No, it’s not that talk, it’s the other talk.  The one about money.  Saving, budgeting, tracking, investing, and giving back.  The Money Talk.  A talk that many of our parents never had with us.  We had to learn it the hard way: on our own.

One of FamilyMint’s partners, The National Financial Educators Council (NFEC) is launching a series of ads about “The Talk”, and we’re so happy to see it!  Like the picture on the right, the ads liken financial illiteracy to a young child walking across a busy street blindfolded.  They encourage all of us to take the time to pass along what you’ve learned so far about money management and to help give them a leg up in how money will affect their lives.

Read more:
http://www.financialeducatorscouncil.org/financial-literacy-PSA.html

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How much allowance should I give my kids?

Good questions!  Here is some quick information that really will help.

First, about half of families using FamilyMint choose to provide an allowance to their kids.  For the most part, it averages about $.50/week for each year of the child’s age.  As shown in the kids allowance chart below, the average kids allowance for ages 1-5 is about $3, the average for ages 6-10 is about $5, etc.

Average Kids Allowance:

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Many experts will say $1/week multiplied by your child’s age is the “right amount”.  To this, we say nonsense! There is no “right amount” for every family and every child.  Every family and every situation is different, and allowance rates need to take this into account.

Here is some allowance advice that can apply to any family in any situation:

1. You already give them money; use this to set an allowance rate.
2. Use allowance as a teaching tool, not a entitlement.
3. Expenses do vary based on age, so adjust your allowance amounts every year or so.

About #1… as explained in this post, you already give your kids money, even if you don’t call it an “allowance”. You already pay for clothes, school lunches, snacks, movies, sports, entertainment, and more.  The problem is, if you hold the money, your kids’ role becomes that of a beggar or a salesperson.   The more they can convince you they need something, the more money they can get.  This does not create the right behavior or build skills that will benefit our kids long term.  Instead, add up how much you are already spending in some of these categories, give that to them as their allowance, and put them in charge of managing it.  In the long run you will probably spend less money, and in the process your kids have the responsibility and the learning that comes with it.

About #2… if you give them money and don’t tie it to any increase in responsibility, you are creating an entitlement that doesn’t teach them anything.  Instead, follow the advice in #1.  Put them in charge of some of their spending.  While they are young and the stakes are small, let them make mistakes like spending it too fast.  They will learn from the consequences (like not being able to see the next new movie with their friends), as long as you don’t bail them out and loan them or give them money “just this one time”.  Stick with it… they will be better off in the long term for it.

Lastly, a note about tying allowance to chores.  We know many families that do this, but there are some drawbacks to this approach.  First, if you believe there is a certain amount of responsibility the kids have in helping out around the house just because they are members of the family, then paying them to do this work actually works counter to this principle.  If the kids don’t do their standard chores, implement other consequences like more chores, but not loss of an allowance.  Also have other tasks available for them, above and beyond their regular chores, for which they can earn extra money or a commission.

An allowance works best as a financial learning tool for kids.  Give them responsibility and let them learn along the way.  Take advantage of all the teachable moments that FamilyMint helps create.

What are some other allowance best practices you have in place in your own family?

Copyright How much allowance should I give my kids? © 2012.  All rights reserved

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It’s the first week of April and summer is still a couple of months off.  There’s plenty of time to start looking for that perfect summer job. Or is there? According to Dan Kadlec of TIME magazine, “Hiring managers are confident they’ll need summer help and they are filling temporary positions earlier—as in right now.”  Additional good news according to Dan Kadlec is “After four years of tough competition for summer work from unemployed adults, teens will be competing more against other teens this year.” So to help your teens get started, here are a few tips to give them an edge in landing that coveted summer job.

• Establish summer goals – Whether your teen is looking to make extra money or gain some valuable experience during the summer, they should start out the process by establishing their goals for the summer. How much money do they want to make? What experience are they trying to gain? Be specific. Not sure? Sit down and brainstorm with them on things they might be interested in doing, what their skill sets are, and how much money they need to make based on their needs and wants.

• Create a resume – It doesn’t matter if your teen has work experience or not. A good resume distinguishes your teen from the masses and there are many things, such as school, extracurricular and volunteer activities they can highlight. Here are some tips for writing a teen resume.

• Get some references - Past employers make the best references, but if this is your teen’s first time looking for a job, never fret. Teachers, coaches, pastors and other adult leaders make great references as well.  Have three references ready in case an employer asks.

