Start the conversation about money over dinner, while driving or when shopping at the grocery store. It doesn’t need to be some heavy, boring talk, which would tune your kids out anyways. The intention is to bring an awareness of spending habits, saving habits, credit card pitfalls, and more, to your child’s radar.
Keep it simple, keep it short. Talk often, listen more.
Stay tuned for next week when I discuss mistake number two!
Forbes article on kids and money
April 21, 2010
Here’s a great article that Forbes put out recently on kids and money. I thought you would enjoy it. Check it out here:
4 Top tips for raising money savvy teens
February 22, 2010
When it comes to teaching our teens how to manage money, the hardest part can be knowing where to start. There are so many pieces to this necessary puzzle, but the time to start is now. Here are the top four factors that every teen must understand to insure financial independence and peace.
Number one: Learn to live beneath your means. Simply stated get a grip on your spending habits and spend less than you earn. Preferably, much less. Seems simple enough and it certainly isn’t rocket science, but this one little tip is what many people struggle with. Use a spending tracker for a few weeks to get a feel of how and where your money is spent. You may be surprised. Spending less than what we earn can sometimes be tough, especially with the peer pressure many teens face. Bottom line, it becomes a choice. A choice of priorities. If I was paid $1.00 for every time I heard, “I just don’t know where my money goes,” I’d be sitting in my beach chair enjoying the Hawaiian Islands.
Number two: Show them the power of saving early. Our teens are blessed with the gift of time, so show them how quickly $40 a month can add up to thousands with the magic of compounding interest. Whenever I show a group of teens the power of time and investing, I get a combination of jaws dropping and eyes widening. I think I have more fun than they do. Check out www.moneychimp.com for easy and fun calculators.
Number three: Understanding credit cards is non-negotiable. We must educate our teens on the pitfalls, as well as the advantages, of credit card usage. Without a complete understanding of how finance charges will sneak up on them, they are bound to get into trouble. Bottom line: if they can’t pay for the item in full when the bill arrives, they shouldn’t be buying it, (excluding emergencies, of course.) This ties in with item number one above; don’t spend what you don’t have.
Number four: Last, but certainly not least, introduce them to the importance of their credit score. A good credit score can mean the difference between being approved for an auto loan, getting a job (many employers will pull credit before hiring) or being able to qualify for a home someday. Without a doubt, interest rates they pay will be higher with poor scores, which equates to money flying out the window.
There are certainly more topics to cover when it comes to money education, but these four are the top on my list. Be sure to talk with your teens and seek help yourself, if needed. As always, I’m here if you need me.
The Power of NO!
February 4, 2010
Normally I prefer the word yes, but sometimes a ‘no’ is necessary!
Parents are not ATM machines!
October 16, 2009
Kids are going to hate me for this article. But, they will love me later in life. As a parent and money coach, I’m used to it.
One of the most common struggles I hear from parents is their teens constantly look to them for money. I’m not talking about the “I need new shoes” money. I’m talking about the “I want to go to the mall with my friends” money. Wouldn’t we all love somebody we could turn to for extra cash when we want to spend a few hours at the local mall? (My hand is raised)
Here’s the thing. We are doing a huge disservice to our children, specifically teens, when we constantly hand them cash. Unfortunately, they tend to then expect it, time after time. They aren’t taught to manage money, save it or respect it. In time, their perspective of how to earn their own income is warped.
But, here’s the greater issue. When teens (or anybody, for that matter) learn to create their own income, they become empowered. They gain a sense of identity and an “I can do this” attitude. The results? Greater confidence, heightened self esteem and a sense of independence. This holds true whether they’re working for somebody else or has taken the entrepreneurial route.
With the tight job market these days, it’s important to introduce the world of entrepreneurship to our kids. How? Brainstorm with them and encourage them to think outside the box. Ask them some key questions: what do they love to do? What are they really good at? What skills do they have? Don’t discount any ideas to start, just write everything down on paper. You can then start to weed out those ideas that don’t resonate with you. Have fun creating flyers, business cards or even a simple website or blog. From dog walking to babysitting to mowing lawns, there is always some way to create cash.
With this spark, amazing things can happen over time. Gift your kids with tools and support to empower them with this invaluable life skill.
