Why More Parents Are Talking to Toddlers About Money

Category: Basic Money Management
Published: Wednesday, 15 October 2014
Written by Admin

Nearly two-thirds of parents with children between the ages of 4 and 12 pay their kids an allowance to teach them basic money management lessons, according to a survey from discount website couponcodespro.com. On average, these parents began teaching their kids the value of money at age 3, the survey found.

In a similar study two years ago, the American Institute of Certified Public Accountants found about the same percentage of parents using allowance as a teaching tool. But they did not start as early. In that study, kids typically received allowance by age 8. In another study, fund company T. Rowe Price found that 73% of parents talk to their kids regularly about moneyand about one in five stepped up the frequency since the financial crisis.

Talking more openly about money inside the household is one of the recessions silver linings. Many families experienced such a financial blow that they could not avoid the discussion. But even setting aside the recession, starting earlier and talking more frequently makes a lot of sense. In the online world, kids begin making money decisions earlier than previous generations, and when they come of age they will have far fewer safety nets. They need to begin saving with their first paycheck and never stop.

The most common money conversations between youngsters and parents revolve around saving in a piggy bank (73%), working for pay around the house (66%), budgeting for things the kids want (57%), and finding bargains at the grocery store (29%), according to the couponcodespro.com survey. The survey also found that the average weekly allowance across the age group was $13.50, which is higher than the often-recommended rate of 50cent; to $1 per week per years since birth.

The survey also found that 73% of parents paying an allowance admit to buying their kids treats, a practice that can undermine the value of paying allowance in the first place. Sweets and clothes I can understand, says Nick Swan, CEO of couponcodespro.com. But buying them toys for no reason when they are being given an allowance can backtrack on everything they are trying to teach their children about money.

Still, money talk may be beginning to make a difference. In a recent survey of Gen Z teens (aged 13 to 17), Better Homes and Gardens Real Estate found that half say they know more about money than their parents did at their age. Two-thirds attribute their knowledge of money matters to discussions in the home, and two in five credit discussions in school. Three in five have already begun saving.

This youngest generation also seems to be managing credit cards more adeptly than their older cousins, the Millennials. These are encouraging trends that, if they persist, will help the economy long term and may just insulate this youngest generation from another crisis.

How to Turn $10 a Week Into $1090 in 2 Years

Category: Basic Money Management
Published: Tuesday, 14 October 2014
Written by Admin

Wherever you scrimp to get 10 bucks a week - save it, and help it grow. Try this simple, and above all, safe investment plan to achieve a modest return, and learn some basic money management and investing concepts, too.

Why Parents Keep Repeating Financial Blunders

Category: Basic Money Management
Published: Tuesday, 14 October 2014
Written by Admin

GEORGE PAPADOPOULOS: It is hard to single out one single dumbest financial lesson that parents teach their children. The problem usually is caused by many dumb lessons done repeatedly.

It is unfortunate and even unfair to blame parents when they themselves are not knowledgeable about financial matters, in part because their own parents did not educate them adequately about money either. Kids learn many of their adult money habits from their childhood. Seeing their parents cavalierly use their credit cards to buy things they clearly do not need without explaining how credit cards work and their potential dangers will certainly not help the children when they get to college and banks give them plastic to buy things on credit, too; it is an accident waiting to happen. Personal responsibility to buy only what you can afford should be ingrained while growing up. Sadly, it is not.

According to the 2014 study by the Council for Economic Education, only 17 states require students to take a personal finance course. This is ludicrous; teaching basic money-management skills should be required in every school. Will it fix the problem? No, but it will certainly help.

George Papadopoulos is a fee-only wealth manager in Novi, Mich., serving affluent individuals and families. You can follow him at twitter (@feeonlyplanner), connect with him at Google+ or visit his firm's website.

Read the latest Wealth Management Report.

Drift, drown, or decide, it's your choice: Mayers

Category: Basic Money Management
Published: Monday, 13 October 2014
Written by Admin

One of the best books of my summer was Boys in the Boat, the story of how an unlikely group of young men from the University of Washington overcame enormous adversity to win a gold rowing medal at the 1936 Berlin Olympics.

Its a fabulous story, with a rare insight into the physical and mental sacrifices of competitive rowing, as well as the extraordinary exhilaration the team found in the comradeship and shared experience.

One of the books many revelations is the enormous power of goal-setting and how goals are a beacon, helping put day-to-day distractions in their place.

When applied to personal finances, distractions are everywhere, because nobody really wants you to save. They want you to spend whatever you have, whether on the end-of-the-aisle impulse buy or on the latest viral app for your phone.

The most obvious proof of how successful we are at succumbing, are savings rates at historic lows and the inability of the most privileged generation in history, the Baby Boom, to save for their own retirement.

A study last month by Bankrate.com found that a third of American adults have no retirement savings at all. Not a thing. Lest we feel smug, a Sunlife survey in February showed that almost one quarter of Canadians are looking to their homes as the primary source of retirement income. Tax-based incentives to save for retirement like RRSPs and TFSAs are for the most part, unused.

George Caners, a retired Brockville accountant and financial planner, takes a look at goal setting in a terrific book called So You Want More Money. It distills all hes seen in his working life and offers timely and perceptive advice on the basics of money management and investing.

Id do 1,800 tax returns a year and some of the things people were doing was nuts, says Caners, 66, who ran a practice for 29 years.

Im not a fan of self-published books, but this one is an elegant combination of how-to and observations on human nature. The anecdotes and simple metaphors help readers understand basic money management themes and where they fit into the bigger picture. For the simple, jargon-free writing you can thank his wife Marilyn, a dietician who edited the book. What she didnt understand, she asked George to explain.

So You Want More Money is available on Amazon.com or as a $9.99 ebook from www.caners.com. It offers up stories that illustrate the points and take a holistic view of money management. Sure, you have to spend less than you make and start saving, but the book also tackles such ideas as how to decide when you have enough.

Caners offers three rules for financial success: You can drift, you can drown or you can take charge.

Drifters float along with enough to get by, but cant afford luxuries. They dont plan, or try to understand their finances because they cant be bothered to learn.

Drowners are always struggling to stay afloat as they face crisis after crisis. For them, Its not a matter of picking a shore to land on, but a case of staying above the next wave, Caners says. [They] end up in a small apartment barely making ends meet.

Deciders see a good life ahead and figure out what they need to know to get there. Armed with that information they make the future happen.

Caners says as he did those tax returns, each telling the story of his clients financial and personal lives, there was no mystery about the keys to success.

There are three critically important elements, he says. The first is determination to achieve a goal. People who are determined do not get discouraged when they have setbacks. They learn from them.

The second is figuring out what skill you need to achieve the goal and the third is follow through.

Nothing happens unless you take action.

The eight boys in the boat passed these tests and made their own luck on the road to victory in Berlin. Its a lesson that can easily be applied to our day to day lives.