• Begin researching and networking - Remember, it’s not about what you know, but who you know. Networking is the most important part of any job search. With goals and resume in hand, start talking to family, friends, and acquaintances about opportunities that align with their summer goals. The key is, let everyone know they are looking for a job.
  • Identify what industries are growing as the greatest opportunities lay here. According to Forbes, healthcare, technology and industrial jobs are three of the hottest job sectors in 2012.
  • The people your teen is talking to about references are a great start in networking and getting leads and tips.
  • Cast a wide net. Your teen should utilize their social networks (Facebook, Twitter) and if they don’t have a LinkedIn account, now is a great time to create one.  Have them join LinkedIn student groups that can offer great tips and advice toward landing jobs.
  • Research community job boards, Monster.com, and other job posting websites for entry level work.  Craigslist is another resource to find many virtual jobs that can be done at home, such as telemarketing, graphic design, and social media work.
  • Walk the communities. Many times retailers and restaurants just put up help wanted signs in their windows. If there are particular businesses your teen is interested in, have them stop in and talk with the manager or owner even if they are not hiring at this time. This could easily open a door and place your teen first in line when an opportunity does arise.

• Nailing the interview – Congratulations! Your teen has just landed an interview. Now comes the time to really shine and sell themselves. But they have only one chance to impress.
  • Practice makes perfect.  Make sure your teen is comfortable during the interview process by doing some mock interviews with you and other adults. This will help build confidence.
  • It’s better to be overdressed than underdressed. Appearance is the first impression made and yes, employers do judge a book by its cover.
  • To be early is to be on time, to be on time is to be late and to be late is unforgivable. That’s what my mother taught me. Make sure to arrive early to the interview and have your resume and references in hand and finally…
  • Give a firm handshake, make direct eye contact and most importantly, be confident and enthusiastic about the position.

Following these tips will help make your teen stand out and ensure the greatest odds of landing a good summer job.  If jobs are very scarce in your area, help your teen create a job of their own. This country was built on entrepreneurism and creating our own opportunities. Whether its babysitting, mowing lawns or doing computer work for neighbors, the opportunities abound for those willing to take a chance. Here are some other ideas. Good job hunting!

Copyright 5 Tips for Teens Looking for a Summer Job © 2012.  All rights reserved

• My 11 year old son is making $150 per month on his own.
• My daughter’s fledgling online business already has 500 customers and she’s turning 13 tomorrow.
• My kids are working together after school on a new service they created, and at this rate, they’ll earn enough money to put themselves through college.

If so, you might want to take a look at a book called Kidpreneurs by Adam and Matthew Toren.  I was offered the opportunity to review this book and jumped at the chance.  Adam and Matthew are serial entrepreneurs and have boiled the subject of kids starting businesses down into 60 short and enjoyable pages.   The look and feel is like that of a fun, colorful scrapbook rather than boring business book.  I would definitely recommend it for parents with kids between the ages of 7 and 14.

The book covers subjects such as start-up costs, pricing, customer service, advertising, and writing a one-page business plan.  It also covers topics such as ethics and giving back, which is great to see in a book like this.  The illustrations are perfect for the target age range.  I’m also impressed with the emphasis on planning.  The book even makes the point that sometimes grown-ups end up doing something different than they thought they would because they didn’t have a plan to help them make their dreams become a reality.  Kidpreneurs motto is “It’s Never too Early!”  The sooner you start learning about business the better.

Some people view businesspeople and entrepreneurs as being all about money.  Money is important, but it’s certainly not the most important thing in life.  Learning and gaining experience are more important.   Being an entrepreneur is a constant learning experience that is guaranteed to enrich anyone who has the will to pursue it. The tween and teen years are perfect to start learning about entrepreneurism.

The overall message for kids is simple: find what you love and build a business around it.  That’s great advice for adults too. That’s what we did with FamilyMint!  By the way, while their businesses are small and simple, kids can use FamilyMint to track cash coming in (income) and cash going out (expenses).

I asked my 12 year old son to read Kidpreneurs and he ended up with two pages of handwritten notes for future reference.  I have never seen him do this before on his own initiative! And although we’ve talked about entrepreneurship and what his Dad does, he said he didn’t really understand what an entrepreneur really did until he read this book.  I’m so glad he read it, because now I know he’s thinking about the world of possibilies for his own future in a bigger way.  He’s already thinking about what he likes to do and how he might make a few dollars over the summer.  Woohoo!!

I encourage you to pick up a copy and let your kids get inspired.  www.kidpreneurs.org

Annually the National Financial Educators Council (NFEC) presents its Best Practices in Financial Education Awards to recognize individuals and organizations that provide personal finance products or services aligned with the NFEC mission, educational philosophy, sustainable business model, and dedication to raising awareness about the financial literacy movement. This year’s award was presented to the FamilyMint kids financial education software, recognizing FamilyMint’s contribution in the Software Category.

