How and Why to Give Kids an Allowance

coins-in-handThe days of paper routes are over, yet the market is flooded with gadgets and games kids insist they must have in order to simply exist. It’s a tough parenting world today. We want to teach our kids responsibility, work ethic and long term gratification. These values can be modeled, and they can also be instilled in the younger child. Once your child is eight or nine years old, it’s time to start.

Ground Rules

One of the ways to instill these values is through having your child earn an allowance. It’s a wide range here, given the huge maturity differences between eight year olds and fifteen year olds. Some basic pointers on establishing the ground rules and expectations for an allowance follow.

  • Select what works for your family and good luck!
  • Work together with your child to establish the the rules and expectations.
  • Decide on what chores will need to be completed and what the payment will be.
  • Will this happen on a monthly basis or weekly?
  • Can the child accomplish part of the list and receive partial payment?

The more you engage your child in this process, the greater sense of ownership they’ll have. If they suggest they don’t want to work for an allowance, that’s fine too. Just let them know they won’t be receiving any discretionary spending money each week. That may eventually begin to burn!

Quality control

Will you ensure that the chores are completed to the best of our child’s ability in a timely manner or will you ask your child to check behind himself? Remember, this is a learning process and won’t necessarily go smoothly out of the gate. Work together to look at the final product. This will reinforce the value of responsibility and pride in one’s work. It’s a slow lesson to learn and trait to develop, but you will be giving them a gift that will last longer than any of the latest must have gadgets on the market.

Encourage your child to set short and long term goals with the allowance he receives. Setting aside a portion of the allowance each week might result in a trip to the Disney Store for a favorite toy or figurine. A short term reward might be a trip to the ice cream shop. Encourage, empower and reward your child throughout the process. Establishing the foundations for an allowance will help develop the values of responsibility, work ethic and long term gratification that are so critical in all aspects of life. Good luck!

“Can’t Wait Willow” and “Must Have Marvin”

by Christy Ziglar

These books by the niece of Zig Ziglar are fantastic! They have so many elements children love, including adorable illustrations. In both of these stories, the main characters Willow and Marvin are following their child desires for immediate gratification only to fall disappointed in the end because they didn’t hold out for what they really wanted. They teach a great lesson to children and make them think about the impulses the characters are making with a star that can be found on every page showing an emotion based on the character’s decisions. All families should add these books to their libraries!

Teaching Kids About Money

kid moneyHere are 10 some smart things to know when teaching your kids about money.

  1. Start early in life and modify to be age appropriate. Get young children (ages 3-6) involved in the grocery shopping and have them choose which items to buy based on a pre-set amount.  As they get older (ages 7-13), concepts such as comparison shopping, growing your money through saving and investing, and borrowing money become important.

  1. Walk your Talk.  Impulsive buying and racking up credit card debt are behaviors that don’t go unnoticed by your children.  Don’t shy away from explaining to your kids where all that money in a paycheck goes. It’s invaluable for them to learn that just because something looks good, it doesn’t mean you buy it.

  1. Don’t underestimate the allowance.  Once your child starts school, introducing an allowance is a good idea.  Treat their allowance as if it were their own paycheck and set aside 20-30% to savings.   As they get older, you can start to allocate a portion of their allowance to pay for something that they really enjoy. They’ll learn about budgeting, savings and also comparison-shopping to find the best deal.

  1. Give them the power of earning money on their own.  In addition to an allowance, encourage your child to earn money through projects or help them to brainstorm ways to make money. Once they start to earn money through their own hard work and effort, their interest in learning about money management also increases.

  1. Get your kids involved in budgeting.  It’s helpful to include your children in planning for large family expenditures such as vacations and summer camps. How you came up with the budget number is just as important as what it is – especially if it was derived from a monthly savings that you’ve set aside each month.

  1. Encourage them to participate in saving or investing their money.  It’s never too early to open a savings account so they can learn the concept of compound interest. Use allowance and earned money as a way to show how their income can be allocated to different buckets: short term spending (candy at the movie), long term savings (new mountain bike), and investment for their future.

  1. Set financial goals to teach savings and borrowing.   Rather than buying the latest product automatically, show your child how to save for these items. Lend them money at a simple interest rate so they learn the concept of time value of money.

  1. Make it a game.  Every kid, no matter the age, likes the challenge of a game.  Make it a family game night and bring out the Monopoly or Life board games.  There are computer games that teach kids the basics of running a business such as Zoo Tycoon and Sim Coaster.

  1. Start using online financial tools now.  If your child uses a checking or credit card account, there’s no reason why they shouldn’t also track their spending and savings using the latest tools. New services like MoneyStream uses a simple calendar based system to show where money is going and analyzes past spending to predict future inflows and outflows.  If your child is in college you can easily monitor the checking balance and know when to make a transfer (or give them a refresher course on managing their money).

  1. Check out more resources for teaching kids.  There are many resources that provide guidance for teaching kids good money management skills.  Moneyasyougrow.org, Warren Buffet’s SMsCKids.com (Secret Millionaire’s Club) and, Independent Means (www.independentmeans.com) are just a few to check out.

