Money Savvy Kids, Money Savvy Adults

The following guest post is from Debbie Dragon. Read more about Debbie after the article.

It has been said in the news over the last few years that Americans are not saving enough money. Many people blame the lack of savings finesse on their inability to make ends meet, let alone put extra cash away, but the reality is that most people never actually learned how to save.

how to teach kids money skills by GoodNCrazy

It is for this reason that teaching kids what it means to set and maintain savings goals is more important now than ever.

Getting Started

For some parents, it is the ‘getting started’ part of the equation that is the most difficult to conquer. They may feel their kids are too old or too young to learn the importance of basic personal finance lessons.

The reality is no one is ever too old or too young to learn money lessons. In fact, kids of any age have the ability to learn and effectively incorporate good money habits into their lives.

Establishing Allowances

Even toddlers can have a hand in keeping the household running smoothly. While some are quick to argue the effectiveness of financially rewarding kids for doing household chores, there are certainly lessons to be learned. Every parent can establish their own system for financial compensation based on work done at home.

If your child is old enough to earn cash of their own accord, that income can also be an essential tool for learning about money priorities.

Setting Goals

Once it has been decided among family members how allowances are earned or how much income is generated from a teenager’s job, it is important for parents to have a one-on-one conversation about basic money matters. Even younger children have ideas of what they would like to have or purchase with their money.

For many, it is toys and candy. Older kids may already be interested in saving for long-term goals in addition to the more current desires like a vehicle, new clothing, or entertainment with friends.

Help your child make a list of the things they might like to save for and try not to dictate their personal decisions with your own parental insight. Let them have the majority of control of their ideas so they will be more motivated to start saving.

Discussing Deposit Requirements

Parents can teach kids the basic workings of savings accounts. Depending on age appropriateness, the discussion can be as simple as describing how they get to go to the bank and write their deposits in their savings register. Older kids can benefit from learning about how interest accrues over time.

This is also the time to discuss the amount of money kids should strive to save from a job or from their allowance through regular deposits. For example, 10% of income is the norm for many adults to tuck away into savings from each paycheck based on the ‘pay yourself first’ theory of personal finances.

By teaching this lesson early, parents are essentially setting their children up for successful financial freedom in the future. By teaching kids to always account for 10% going into the bank on a consistent basis, they will likely carry that lesson into adulthood without a second thought.

Let older kids calculate what 10% means in cash terms and help the younger kids develop a list of percentage amounts based on dollar increments. For instance, create a kid-friendly list that shows how much of a deposit is expected based on the dollar amount they receive.

Younger kids can look at the list and easily be able to report back that $4 in allowance means 40 cents must be put into a savings envelope. Since little kids likely earn less in a week than older ones, let them decorate a savings envelop of their own where they can put their change in until they have a sufficient amount for a bank deposit.

Going to the Bank

For kids of all ages, it can be a big event to take a trip to the bank for the purpose of establishing a savings account all their own. It is a big deal to feel the sense of accomplishment in setting goals. While parents have to fill out and sign the majority of paperwork, kids can still enjoy a walk-through of how things work at the bank. They can also be put in charge of collecting their bank register and filling out their first deposit slip.

Older kids may be interested in obtaining a checking account as well, so they have access to some money not going into savings or can start paying some of their own bills as they get older – perhaps their car insurance. All of this can be turned into effective money lessons that will last a lifetime.

Sticking to Your Guns

As a parent, it can be hard to see your child go without something they want. Once you have helped them to establish their rules and savings goals, it is important for you to stick to your guns and not give in when they beg for money to reach their goal.

It is not uncommon for kids to slack off in their household duties therefore failing in their attempts to save for a specific want. If you give in and provide money they didn’t work for, you are essentially reversing the financial lessons you are trying to teach.

When your child heads to the toy store or the new clothing store at the mall and doesn’t have enough cash to cover what they want, they will soon begin to understand the importance of self-reliance and a commitment to budgeting, even if they pretend to think you are the meanest mom or dad on the planet.