Organizations that are chosen to receive the Best Practices Award share common mission statements with the National Financial Educators Council objective to create a world where people are informed and able to make qualified financial decisions that improve their lives while benefiting communities around the world.

“The FamilyMint software program stood out among others because it provides hands-on learning and opens up communication between parents and kids about money matters,” states Vince Shorb, CMO of the NFEC. “We also liked that the FamilyMint program was designed to facilitate collaboration between financial planners, schools, financial institutions, and others who want to improve the financial well-being of their communities.”

“FamilyMint is highly honored to receive the Best Practices in Financial Education Award from the National Financial Educators Council,” said Bob Masterson, FamilyMint President. According to a survey by The Hartford Financial Services Group, nearly 3 out of every 4 parents acknowledge being their children’s primary source of personal finance education, and almost half admit to needing more guidance on how best to teach their children the skills to become successful, financially responsible adults. FamilyMint exists to help parents play this vital role within their family structures.

FamilyMint has been recognized for offering the easiest way to provide a financial literacy for kids system that shows them how to manage their money and achieve their goals.

The NFEC is a social enterprise organization whose stated mission is to improve financial capability among the world’s citizens. Through collaborative efforts with leaders in the financial education field, the NFEC aims to increase access to products and services that represent best practices in financial education.

By Bob Masterson

Once upon a time there lived a little girl who was loved so dearly, and it could be seen very clearly.  Her name was Little Red Riding Hood, a girl so sweet and so good.  Her parents gave her all the best, but did they truly prepare her for her first big test?  She was popular and had many a friend, but unfortunately did not learn how to wisely save and spend.

Red, as she was affectionately known, was now all grown and heading off to college to gain more knowledge. Red’s parents felt quite confident and clear that she was ready to face her future without any fear. “Now study hard, be sure to write, and most of all don’t stay out late at night,” were her parents farewell words.  After a farewell hug and kiss, Red set out filled with confidence and bliss.

Unbeknownst to Red, laying in wait just ahead, was a conniving wolf needing to be fed.  Neither cookies nor treats were this wolf’s delight, but financial ignorance he fed on all day and all night.

Red spots the wolf who looks harmless enough and he sees a prey that he could easily bluff. “Where are you off to little girl in red?” asked the wolf with dollars dancing in his head.

Now since Red was never taught about credit or debt, the wolf didn’t seem to be much of a threat.  “I’m off to college,” said Red, “to make new friends and to grow in knowledge.”

“I have something here to start off your college career,” said the wolf slyly. “And I’m sure you’ll agree it will make your life easy and oh, so carefree. When you are out and about, using cash can be hard, so be sure to keep with you this handy credit card. There are so many things you will need and surely want,” said the wolf all nonchalant.

“Are you sure it is okay, are you sure it is safe?” asked Red with an inquisitive face.

“For sure, for sure, it’s better than cash and you don’t have to pay it back in a flash.  If that doesn’t entice you maybe this will, sign up today and I’ll throw in a grill – not a penny is due until your next bill.”

“What’s the big deal, I’ve seen my parents use theirs to buy everything from a TV to a fast food meal,” Red thought to herself.  By signing on the line, the card and grill were hers to enjoy, and the promise of freedom was now hers to employ.

Now off to college she went with the card in her hand, how she would use it, she didn’t yet have a plan.  But after the first swipe, the easier it got, and soon everything was charged with very little thought.

“My, that’s a fine looking dress.  Of course I shouldn’t expect to wear anything less.”

“A few dozen pizzas for the dorm, not to worry, I’ve got it covered, just make sure to hurry.”

“A new TV and stereo would be so much fun after our homework is finished and done.”

“A trip to Mexico with some friends…oh what could be nicer than starting new trends?”

All of a sudden and to her surprise, the bill came due, and oh what a debt Red grew.  “I charged a little here and I charged a little there, but I never saw the signs that said buyer beware.”  With little cash on hand and such a great sum the best she could do was pay the bare minimum.  But there was something else Red did not know: by paying the minimum, the debt would continue to grow.  ”How could this happen, how could this be, interest is accruing and what is this late fee?”

“I was foolish and unwise to buy into those Wolf’s lies.  Spending money I did not have to buy things I did not need only dug me a hole of which I paid no heed.  Now instead of life that is easy and carefree, I am buried in debt because of my shopping spree.”

The moral of the story is simple you see.  Debt is a burden and a place you don’t want to be.  Be money-smart, learn to wisely spend and save, and when you grow up you won’t become money’s slave.

Copyright Little Red Riding Hood and the Big Bad Debt © 2012.  All rights reserved

The “Lessons From” series are bite-sized summaries of books about financial literacy for parents raising money-smart kids.

