Teachable Money Moments with Your Child


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Chances are, you weren’t taught about money. If that’s the case, hopefully you’re changing that pattern with your kids. No matter how old they are—even if they are at college, or raising kids of their own, it’s not too late to teach them. This of course, comes only if they’re willing to hear you out. There are ways to take advantage of teachable moments. If they’re not willing to listen, back off—but then don’t give in to kiddie tantrums or phone calls for money. I recently read that baby-boomers are far worse off than their parents when it comes to knowing how to save money. Their parents may not have had as much, but they knew how to save—and did. Begin now to teach your kids and your grandkids easy ways that add up.

One teachable moment can be offering choices. “The two things you want are out of your budget. You can get this toy for $1 today, or save and get that toy for $5 another day. For older kids, you can give them an allotted amount for clothing and tell them “This if what I’ll put toward your shoes. If you want the more expensive ones, you need to make up the difference.” If you send your teen to the grocery store for an errand, give them guidance. Send them off with a coupon for what you want, give a price range, “Get bananas if they’re less than .50 lb”, or give them directions to buy what’s on sale, “If bananas are more than .50 lb, see what’s on sale. Check the prices on strawberries.” If they have a cell phone, you can always ask them to call you from the store if they have questions. If retired husbands can do this, so can kids. For the child who moves back home and still spends money. Have them pay rent to you for the purpose of you putting the money in a special account to be given to them when they’re back on their feet, and have enough money put aside to move out.

You get more bees with honey. Praise your kids for things done right. If you can, do this in front of someone else. This includes good behavior and wise money choices. A phrase like “You’ll be so proud of  Joey for how well he handled his $1.00 at the store today” is a better reinforcement than, “You’ll never guess who behaved at the store today!” Make sure your praise is genuine and not sarcasm, or a left-handed compliment.

Eat before you go shopping. I remember as a kid and into my teens going shopping with my mom. If it was around lunchtime, we’d always eat at home before heading out. Two reasons: To save money. To keep blood sugars and therefore emotions in tact. As I got older, I’d insist I wasn’t hungry, and that I’d be fine. We’d pull into a parking lot and sure enough, I was hungry! I wasn’t interested in eating out, I just had a high metabolism, and if I hadn’t recently eaten, hunger pangs and crankiness set in. Like magic, my mom would pull a cut apple or some other form of portable sustenance from her purse. As an adult, I know I can go from not hungry to head-spinning hunger. If I’m headed out the door, I’ll bring food with me. A banana, a cut apple, some crackers, cuties or a sandwich for mid-trip. If you tire of a cranky child, try staying a jump ahead, offer a snack at home or in the car on the way to your errands.

Everyone will be better off.

People Who Feel Poor Take More Risks


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Meir Statman is a finance professor at Santa clara University. According to Money magazine, he’s one of the most influential experts in behavioral finance (how your emotions and beliefs affect your decisions about money.) Statman thinks America needs to move from the polite nudge of encouraging people to save for retirement, to perhaps a push, and maybe even a shove.

Statman states, “People who save end up supporting non-savers.”

I’ve seen it. The parent who saved all their life, and their kids who are in constant need of support. Finally, the kid moves in with the parent. The agreement is for the adult child to put aside money, to build a nest egg while the parent helps them out. That’s not always how it goes. The adult child gets new clothes, travels, and spends time with their buddies doing activities that cost money. The parent has lost the deal, and most likely, the adult child has little money saved, even with their bills being paid.

People who are savers will save with a push. Just a nudge will do. They get the concept of needing money to function in this money-barter system we as humanity have agreed upon. More than half of the population, however, seems to be in crisis mode. They have no plan. They go for instant gratification rather than saving for something, especially retirement, which seems so far off, and so vague. What does “retirement” mean? For some it’s only about big vacations, or living a long time. And people will justify their lack of saving with, “I don’t travel.” “I won’t live forever.” “I’ll re-marry rich.” Oh, really? And then they meet the person they want to spend the rest of their live with. That person has saved money (for one), likes to travel, plans to live into old age, and isn’t rich (by the non-saver’s standard.)