There is little chance in their adult life that someone will always come to the rescue financially, so setting kids straight at a young age is one of the best financial lessons a parent can provide.

Debbie Dragon is a freelance writer for ComplexSearch, an online bank rate tracker. Find high interest savings accounts and money market accounts with ComplexSearch.com.”

15 Things Our Grandparents Lived Without (and We Probably Could, Too)

My grandfather grew up in a rural setting during the Great Depression, and for much of his young life had no running water or electricity. He often joked that they really did have running water–he ran to the well with a bucket and ran back.  During particularly lean summer months, my grandfather and his brothers and sisters often went barefoot. He often joked that he doesn’t know why people refer to those times as “the good ol’ days,” because there wasn’t much good about them.

Third Avenue looking north from Cherry Street, 1930 by Seattle Municipal Archives on Flickr

Of course, I cherish these stories and the time spent with my grandparents because they made me the “frugal dad” I am today. When I find myself drooling over a new gadget I think back to stories of my great-grandmother searching the cupboards for a missing dime that meant a can of soup for her kids’ dinner. It puts life in perspective to remember that people did manage to get by without today’s modern conveniences.

Don’t get me wrong – this is not an indictment of today’s modern conveniences, because frankly, many of them make life much more enjoyable. However, we should be reminded that many of these things are luxuries, not necessities, even though media and peer pressure would have us believe otherwise.

15 Things Our Grandparents Lived Without (and We Probably Could, Too)

1. GPS Devices.For me, the jury is still out on GPS devices for your car. I hear about more people arriving late because they took the “GPS directions” than I hear success stories. I don’t know what’s wrong with a road atlas – I just bought a new one from Sams Club for a few dollars. Besides, some of the best discoveries are found when you are lost.

2. Tanning Bed Salons. Direct quote from my grandfather: “Why pay hard-earned money to cook your skin when the good Lord shines a sun over your head that does the same for free?” 

3. Cell Phones. Yes, people can live without a cell phone. In fact, many still do, as hard as that is to imagine. If you are concerned with safety while traveling, consider a prepaid phone and keep it charged. Heck, even a cell phone without a calling plan, but a charged battery, can call 911 in an emergency. While I do consider cell phones more of a utility these days, I consider data plans and all the bells and whistles a luxury. Disclosure: I own a DroidX, and curse the bill every time it hits the mailbox!

4. Microwaves. I’ve yet to taste anything out of a microwave that tastes as good or better than stove-top or grilled. Still, it’s a time saver, and since we all have so little of it these days I suppose it helps.

5. Credit Cards/Debit Cards. The concept of borrowing has been around for centuries, but it has only evolved into plastic over the last century. Speaking of plastic, my grandfather didn’t use an ATM card until he was in his 70?s, instead he always went inside the bank, walked up to the teller, and did business ”eye-to-eye.” They knew him by name and were always happy to help with customer service issues he ran across over the 40 years he banked with this particular bank.

6. Electronic Book Readers (Kindle). Why spend money on something with a screen the size of a book when you could simply…read a book. They even let you borrow them for a couple weeks at libraries for free. Yes, I know toys like the Kindle do other stuff, but its primary role is an electronic book reader. Disclosure: I purchased a Kindle in the hopes it would make me read more. Truthfully, it did not, and do miss the smell of an old book. Guess I’ll be re-gifting it.

7. Digital Cable. Even I can remember growing up with only a handful of channels from rabbit ears on top of the television. My grandfather could remember times before television! Imagine getting all of your news and entertainment from a radio, instead of Fox News and MTV. Speaking of MTV – didn’t that used to stand for “music” television?

8. Health Insurance. If our grandparents got sick, I mean bad sick (not a simple cold or poison ivy), they went to the doct0r and paid for their services. The first “health insurance” plans only covered long hospitalizations or major illnesses, not the routine things we see doctors for today. However, one could certainly make the argument preventative medicine has helped us live longer, healthier lives, and much of that is made more affordable thanks to health insurance plans.