Christy Ross, the Chief Marketing Officer of MoneyStream and a mother of 3 boys, has built a long career in the financial industry. When she’s not balancing the demands of 3 busy boys (ages 6, 10, and 13), she’s helping financial technology start-ups grow. While sometimes missing the mark on walking the talk (don’t we all), she strives to help her kids become good stewards of their money and ultimately their life.

Top Tips for Mom Inventors

by Tamara Monosoff

What many multi-tasking moms don’t realize is that they already possess the necessary skills to become successful entrepreneurs.  These essential skills are practiced and strengthened on a daily basis such as; coming up with creative solutions to everyday problems, extraordinary time management (getting kids to school, activities, doctor’s appointments, grocery shopping, preparing meals), stamina (staying up all night when the stomach flu hits the household), all while living within a budget.  In fact, these skills are directly transferrable to launching and running a successful business.  When I hear a mother say, “I’m just a mom, I can’t run a business,” nothing could be further from the truth. And, becoming an entrepreneur has benefits such as a flexible schedule and an opportunity to contribute to the family income.

For the past ten years, I have seen thousands of people transform that initial idea into creative, money-generating new products.  And, with the resurgent economy and awesome new resources available for developing, manufacturing, funding, video marketing, selling and distributing products, the opportunity for inventive product entrepreneurs has never been better.

Every entrepreneur’s journey is unique, but like any new endeavor, the most important steps are the first ones.

Below are seven tips to get you started on the right path:

  1. Treat Your Product Idea as a Business from the Start. There is no true short-cut. With an open mind, analyze and understand the design and production costs, market size, selling price, profit potential, and competition BEFORE you spend money bringing your product to market.

  2. To Patent or NOT to Patent? A patent can be a useful tool but it is not a requirement and sometimes a waste of precious resources. Consider taking advantage of a Provisional Patent Application (PPA) first. It is a placeholder that will buy you 12 months of time before you have to officially file a utility patent.

  3. Make it Simple. Many new product ideas include flashy features from electronics to excessive bells and whistles that drive up production costs and the retail price. Creating high-quality products with fewer features–but priced right — can mean more sales and money in your pocket.

  4. Raise Smart Money. Use crowd-funding, microloans, credit lines, and new online options that fit your business. There has never been a better time to fund your business.

  5. Bring Your Product to Life with a Prototype. Start with something basic that will be refined over time. It does not need to be expensive or fancy.

  6. Be Cautious of “Opportunities.” Be careful to scrutinize companies that offer to market or license your product with sweet deals that sound too good to be true. Use the same good practices you would use to select a contractor, plumber, or new nanny.

  7. Celebrate Your Successes…Large and Small. Recognize setbacks for what they are an unavoidable — and sometimes the most valuable — part of the journey. This is an opportunity to build a business and life that you LOVE.

There are many steps along this journey but with the abundance of new resources available you can take your idea and run.  As Julie Martin-Allen, Senior Director of Showcase Events for Sam’s Club said in the foreword of my new book, “My final advice to those readers who aspire to see their products on the shelves of the nation’s top retailers; be courageous and go for it!”

For more resources on funding, manufacturing, publicity and managing your business check out The Mom Inventors Handbook, How to Turn Your Great Idea into the Next Big Thing, Revised and Expanded 2nd Ed (second edition), released on April 1, 2014.

 

Tamara Monosoff is an award-winning inventor, educator, media contributor, speaker and author of six bestselling books; including the new interactive version of The Mom Inventors Handbook, How to Turn Your Great Idea into the Next Big Thing, Revised and Expanded 2nd Ed(second edition). If you need help getting started, Tamara offers Power Mentoring Programs that will rocket you to success! Visit: www.TamaraMonosoff.com.

The Best Places to Sell Kids Stuff Online

By Kathy Schultz

baby-stuffEvery parent remembers the excitement of expecting their first child and the literally carloads of items needed to prepare for the big day. Cribs, baby monitors, changing tables, car seats, high chairs, clothes, linens, toys, nursery décor, swings and a host of other necessities filled the home and made baby’s first year or more much easier. But all too soon they’re outgrown or no longer needed, and often while they’re still in excellent shape.

Many families are able to hand down items or donate them to a charity. However, a lot of families really need to get a return on their investment to help afford the necessities needed in the next stage of childhood.

While consignment shops and garage sales are one way to earn back some of the money we’ve spent, in most cases these methods only get us a minimal return on our investment. For items that have barely been used and are still in great condition, why settle for pennies on the dollar? Savvy parents have learned one of the best ways make the most money on kids’ items is to sell them online.