Here’s what Statman proposes: Set a low minimum (8%) for a mandatory savings plan off one’s income. Other countries such as Israel and Australia set 15%. This would be on top of social security. People scream foul. They say it’s paternalistic. But, if they’re not saving, they’re relaying on others to carry them. By having a mandatory savings program, people are prevented from temptation now, to have it later.

Let’s say someone is honestly, super tight on money. Don’t start at 8%, but start somewhere! So many people say they can’t. It’s not the guy who socks away $10,0000 every couple years who comes out ahead. It’s the guy who consistently socks away $50. or $200. a week.

Statman says, “When people are feeling poor, they are willing to take more risks. You can have two people each earning $100,000 a year: One of them says, “This is plenty.” The other feels behind. That one is more willing to risk losses in the hopes of reaching his or her aspirations.”

Meir Statman’s 2011 book is: What Investors Really Want

For the Next Thirty Days


When I tell people I don’t have a television, I’ll get comments like, “You must get a lot done.” Or I’ll get looks like, What rock do you live under? I’ve been offered at least one television a year for eight years.

I’m not advocating everyone giving up their television. (Having one per house, and not in the bedroom, maybe.) I am encouraging people to look at what they do with their time, and think of what they’d do if they had more time. What have you thought of giving up? (Gossip, swearing, smoking, sugar, fat, negative thinking. . .) What do you want to do? (Yoga, sing, read, water color paint, cook. . .) Don’t have time to cook a healthy, tasty dinner? Get the family involved in the activity. Husbands can shop. Teens can chop onions. Families can talk during dinner (oh, aren’t we glad we gave the television away!)

Here’s a six minute video about trying something new for 30 days. By the way, it takes 27 days for something to become a habit. Once a habit is formed, you’ll miss it if you break the pattern.

Dinner on a Budget


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Dinner on a budget, fighting inflation, making money go further at the grocery store. Call it whatever you want. Here are some tips for healthy eating and saving money.

We only need three ounces of protein a meal, and it doesn’t need to come completely from meat. By cutting down on meat intake, you’ll save money, and depending on how much meat you’ve been piling on your plate, you may be doing your body a world of good. Have a small portion of meat and a high-protein side dish, such as beans, lentils or grains.

Check your cupboards and refrigerator. I have a fit if I have to toss food. Often, I’ll turn one meal into another meal to use up what I have. I may have roasted vegetables one night with leftovers. The next night, I may have soup with the leftover roasted vegetables in it, Or add cheese and pasta sauce to the vegetables. Use ingredients before they expire. Get creative without going to the store. Maybe you’ll find a can of diced tomatoes, a can or bag of frozen corn, and a can or bag of frozen green beans. By adding rice or pasta, spices and some meat, you’ve got a meal you can make in one pan. Or, add chicken broth and you’ve got soup. For great soup, you could use the bones from a rotisserie chicken and use up “tired” vegetables from the refrigerator. (Celery tops, onion chunks, carrots, parsley—whatever you have.) Add enough water to cover the bones and cook for an hour or so. Take out the bones and vegetables and add new/good vegetables to the broth.

I used to buy black and Northern beans in cans. I didn’t know how to use the ones from the bag, and didn’t want to have to plan ahead so far to soak them for hours before cooking. I have a 94 year old neighbor who was upset with me when I told her I never “made” beans before. She brought me a bowl of Northern beans and spaghetti (no sauce) and told me the beans were from a bag, and she cooked them for one and a half hours (no soaking.) I thought they’d be hard and tough. They were delicious. The beans were far better than the caned ones, and I’ve learned they last longer in the refrigerator than canned ones. Stored the un-used cooked beans in a jar with some of the water they cooked in covering them. You’ll be happy how easy and inexpensive beans form a bag are to prepare.

