The Perfect Summertime Activity for your Teen!

April 14, 2013

Welcome to our newest subscribers! We have had quite a few new families join us recently and I’m very happy you’re here!

I was so excited to read a recent article about Maryland schools requiring financial literacy to be added to their curriculum. If you are in the Maryland area and have heard the same, please let me know. I am in the process of researching this and would love confirmation!

How great would that be? Finally, our public school systems acknowledging the importance of “life skills” in the classroom! Imagine our kids coming out of high school with the knowledge and confidence of knowing how to interview correctly, how to manage their money wisely, building business relationships, understanding time management and stress reduction techniques! I’m getting excited just thinking about this!!

As summer approaches, many parents struggle with how to keep the “brain juices flowing” with our teens, myself included. Summertime is a great time to relax and enjoy time off from the crazy schedule of school commitments, but it’s also important to stay active, both in body and mind.

Well, I’ve got just the answer…at least for the mind part! My online Money School is a perfect way to entertain and educate your kids (and possibly Mom and Dad too!) This program is comprised of 40 lessons, broken down into 10-15 minute videos. The material is comprehensive and the perfect gift for anyone in high school or going off to college. As a thank you for being a loyal subscriber, I am offering this Money School for 40% off the retail price for 4 DAYS ONLY! This offer ends on April 18, 2013! Enter coupon code “SUMMER” at checkout!

You can learn more about the complete program here: http://teenscashcoach.com/products/napt

Have a wonderful week and please let me know how I can help you!

 

 

Football and planning for your future…

September 10, 2011

I love posting this article during football season. If you’ve read it before, read it again, as it will be a good reminder for you. If you’re reading for the first time, enjoy!

OK, I admit it. I like football. 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. Compounding interest is your new best friend.

So, make plans for your vacation and sending your kids off to college, just remember to plan for your money issues as well.

Teens and jobs…a mom’s question

July 9, 2011

After my blog post last week, I got this great letter from a reader. She agreed to allow me to share her question and my response. You may resonate with her, and as she did, feel better after you read what I had to say. If you missed last week, read the article below this one.

Her question:

I read the article about teens working. I have read other articles with similar information. The part that I have trouble wrapping my mind around is this: once an adult, the child will forever be an adult. There is a short period of time where the child can just be a child. My son, 15 years old, schools 11 months out of the year 5-7 hours a day pursuing his bachelor’s degree while finishing his high school requirements. He participates in speech and debate, Moot Court, Model UN as well as organized sports. He has plenty of friends through those activities and is honestly very happy. So, am I a bad parent for not making him get a job? (He does do some landscaping when jobs are sent his way and he is required to do chores and he gets no allowance.) Is my perspective wrong? Should I pull him from his studies or activities that he loves so that he can work at the ice cream store up the road? I am not being cocky, I really need to know.

My response:

Thanks for asking such a great question. I can hear in your “voice” the struggle you are experiencing.

It sounds like your son is a very motivated and driven young man. To be working on a Bachelors degree at 15 years old is very impressive!

There are two main reasons I suggest a job for teens. One, it teaches them accountability. As an employee, they are required to be at a certain place, at a certain time, doing a job that requires work. The responsibility that goes along with that gives them a good indication of what life is about. Two, with the funds they earn, they can learn how to manage money wisely. They can start to save, invest, give back, spend and understand budgeting.

Having said all that, I believe your son has the first reason down to a science. Given what you have shared with me, he has a total understanding of being accountable and responsible. This is a non issue for you.

As far as teaching him about money, he does need some way to understand smart money management. I know you plan on purchasing the online money school, which will be a great asset for him. I’m hoping he enjoyed the book and learned a ton. This will give him a definite edge when he gets out in the world.

But, like playing tennis, until you go hit the ball, you can’t really know what it feels like to play the game. You can read and study, which will help you with strategy and rules, but until you get on the court, it’s hard to “feel” playing. So, I’m not suggesting he get a job at the local ice cream store, just for the sake of getting a job, but I do suggest he somehow gets some money in his “hands.” How? Here’s an idea I’ll run by you…

Come up with a figure that you spend on him every month, not including food.  Calculate what you spend on clothes, sundries, the activities you mentioned, play money etc. At the 1st of the month, give him that amount of money to budget for the month. Let him experience paying cash for these items and budgeting the money himself. If he runs out of money before the end of the month, let that be a learning experience for him.

You can also include him in your household payments, if this is something you wish to share with him. Take the opportunity to teach him with everyday situations. Whether it’s making him shop for a sale or negotiating a purchase, these daily experiences will help him understand that money management is the key to wealth. It’s not what you make that makes you wealthy, it’s what you keep.

Perhaps he can find a job that pertains to what he is studying. This way it becomes both work experience and income.

He obviously has a great work ethic and is very bright. You have done a great job in exposing him to some wonderful opportunities! As he learns the ropes to being money savvy, he will be well on his way to success!

I hope this helps.

She responsed with feeling much better and understood my point and suggestions.

It’s all going to be okay…

March 13, 2011

Given what is happening in our world these days, it’s easy to get stuck. Stuck in the unknown, stuck in fear, or stuck with worry…it tests us all. If we allow ourselves to only focus on the challenges and tragedies, our days can become very bleak.

I’m not suggesting we ignore what is happening around us. Quite the contrary, I feel we should take action to help those around us in every way possible. Whether it is our time, our money or our prayers, we should help.

So, where am I going with this? Over the last several years we have been bombarded with the financial crisis. It would be literally impossible to turn on the news without some sort of story related to our economic challenges. No doubt, we have had some difficult times.