What does football and finances have in common?
October 6, 2009
OK, I admit it. I like football. This season has been especially exciting to watch. Although I don’t understand all the strategies just yet, I enjoy watching the carefully planned plays. Sometimes they work, sometimes they don’t, but nevertheless, very fun stuff to watch.
As I’m watching the games, it occurs to me that football and finances have a lot in common. (I admit, sometimes it’s hard for me to turn my ‘work’ brain off, even in the middle of an exciting game). The plays are carefully planned, the teams spend countless hours practicing and strategizing, there is an experienced coach that guides the team
to victory and they never give up. Their goal is specific, understood by all and there is serious motivation to win. Do you see where I am going with this?
Your money matters, your financial roadmap, requires the same mindset as those big, bad, burly football players. If you don’t have a specific plan in place, if you don’t practice and don’t have someone guiding you, you will probably not end up where you want to. When it’s time to send your kids to college, go on that vacation or retire, where are those funds coming from? What if you lost your job unexpectedly? Do you have reserves to fall back on?
Imagine those football players running onto the field with no plan, no plays. It would almost be painful to watch. Complete chaos. Is that what we enjoy watching? Doubtful.So, is your financial picture complete chaos? If so, don’t panic. It’s never too late to get things in order.
Start by having a plan. Write down specific goals, what action steps are necessary to achieve those goals and by when. If lifestyle changes must occur, define what those changes are and commit to that change. Sit down and pull all your bills out for the last month. Determine your fixed expenses and compare that to what you actually spend every month. Sometimes this alone can be a real eye opener. Where does all that extra money go? The local coffee house? Lunch out? Those shoes you had to have?
Here’s an interesting statistic: If you saved $4 per day (one coffee) for 5 days per week for 52 weeks and invested that money at 10%, do you know how much you would have after 40 years? Some would say about $80,000, $90,000 even $100,000. Nope, you would have $553,396. Wow. Compounding interest, your new best friend.
As we wind down this year and welcome the New Year, I encourage you to spend some time and make a plan. You deserve this. If you need some help, seek guidance. Taking action is the most important step you can take. I wish you the best.
College and credit cards
August 13, 2009
Money Minute-Teen $$$ allocation
February 18, 2009
Life's Lessons in today's nutty world!
February 16, 2009
With the present day economic situation, many people are in panic mode. All the doom and gloom is making even the most optimistic people a bit fearful. With this state of mind, decisions are being made, that may or may not be best.
While we are reacting to the day’s events, our kids are watching us closely. They are observing our behavior, our decisions and our attitudes. Although this normally happens everyday, it is especially important to be aware of this during these challenging times.
Some kids are asking their parents “are we going to lose our house”, “do we have enough money”, “why can’t we buy this, we never had a problem before”. The very core of their stability, their security and their safety is being rattled. For some, especially younger kids, this can be very traumatic.
So, what are we, as parents, to do? In my opinion, we have two choices: One, we bring our kids into the fear, panic and uncertainty mode that seems to be running amuck, or two, we capture an amazing opportunity to empower our kids with money and life skills. I choose the latter.
First, change your attitude. Take control of your fear and panic and step back for a moment. Ask yourself, “what can I do today to change this predicament?” “How can my lifestyle choices be adjusted so that I now prioritize my expenditures?” “What type of resources, skills and talents do I posses that would help me start my own company?” Be creative, look for opportunities (they are everywhere) and know that ‘this too shall pass’.
Whether you realize it or not, this is a perfect opportunity to teach your kids, whatever their age, invaluable life lessons. They should start to evaluate the way they spend their money, especially teens. How much of their money is being spent on fast food or coffee houses? Do they really need that $100 pair of jeans or would a pair at half the price be just as nice?
What percentage of their money is put into a savings account? This is a great opportunity to show them how that savings account may someday get them out of an unforeseen predicament.
Do they have credit cards? If so, show them how credit card abuse has created this environment of debt gone wild. Teach them the correct way to use a credit card and how misuse will cost them dearly.
I encourage you to involve your kids, age appropriately, in the present day circumstances. Let them realize they have control over their destiny by the choices and lifestyle habits they create for themselves. Once they realize they have this power, much of that fear will disappear. My hope is that you realize the same.
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