Take advantage of the grocery store sales. If you’re low on something, but not out of it, consider buying it before you run out, when you may have to pay full price. You may need to cook up the sale meat that day, or freeze it, but if it’s something you’ll eat anyway, it’s savings.

Buy oatmeal in the drum rather than the packages. Or, if you’re okay buying from bulk bins, scoop up savings that way.

Buy smaller amounts to keep things fresh. I love what Nabisco has done with the Original Saltine crackers. Fresh Stacks are packed in smaller portions, so they don’t go stale. Rather than having four long packs of crackers, this box has six packs. I think you get two ounces less of crackers and pay about fifty cents more. It’s a bit more expensive—or is it? None of my saltines go stale anymore.

The Average Cost of the Prom


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A new Visa survey says this year’s prom will on average cost $1,139.

WHAT?!

The survey didn’t break the spending down, but it includes dresses, tuxes, shoes, prom tickets, limousines, hotel or after dance events, corsages, jewelry, hair, makeup and extras.

In the last two years, prom cost has gone up 40 percent. As usual with this type of event it’s the lower income households that are being hit the hardest, and unfortunately, they are spending more money on the prom than those who can more easily afford to. According to the Visa survey, families with income less than $50,000 are planning to spend $100 more than the national average on prom. Single parents are spending double the amount of married parents ($1,563 versus $770.)

Of everything I’ve read and heard on this subject, Nat Sillin, Visa’s head of financial literacy, put it best. “It’s [the prom] become a social arms race. It’s an opportunity for parents to engage their teens and have a conversation about budgeting.”

I applaud Sillin’s comment, and am amazed to read and hear parents saying, “I never thought I’d have to spend so much” and “How am I going to afford all of this?” You do not have to spend so much. A choice is being made. You’re supporting your child in their financial illiteracy by spending their college money, or whatever else spending $1,100 could help ease your mind. Some say the prom is the new wedding, since people are getting married later. Okay. . . the average wedding is now $20,000 and many couples either start, or go further into debt. So, maybe in that since, the prom is the new wedding.

Full disclosure. I didn’t go to my prom. I wasn’t dating anyone, and saw the prom as something for those in serious relationships. Yet, I thought those in serious relationships were nuts to spend tons of money playing let’s dress up and pretend, and be part of the stories flying around school the following week.

Instead of prom, four of us—two guys and two girls —all friends, went bowling. None of us were bowlers, but we wanted to go out and have fun. We had a blast.

If you’re a parent of a teen who will be prom age next year. Start talking now. Start talking about values, money, and choices. To put a $500 dress on layaway while some of it goes on credit card, some paid off by check, and some by family pitching in, is mind boggling to me. Is a $500 dress worth it? That’s just the dress. Do you really need a limo? $800 shoes? (I heard a guy bought them.)

$1,139 could be a month or two of rent; a semester of books; an Alaskan cruise or a flight overseas; a down payment for a car — or, yes, one high school event called the prom.

Add Two Zeros Savings Plan


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I came across a great “retirement plan” idea from a magazine article. The idea can be altered a bit for someone who’s just begun the workforce, too. It’s fun, easy to remember and can really add up into some serious savings.

Here’s the idea: Save your age plus two zeros every year. Whoo-Hoo 21! means putting aside $2,100 that year. The next year would be $2,200 and at Hello 50! you put aside $5,000. You can do this over the year-long period, or as a single, big birthday gift to yourself. You can also set it up with your bank to automatically transfer the funds into your retirement account with a preset schedule.

If you can’t set aside the two zeros for retirement now, put aside your age every week. ($35 per week when you’re age 35.) It’ll add up to half as much as the two zero system, but half is half more than nothing!

If you’re planing to wait until your birthday to begin this, write it down, set it up as a reminder and with your bank or you won’t do it. If it’s not important enough to do this week, it’ll fall to the land of could’ve, would’ve, should’ve. Be pro-active. Set it up now.

