Posts Tagged ‘Saving’

Raising Financially Savvy Kids

June 12, 2009

Every parent wants their child to grow up to handle money responsibly.  Many of us know from experience what financial dangers await them when they approach adulthood.  It’s wise for us to prepare them now with knowledge and experiences that help them manage money well in their adult years.  Below are some actions parents can take to begin shaping childrens’ money knowledge.

1) Discuss money with your child.  Children need to know that money has to be earned.  They need to know that it is finite (there is only so much).  They need to know that it’s a result of work.

2) Encourage saving.  Children need to see the value of this at an early age.  Simply getting a clear plastic container and putting their money in there can be a good start.  A parent could even put a picture of their desired purchase on the container as a visual reminder of why they are saving their money.

3) Discuss giving.  Teaching the value of giving can do wonders to help your child be a helper of those in less fortunate situations.  Dropping change in a Salvation Army tub or the offering plate at church can be opportunities for your child to know they are helping others.  It’s also smart to teach your child that they can give in non-materials ways as well.  Activities such as helping the elderly with lawn care, planting flowers at their school are a few examples of help that doesn’t cost money.

4) Start working early.  Children need jobs.  As early as 3 years old children can begin doing tasks around the house.  These jobs need to be age appropriate and well defined.  It’s OK to pay them for additional jobs that you find acceptable.  They have to complete their non-paid jobs first, however.

5) Partnering up on meeting goals.  Parents of preteens and teens can partner up to help their child reach financial goals.  If a child wants a $300 game system the parent can match every dollar they save up to $150.  The child gets exposure to goal setting and responsibility while the parent ponies up to the agreed upon match.  This can even apply to college spending money as well.  If you’re the parent of a college age student summer time is a great time to institute this type of agreement.

What are your thoughts about raising financially smart children?  What would you add to my list?  Feel free to drop a comment.


5 Signs You Are A Money Magnet

June 10, 2009

Is money actually drawn to some people? Is it repelled by others?  Interesting thought isn’t it.  How is it that some people never want for money while others never have 2 nickels to rub together.  Which one are you?  If you’re interested in becoming a money magnet here are some traits that I think are necessary to attract money:

1) You know where your money goes.  It’s plain and simple.  People with money have a system wherewith they keep track of how it is spent.  Whether it be business or your own checking account, you must be a money tracker.  For many of these folks it means they have a budget (a plan).

2) You place high value on saving.  Money is attracted to people who respect it enough by saving some of it.  It’s not the spent dollar that makes you wealthy but the one you save that does the trick.  You can’t reap the benefits of compound interest if you never save or invest your money.

3) You seek wise counsel.  Nobody is ever successful with money without surrounding themself with competent money managers.  None of us were born with all the skills necessary to manage money.

4) They seek out profit not wages.  The wealthy aren’t concerned about how much they can make an hour.  Their focus is ROI – return on investment.  They seek out investments and ventures that promise great profits.

5) They value diversification.  The wealthy seldom put all their eggs in one basket.  They have a game plan that accounts for unexpected market movements.  When they suffer in one sector, the other portions of their portfolio fare well.

How many of these traits apply to you?  If you had a 6th sign to add to this list, what would it be?

Get Your Head In The Game!

March 31, 2009

Have you ever been out of touch? clueless? puzzled?  Maybe you got benched by your coach for not having your head screwed on right?  You just weren’t up to the task and you were sent to the pine for some reflection time.  You ask yourself:  What did I do?  What was I thinking?  How did I forget what we practiced? Mismanaging money kick you to the sidelines as well.  Managing money is a game.  There are rules to follow.  There are offensive and defensive moves that must be practiced.  Neglecting the principles and practices can result in failure.  Below you will find some tried and true advice to keep yourself in the financial game.

1) Know where the goal is.  You must know your destination.  You need to know what produces results.  Is your goal to be debt free?  more unity with your partner about money? start investing for retirement? I’ve heard it said that a goal is a dream with a deadline.

2) Have a solid offense.  Offense means putting points on the board.  If your goal is to have a comfortable retirement, then you need to designate a place for this money to go.  Some of your choices are IRA, Roth IRA, 401K, and pensions.  You must have a budget as well.  If your dollars don’t have a destination you will not get the most out of them.

3) Have a solid defense.  You need to protect what you earn.  If you’re married and have children this part of your game needs serious attention.  Some examples of good defenses are: having reliable insurance (home, life, auto, health,disability), emergency fund, and a will.  Life has risks and you need to be prepared ahead of time. 

4) KnowYour Strengths.  You need to be aware of the options available to you.  Not using Michael Jordan or your 401K can have disastrous results. In regards to retirement, you need to know what is offered by your employer.  You need to educate yourself about these options so you can maximize the benefits you are offered.

The Lost Art of Saving

January 15, 2009

Why are families in America not saving money anymore?  Each pay period all the money comes in, all the money gors out.  Where is the discipline to save?  Below are what I think are some reasons along with solutions to deal with them.

“Gotta Have It Now” Thinking.  Consumers today are very impatient.  They see a pricy item packaged terms such as “No Payments, No Interest” and jump on the opportunity.  Having stuff is allright as long as you understand the opportunity cost of having it now.  The payments and interest do get paid (usually kick in after 90 days or so) and the already tight budget gets tighter because “I want it now” thinking prevails.

Solution: Save for big purchases.  You will be a lot more happy paying cash for it than being chained to those payments for 24-36 months.  Besides, if you’ll admit it, the one you own works quite well as it is. 

Availability of Credit.  Up until this past year, if you could breathe you could obtain credit.  While credit standards have tightened a bit lately, there are still abundant offers to sway consumers to buy.  Being in a recession hasn’t slowed down TV advertising and hundreds of offers to obtain credit.  Advertising debt is a billion dollar industry.

Solution:  Just Say No.  You can wait and save for the item and purchase it later. 

Lack of Discipline.  Today’s consumer is not interested in having a financial plan.  You’ve heard the phrase:  “Those that fail to plan, plan to fail.”  What happened to planning ahead for your financial goals?  You will need new tires in 6 months, you will retire someday, you will send Jasmine off to college, you will die (not a popular idea).  This list doesn’t even cover all the events you will go through.  It takes concentrated effort to address these issues.  

Solution:  Put these issues on paper and begin looking at your entire financial plan.  If you’re married block off an uninterrupted hour to begin talking about these topics.  You and your  family will only benefit by beginning these conversations.