Teens, money and mistakes
June 2, 2010
This week we’re on to number three!
The number three mistake we as parents are making: Not holding our kids accountable. If your child does something against the household rules, typically there are consequences. Pull on the dog’s tail and you may get bitten. This is how our kids learn right from wrong, good from bad, etc. When it comes to spending money or using credit cards, oftentimes parents come to the rescue. Bailing our kids out of a financial mess, without having them pay the consequences, isn’t holding them accountable. As a parent of a teen myself, I understand how difficult it is to watch our kids ‘fall’, but fall they must, in order to pick themselves back up. Stop rescuing and instead, use the word ‘NO’ more often. Easier said then done, I get that, but start today and they reap the benefits tomorrow.
Fantastic stories by Teen Entrepreneurs
April 27, 2010
I love sharing inspiring articles that I come across. You’ve got to have your kids read this one as well! Enjoy.
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.
When it comes to money, what do teens have that Warren Buffett does not?
October 28, 2009
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.
The Race is on!
July 1, 2009
It’s 2:00 am and it’s starting. The mind madness. You awaken for no good reason and suddenly the brain goes on overdrive. Every item on your to-do list, all the worries of the world and the health of your loved ones, seem to race at lightening speed through every cell. “My gosh, please stop, I just need to sleep,” you say to yourself as you try to reason with your brain. Why is it that these issues always seem worse at night? There must be some scientific reason for it.
If it makes you feel better, you aren’t alone. In fact, it may even bring a smile if you think about the thousands of others laying with you, at the exact same time, contemplating the similar issues. Ahh, life.
I’m not a psychologist and I don’t claim to have the magical answer to this dilemma. I, too, struggle with the mind madness game. But, I can tell you what helps me. Faith and control. I know what you’re going to say…”But if you have faith, you realize you aren’t in control.” Yes, faith that a higher source is guiding you is fundamental. But, I also believe that God (or your higher source) takes care of those who help themselves.
So, what am I getting at? Rather than panic and get caught up in the media crazed doom and gloom, I suggest you step back, take a breath, and realize there is much that you can do to take control of your life. Take each item that you feel challenged by and break it into smaller pieces. Take small steps towards the resolution to your problem.
Here’s an example. Let’s say you or your spouse just lost a job. It’s scary, no doubt. But, if you get caught in the panic and fear, you can’t be productive in moving forward. Whether it’s looking for a new job or venturing out into the world of entrepreneurship, your mind needs to be open, clear and panic free. This mindset doesn’t always come easily, I’ll give you that. But, being proactive vs. reactive puts you in a place of empowerment and strength, rather than that of a victim.
Another example would be money issues. In this economic climate, many have watched their 401K dwindle, credit card debt increase or cash flow tighten. Again, no doubt, this can be a scary time. I’m not suggesting you put your head in the sand and “imagine all is well.” I’m suggesting you step back and look at what you can do to make things different. Are there spending habits that can change? Can you forgo dinner out for now? Can you come up with clever ways to bring in additional income?
Let’s even turn this around and make it an opportunity for growth. Personally, I think this is a great opportunity to teach our kids the importance of managing, respecting and saving money. What better time to show them what happens if they don’t learn to manage their money. Teach them the importance of staying out of credit card debt, having a savings account in place and creating healthy lifestyle choices.
This seems to come full circle, as much of our mind madness at 2:00 am, comes from our worry for our kids and their future. We want them healthy, happy and at peace. Part of that peace is knowing they can take care of themselves financially when they enter the world on their own. Be proactive and teach them, guide them and give them the gift of money smarts.
3 key questions to ask yourself when looking at mutual funds
June 4, 2009
Fun with mutual funds!
May 27, 2009
The Bulls vs. the Bears!
April 15, 2009
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