With Summary #6, we finish up the series on a book called Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki, Sharon L. Lechter.  (Link to Summary #5)

In this last entry of the series, we cover methods to overcome obstacles, cynicism, laziness, and bad habits, as well as concrete ideas to getting started.

Chapter 7  - OVERCOMING OBSTACLES

“The primary difference between a rich person and a poor person is how they manage fear.”  Rich people lose money.  They take risks, make investments, and sometimes they lose.  However, other times those investments pay off, and more than make up for the losses.  Many poor people never lose money.  They are too afraid to take risks with investing, so they don’t lose, but they don’t gain either.  Winners get inspired by failure to learn and do better.

The poor and middle class “don’t win financially because the pain of losing money is far greater than the joy of being rich.” They “play life too safe and too small. They buy big houses and big cars, but not big investments. The main reason that over 90 percent of the American public struggles financially is because they play not to lose. They don’t play to win.”

“If you have any desire to be rich, you must focus. Do not do what poor and middle-class people do: put their few eggs in many baskets. Put a lot of your eggs in a few baskets and focus. Follow One Course Until Successful.”

“Just do what Colonel Sanders did. At the age of 66, he lost his business and began to live on his Social Security check. It wasn’t enough. He went around the country selling his recipe for fried chicken. He was turned down 1,009 times before someone said yes.”  Now that’s the power of focus!

Following this advice also helps to overcome cynicism, laziness, and bad habits that keep you from making money:

• “… a savvy investor knows that the seemingly worst of times is actually the best of times to make money. When everyone else is too afraid to act, they pull the trigger and are rewarded.”
• “Cynics criticize, and winners analyze” was another of his favorite sayings. Rich dad explained that criticism blinded while analysis opened eyes. Analysis allowed winners to see that critics were blind, and to see opportunities that everyone else missed. And finding what people miss is key to any success.
• The most common form of laziness today is laziness by staying busy.  Keeping busy keeps you from feeling guilty about not focusing on building wealth.
• One key to building wealth is paying yourself first.  “After paying myself, the pressure to pay my taxes and the other creditors is so great that it forces me to seek other forms of income. The pressure to pay becomes my motivation. I’ve worked extra jobs, started other companies, traded in the stock market, anything just to make sure those guys don’t start yelling at me. That pressure made me work harder, forced me to think, and all in all, made me smarter and more active when it comes to money. If I had paid myself last, I would have felt no pressure, but I’d be broke.”

Chapter 8 – GETTING STARTED

“It really is easy to find great deals. I promise you that. It’s just like riding a bike.”  The hard part is learning to ride the bike in the first place.  You fall down, you get hurt, sometimes you think you might never get it, but once you do, it becomes “easy”.  Learning about money and investing works the same way.  Our culture has “failed to teach us how to have money work for us.”  However, let’s not let that stop us!  We can overcome with the self discipline to invest in our own education:

• “Personal self-discipline is the number-one delineating factor between the rich, the poor, and the middle class.”
• “Invest first in education. …Each of us has the choice of what we put in our brain once we’re old enough. You can watch TV, read golf magazines, or go to ceramics class or a class on financial planning. You choose.”
• “You become what you study.  In other words, be careful what you learn, because your mind is so powerful that you become what you put in your head.  When it comes to money, the masses generally have one basic formula they learned in school and it’s this: Work for money.  In today’s fast-changing world, it’s not so much what you know anymore that counts, because often what you know is old. It is how fast you learn. That skill is priceless”
• “Choose friends carefully: the power of association.  I’ve noticed that my friends with money talk about money. They don’t do it to brag. They’re interested in the subject. So I learn from them, and they learn from me. I also learn from my friends who struggle financially. I find out what not to do.”
• “Poor people have poor habits. A common bad habit is innocently called “dipping into savings.” The rich know that savings are only used to create more money, not to pay bills.”
• “Teach and you shall receive: the power of giving. If you want to learn about money, teach it to someone else.”

Chapter 9 – STILL WANT MORE? HERE ARE SOME TO DO’S

• “Stop doing what you’re doing. In other words, take a break and assess what is working and what is not working.
• Look for new ideas. For new investing ideas, I go to bookstores and search for books on different and unique subjects. I call them formulas. I buy how-to books on formulas I know nothing about.
• Find someone who has done what you want to do. Take them to lunch and ask them for tips and tricks of the trade.
• Take classes, read, and attend seminars.
• Make lots of offers, even if they are very low. Someone might say yes.”

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Now dive right in yourself: Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

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P.S. This book summary has been completely rewritten and published on the Kindle platform. If you’d like to have this summary available at any time on your Kindle app or device, it’s available here.

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