But, I’m here to share some inspiring news! Here’s some statistics that I think will make us all feel better. As you probably know, in 1932 the U.S. experienced the Great Depression. Did you know that in the subsequent 5 years, the market experienced a 194% return? Exciting to think about, isn’t it?

In 1982, the U.S. had the worst recession it had experienced in the prior 25 years. But, in the subsequent 5 years, the market experienced a 183% return!

Here’s one more. In 1994, the U.S. had a dramatic tightening of interest rates, (which means interest rates were going up). In the following 5 years, the market experienced a 213% return! Wowza!

Even in our difficult times, we have rebounded, and rebounded nicely. Look to the future with optimism and hope, as we will surely look back at this time in history and appreciate the healthy rebound. It’s all going to be okay…

Should I pay off my mortgage?

December 12, 2010

Here is the question I was asked recently:

Is there an advantage to paying off your mortgage when you are in your 70′s with financially stable monthly income and retirement savings?  House is worth about 1 million and I owe $300,000.

First, I would like to say, well done! You’ve obviously done a great job of managing your money wisely.

Your question is a good one, with several factors to take into consideration. From a purely financial perspective, I recommend you contact your CPA to determine the tax consequences of paying off, or not paying off, your mortgage. Depending upon your income, tax bracket and other deductions, it may, or may not, make sense to pay your mortgage off.

From an emotional perspective, many find a sense of peace knowing the house is owned free and clear. They know the equity will be passed onto their heirs, without concern of debt issues. If you are one to feel at ease, knowing you have no debt, then paying off your mortgage may make sense, assuming of course, it doesn’t take a big bite out of your remaining assets.

Having said all that, I do have additional points that I think you should consider. Suze Orman would have my head for what I am about to say, but I’ll say it anyways. Although owning a home free and clear does bring a sense of peace, it may not be the best use of your funds. Here’s why: if the majority of your assets are tied up in your home, you may not have access to money when you need it most. If you needed funds for a medical emergency or if Mother Nature decided to surprise you with an unforeseen disaster, you cannot get to that equity immediately. Cash is king!

The other consideration is the interest rate on your mortgage. If your interest rate is very low, you may be borrowing cheap money. Perhaps you can put that money to better use by investing those funds in the stock market, real estate market or a business, rather than paying off your mortgage. Don’t get me wrong, I am not saying you should leverage your home to the hilt to invest in risky alternatives, especially at this time in your life! Capital preservation is paramount at any age, but especially in your golden years. But, making your money work for you is a wise investment strategy, so do weigh all your options.

Many factors go into this decision, as mentioned earlier. You must consider the amount of liquid assets in your portfolio, your present living expenses, interest rate on your mortgage, tax consequences, risk tolerance, age, and alternative uses of your funds.

Please discuss these details with your accountant and financial advisor, as these individuals know your personal circumstances. Doing this homework before you make any major decisions is always a must.

Help, I can’t get out of credit card debt!

October 9, 2010

I was recently asked a question about credit card debt that I think many people can resonate with, so I decided to post my response. The question was, “I have about $8,000 in credit card debt and I’m making payments, but it seems I’m not making any progress. Should I just declare bankruptcy?”

Here is my response:

Your question is a common one, especially in these challenging economic times. People are using credit cards to buy groceries, gas and other necessities. I’m happy to hear that you are making payments and taking a proactive approach.

You aren’t seeing much of a dent because most of your monthly payments are going towards interest, not the principal. Take a look at what interest rate you are paying and try to get that down. Contact your credit card company and speak to a supervisor. Tell them you are doing everything you can to make these payments, but you are having a tough time. Ask them if they can reduce your interest rate or have any type of special programs for people in your situation. Bottom line, it’s in their best interest to work with you, because if you decide to declare bankruptcy, they may never get a dime. (By the way, bankruptcy should be avoided at all cost, as it creates havoc to your credit score for years).

Fortunately, there is a lot of help for consumers who are overwhelmed with their debt. Some of the ‘debt help’ or ‘debt consolidation’ businesses aren’t exactly legitimate. They will typically ask for a nice chunk of money up front and oftentimes, can create more of a mess than what you started off with. Only work with debt counselors that are recommended by the National Foundation for Credit Counseling (www.nfcc.org- 800-388-2227).

These counselors will sit down with you and work out a repayment plan. Typically, they will gather all your debts and you will make one single payment to the counseling agency. Oftentimes, the counselors will negotiate deals where some of your credit is forgiven or they can get your interest rate reduced. This service isn’t free though, so be sure to ask what their fee is.

Again, much of this can be done on your own. Don’t be afraid to contact your credit card companies and push a bit. If they say no, call them back in one month. Always speak to a supervisor or manager.

On the other side of the coin, let’s talk about ways you can make larger payments every month. Take a hard look at your spending habits and find items you can cut out of your monthly expenses. This part of the equation is always challenging, as we have certain habits that can be tough to break. Here’s a few simple ways to cut back:

• If you eat lunch out at work, consider taking a sack lunch
• Make coffee at home in the morning rather than hitting the coffee shop
• Check your cable TV and cell phone plans and see if you can cut back on services
• Watch the ‘emotional spending’ going on (buying something to feel better)
• When purchasing something, ask yourself “do I need this or want this”. If you answered ‘want’, put it back.

I realize this can feel like sacrificing quite a bit, but consider how great you will feel when your credit cards are paid off. Plus, the interest that you will be saving over time can be applied towards building your financial freedom account! I know you can do it!!

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:

http://www.forbes.com/2010/04/02/financial-games-for-kids-personal-finance-monopoly.html?partner=financial_newsletter 

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.

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