Quick and Easy Ways to Save Money


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  • Do you smoke? Quit! It’ll save about $2,000 a year — and your life. If you’ve tried but “it” didn’t work, call American Cancer Society for help: 1-800-227-2345 (1-800- ACS-2345).
  • Eat at Joe’s—Not. Eat at home! It’s healthier for you and your bank account. I love to grill. I used to be a vegetarian. Now when I do eat, I grill it. It’s easy clean up, keeps the smell of meat and fish outside, and it changes up my routine of cooking. Depending how often you eat out, this could save you $1,000 just cutting your dining out in half! For the last two years, for Mother’s Day lunch, I grilled filet mignon and lobster tails, boiled some rice and put together a green salad. All under $25. for two of us! (And I knew there wasn’t any msg seasoning, or hidden fatty something to any part of the meal.)
  • Wash your clothes in large loads, which saves water, and energy. If you just have a few colored clothes and are doing a load of whites, use Clorox Color Catchers. They really work. You can combine all your laundry rather than doing two small loads. If your clothes aren’t needing hot water, use cold or warm water. It gets them clean, is easier on your clothes, and saves energy. Air dry your clothes on a clothes line, or clothes rack. It’s easier on your clothes, too. This’ll save you $200 year, and your clothes will smell fresh-air great!
  • Three different people told me last month they were insulating their homes. It’ll save them money in the long run. So will insulating your water heater, setting its thermostat at 120 degrees and installing an automatic timer to turn it off when not in use. Doing all of this can save about $500 a year.
  • Unplug it. Did you know even when appliances are off, they still use energy? They use 5-10% of the  total household electricity costs—when not in use! If you can’t be bothered with unplugging them after each use, use a power strip that can be turned off. This super simple act can save you $200 a year.
  • Do your own lawn care. Mow the grass, pull the weeds, rake the leaves. Exercise and money saver all in one. It’s relatively easy for the average person. Now, people have flashy landscape, and someone else to tend to it. Think back. Most people didn’t have gardeners 30 years ago. (I was the one raking the leaves, 20 years ago, I was the one pushing the lawn mower — and the front yard looked fabulous!) Do it yourself could save you over $500 a year.
  • Peeww! What’s that smell? I like a clean house. I hate the smell of cleaning supplies. To some, the smell means a clean house. I say it’s a cover-up; a waste of money, product and lack of effort on the person doing the job. Cleaning products can also shorten the life of your floors, tables, etc. Use less, if at all. Got stained coffee mugs? Use a teaspoon of baking soda and water to clean them out. Dust. No spray involved, and it spruces up the house way more than a smelly spray. Mop the floor with a little bit of cleaner. Sometimes the eco-friendly stuff isn’t as good, but it depends on the product you have, it’s purpose, and your commitment to the environment. Cutting back on using cleaning supplies could save the average American $1,000 a year. (That’s a lot of stinky stuff!)

Be Money Wise


Money-Wise image credit: Good Search

Be money wise.

None of these tips cost you anything but will save you and others headache if you keep them up to date.

  • Have three-to-six months of income put aside.

I prefer not to call it an “emergency” fund, but I advocate putting money aside for the future. The money’s in savings, so as you save more, you have more money put aside, even without an “emergency.”

So, you don’t lose your job, or don’t land in the hospital for months on end. You’ll have money saved  for a smaller unexpected something (a car’s flat tire, a dishwasher that conks out, a dog needing a visit to the vet.) Did you know 70% of people don’t have money put aside that could over three-to-six months of living expenses. Can you save $20 a week? Make sure it’s accessible; liquid.By putting this money aside, you build a cash-buffer over time. You don’t have to start big, but you do have to start.

 

  • Check your credit reports.