9. Plasma Televisions. Up until 2004 my grandfather owned a decades old, 27-inch floor model console television.  He eventually got rid of it when the picture began to have problems around the edges, and now has a basic 19-inch screen on a shelf. When I asked him about a plasma screen once he said, “There is nothing wrong with the picture on my screen now. Besides, I’ve heard those ‘plasma things’ cost as much as a small car.” Indeed, although it had been a while since he priced a small car!

10. SiriusXM Radio. Why pay to listen to something that is available for free over the airwaves? I did get an XM satellite receiver for my grandfather’s car to use on trips, and he found one feature worth paying for – not having to listen to commercials. Unfortunately, this is not true today as I’ve heard commercials have made their way into satellite programming.

11. Xbox, Playstation and Wii. I remember one Christmas while staying with my grandparents I got an Atari 2600 game system. I hooked it up to the television and ran through games like Combat, Frogger and Pole Position. He thought it was interesting enough, but those little game cartridges sure were expensive! Imagine what he’d think about today’s game prices!

12. Health Clubs. Why pay $30 a month to pick up heavy weights and walk on a belt that runs underneath your feet? You can get the same workout walking outside, lifting things in the garden or filled milk jugs, using your own body weight, etc.

13. Calculators and electronic cash registers. People knew how to perform basic math computations and make change. Enough said.

14. Student Loans. Student loans are also a relatively new (I mean, last 50 years or so) phenomenon. People used to simply pay for college, but that was before the days of college tuition costing an arm and a leg. Which begs the question: Has the federal student loan program encouraged colleges to increase costs by allowing students to spread payments out over a quarter of their lifetimes? Reminds me of what happened to housing prices when more and more previously disqualified people were allowed to borrow big money on mortgages.

15. Disposable Items. Ziploc bags didn’t really hit the market until the 1960s, although some “resealable bags” were around a decade earlier. My grandparents used to put things in containers (jars, dishes, etc.) and store them. When they used the item, they washed the container and reused.

Where’s the Roundups?

It’s been a while since I shared a link collection. Weekends have been busy, and my time outdoors have driven down my time spent reading other blogs. I still accumulate great posts to share, but they don’t come at a pace conducive to a weekly roundup.

Going forward, I plan to simply share links when I have a quality collection, but probably not the same time every week (and probably a smaller amount of links in each post – easier to digest). Perhaps this will work better for both of us.

These 7 Foods are a MASSIVE Waste of Your Money. Makes you stop and think before paying a premium for certain “organic” foods. Put those savings into more “high-value” foods listed in this piece.

You Can Afford It…but Should You? Even if you can afford something, you have to consider what you’re giving up by spending the money. There is always a trade off.

7 Things You Don’t Want to Skimp On. Remember the difference between cheap and being frugal. Cheap people will skimp on anything. Frugal people refuse to skimp on the few things they consider most important.

Emergency Preparedness on a Shoestring. It makes sense to adequately prepare, but supplies sure are expensive. Consider these tips to put together a stockpile without breaking the bank.

10 Hard Truths About Blogging. While I’m not blogging for a living, I am blogging to support a living. And these “hard truths” are worth considering before taking up blogging (or any entrepreneurial endeavor, for that matter).

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Unconventional (Cheap) Advertising Ideas for a Tough Economy

Whether you are a small business owner or a person launching a side hustle to supplement your regular income, effective advertising is key. But when the economy is in a slump and your revenue has flat-lined, it may be tempting to kill your advertising budget.