Credit reports are free (one a year from each credit bureau), just make sure you’re on the legitimate industry’s official website www.annualcreditreport.com. Eighty-one percent of people don’t check their credit reports. It’s not only about your money, but your identity that your checking. The three major credit bureaus are Experian, TransUnion, and Equifax. Stagger your report requests every four months. Related post: Credit Report/Credit Score

 

 

  • Update your will.

Eighty-six percent of Consumer Reports survey respondents said they either didn’t have a will, and other  estate-planning documents, or hadn’t updated it in over five years. Even if nothing has changed in your life, check your beneficiaries on your will, insurance accounts, and retirement policies. I had a friend who didn’t update his will and when he died, his surviving wife was left with a mess. Some of the people he’d listed as beneficiaries had died years before. It complicated the process, and relatives had their hands out on behalf of the deceased beneficiaries. What a hassle. Update your will.

 

These are easy, free things you can do to keep your finances in good condition. Make becoming money wise a habit!

Earning Money


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Earning Money. Did you leave a job, or were you laid off, and are now back in the workforce? Did you take a salary hit? You’re not alone. According to Urban Institute, re-employed workers ages 50-61 have taken a -21% hourly pay hit compared to pre-layoff wages. Ages 25-34 have taken -7% hit.

Are you in this group? Did you leave a job and can’t find one at comparable wages? Are you willing to take a new job anyway, even if it’s not what you want, not what you’re trained for, and not at that pay you are accustom? If not, what are you doing for income? Are you living off savings? Moving in with others? Moving to a less expensive location?

How’s your attitude, and outlook for the future? Do you feel you’ll “land like a cat” (on it’s feet), or “land like a piece of buttered toast” (buttered side down)? Do you have a support system? Do they help in obvious financial ways, or in more subtle ways?

If you’d like to share on any of these thoughts re: earning money or related,  please do.

Budgeting Goals for 2013


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Happy new year! Now, stop eating, go to the gym and make a budget. Hello? Hey! Come on back here!

It doesn’t have to be hard or boring. None of it. It’s about allowing you to do the things you want to do. It’s about giving yourself permission, freedom—not limiting you.

Making a budget should be personal. It’s called Personal Finance. Personal comes first. You set the rules/goals. Having a budget and goals helps you reach your desired outcome. If all you do it put numbers on a piece of paper and you’re not a numbers person, you’ll find a budget boring and won’t be motivated to work it. For what are you saving? Is it a trip? Cut out some pictures of the place and include the experiences you want to have. Include photos of you smiling, money and symbols of a Higher Power —be it a sunset, dove, Krishna—something to remind you of hope and Infinite good available to you.

If you want a buddy to help keep you on track, agree to be accountability partners. Then do the numbers. You know what your rent/mortgage cost, and if you owe on your car. If your insurance is semiannually, divide by six and put it into your monthly expenses. Go through your expenses, even if you’re not positive what they run exactly. This is when an accountably partner is great. They can say, “Oh, I forgot to allow for vet bill expenses. Thanks for reminding me.” Don’t panic. It may take time before you have the unexpected aspects of your budget are covered, but do begin to think of your expenses and having the money for them. Build in a buffer zone for each category. Some months we eat more. We entertain, or splurge on special types of food. Other months, we may have car, child or vet expenses. Nothing gives peace of mind like knowing you’ve got the money in the bank account for the expense.

Do you go to the movies, shop or go out for lunch? Add up approximately how many times you go out and spend money, then add a “fun” column into your budget. This is a guilt-free amount from where you can take money for the fun.

If the budget you set up isn’t working for you in a few months, change it. Check in with your accountability partner and budget weekly or monthly until you get a feel for it. Then you can advance to a quick look monthly, and go into depth a few times a year unless there are big changes in your spending, then check more often, making adjustments. You can do this! Reaching your dreams and goals takes commitment, trade-offs and being aware of you want versus what’s become habit. Allow your budget to become this year’s habit.

So, Now, stop eating, go to the gym and make a budget.