Windshield Flyer by Joelk75 on Flickr

Don’t Throw the Baby out with the Bathwater

Look for ways to cut costs, but never stop advertising. You can reduce your advertising expenditures without undermining your marketing strategy. Jay Conrad Levinson’s book, Guerrilla Marketing, published way back in 1984, revolutionized marketing for small businesses by focusing on unconventional, personal, sensational, or interactive marketing techniques. Now, more than ever, guerrilla marketing is the smart way to reach your target audience. The good news is that many of these unconventional techniques are also less expensive that traditional advertising channels such as the yellow pages, newspapers, and direct mail.

Attention spans are getting shorter and shorter and consumers no longer feed at the trough of formerly reliable advertising media such as the Sunday newspaper or TV “events” such as the Olympics or Oscars. Nowadays everything is fragmented, granular and personal. So your advertising needs to be too.

That’s actually good news, because as a small business, you are in a much better position than a larger corporation to connect one-on-one with customers. Here are a few ideas advertize your business using a targeted approach:

Create a Website

Every business should have a website. For a few dollars a month in web-hosting fees you can create and maintain a simple website, as long as you don’t plan to do any e-commerce from the site. Hosts like hostgator.com or godaddy.com have entry-level packages with DIY templates and that will have your business online in a matter of hours. Don’t forget to set up an automatic email signature in your email account that includes your new website, so all of your outgoing messages contain your URL and a blurb about your business.

Try Signage

A sign in your yard, in a window, or on your mailbox can be an effective way to advertise your business within your local community. If your business mainly draws clients from your local area, a tasteful sign is an excellent promotional tool. Check for neighborhood association or zoning restrictions before ordering, and make sure the sign you order will hold up to the elements so that it looks neat and professional.

Hit the Road

Have a magnetic sign made for your car to advertise your business. Keep it simple so it can be read even while you are driving down the road. These signs spread the word about your business, even when you are parked at the grocery store. It also helps you start conversations with potential clients you bump into while making the rounds.

Post Flyers

Flyers under the windshield wiper may be annoying, but they are an undeniable way to get your message into your potential customers’ hands–as long as you have permission from the parking lot owner. Rather than papering the entire parking lot, focus on cars that meet the selection criteria for your business. For example, if you have a daycare business, you can place flyers on cars with car seats inside. Note that the U.S. Postal Service prohibits placing of flyers and other materials in or on mailboxes, and any items placed in or on mailboxes are subject to current postal charges. .

Wear Your Ad

Print t-shirts or hats with your business’ name and contact information, and wear them—a lot. Sites like Vistaprint.com and Zazzle.com have decent prices for even small orders of custom merchandise. Wear your ads to school functions, to the gym, to the kids’ soccer match, and don’t be shy about striking up a conversation about your business.

Take Advantage of Free Sites

While no one likes a Facebook contact who relentlessly spams his friends, restrained self-promotion is perfectly acceptable. Create a Facebook page to highlight your business, and post periodic updates about new products or services, promotions or special deals, and recent awards and recognition. It’s a good idea to also post hints and tips for potential customers to create a congenial atmosphere of trust. For example, a CPA can post tax tips at tax time, and a photographer can offer tips to help customers with their own snapshots.

Promote your business on Craigslist or other free classified ads site. A few kooks may reply, but you’ll also generate serious leads for your business. Craigslist can be especially productive if your business client base includes college students (for example moving services or tutoring).

Avoid the Yellow Pages, Unless…

National and Local Yellow Page advertising is expensive, and many marketing experts think the end is near for this musty device. However, if your business if in one of the top-yielding Yellow Page headings, you might want to think twice before yanking your ad. The most frequently searched yellow page headings result in reliable leads and a steady stream of customers. After all, when the plumbing backs up, most of us still let our fingers do the walking to the Plumbers heading.

Go Viral

Whether it’s a silly youtube video, a guy in a gorilla suit on the street corner, or an airplane banner flying overhead with a pitch-perfect message, try some alternative forms of advertising to create buzz about your business. Like the saying goes: any press is good press, so anything that causes a stir and gets people talking about your business will help generate interest and new leads.

This article was written by contributing author Laurel Gray.