There are many sites on the Internet that help you to sell gently used items. A little research will uncover where you can maximize your return on your dollar. Here are a few I recommend:

CraigsList

Selling on CraigsList is a great way to avoid shipping costs and seller fees on larger, high ticket items or very common items that fill consignment shops. With a presence in over 700 “cities” in 70 countries, it’s likely this site will help you connect with a buyer in your hometown. Criagslist makes it easy to upload items yourself, and users say that depending on the product, they can get as much as 50% of the item’s original retail price. On big ticket items like furniture and electronics, that can make a big difference. Be sure to include photos and use those keywords to maximize your chances of a sale. www.craigslist.org

Lolly Daisy

So what about those cute items that are personalized or monogrammed that, while still in excellent shape, are outgrown physically or emotionally? This is where LollyDaisy.com shines. New to the scene this year, Lolly Daisy connects you with buyers of new and gently used personalized items (clothing, backpacks, step stools, bedding, dishware, accessories, furniture, toys, art, etc.). On LollyDaisy.com, buyers can search by name or initials to find a match and even sign up to receive email alerts when you place a new listing on the site that matches the name and initials they seek. This means if someone is waiting to buy something with your child’s name or initials, they’ll know the moment you list. www.lollydaisy.com

Just Between Friends

If you are looking to sell off items like toys and baby care items in bulk, check out Just Between Friends. This company hosts large consignment sales events all over the country on specific dates throughout the year. Sellers sign up online, find the location and date of the event in their town, use online information to prepare and price items, then drop off items at the sale. A couple weeks after the event, your check shows up in the mail for the items that were sold, and they’ll even take unsold items to charity for you. This site is great for folks with little time to do the selling. www.jbfsale.com

ThredUP

ThredUP focuses on helping you sell kids and women’s clothing. A great alternative if you don’t have much time, this company will send you a self-addressed pre-paid bag for you to fill with the gently used clothes your kids have outgrown. Just drop off the bag off at your nearest UPS or FedEx location. You can choose to have them sell the items outright, or consign them. ThredUp will then upload and sell your items online for you. Once an item sells the company will pay you up to 40 percent (upfront payment) or 80 percent (consignment payment) of the sale price. www.thredup.com

Time is precious when raising children. Why waste it while trying to find the right buyers for kids’ items? Let these companies do the work for you and maximize the return on your investment. This will give you the time and money to get the next round of necessities for your kids. And maybe even a new pair of shoes for you.

Frugality – Teach Your Children Well

by Claire K. Levison

saleMy dad is a master of frugality.  His brother often remarks that it’s “the family way.”  As a kid, I thought my dad was cheap but as it turns out, he’s just smart.  He knows what’s important to him and what isn’t.  Those priorities are reflected in the way he spends his money.  The car he had when I was in high school was the base model.  It didn’t even have a radio.  When I would ask him why, he would say, “I don’t need a radio in my car.”  When Dad would take me to a fast food restaurant (a fairly rare occasion), he was never willing to buy drinks.  “Those drinks are so over-priced.  We can get a drink at home,” he would tell me.  As a child, I didn’t understand it.  It drove me nuts.  Now as an adult, I can see that where it drove me was down a path of financial success.

As a mother, I’ve vowed to teach my children to be frugal too.  My fourteen-year-old hasn’t fully embraced the concept yet.  She does enjoy seeing her money go further when she buys things that are on sale, but she’s still fairly enamored with high dollar items.  And I’m not always as good as my dad was when it comes to holding firm.  I can’t remember my dad ever giving in to those fast food sodas.  Although I’m sure he must have at some point during my eighteen years of childhood.

And yes, as time goes on in our society, it seems that ante is continually being upped.  Instead of a soda, my daughter wants UGGs. When I bought her first pair, I remember thinking, “I can never tell my dad how much I just paid for these boots.  He will think I have completely lost my mind.”  Although I was buying an expensive pair of shoes for my daughter, frugality was still churning inside me.  When I looked at the price tag of those boots, it set off an alarm in my head.  Even as a grown woman, I was asking myself what my dad would think of that purchase.  It made me feel uncomfortable.  It made me think, “This should be a rare occasion.  This should be a special treat.”

I could tell you that you should never buy your kids a pair of UGGs or some similar name brand item, but I’m not going to. I think as parents we can find a balance between providing a lifestyle that allows our children some flexibility in a world that puts such a high value on material things and providing a lifestyle that shows our children that frugality will ultimately be a roadmap for financial success.

I expect, like it is with so many other lessons we try to teach our children when they’re growing up, that it may not be until my daughter is out on her own that the light bulb will really go off in her head.  I picture her being debt-free, having a solid savings account, and investing for retirement and other future needs she’ll have.  I picture her standing in the midst of her firm financial foundation thinking to herself, “Wow, I guess Mom really did know what she was talking about when it came to all that frugal stuff.  She taught me well.”  I don’t think this is too much to hope for.

But for now, my sweet daughter just rolls her eyes when I drag her to the clearance section at the back of a store.  I don’t go shopping that often but when I do, I always hit the clearance racks first.  Maybe it’s my version of a radio-less car or a soda-less trip to McDonald’s.  Dad taught me well.  Teach your children well too.

Clare K. Levison is a certified public accountant and author of Frugal Isn’t Cheap:  Spend, Less, Save More, and Live Better.  She is a national financial literacy spokesperson for the American Institute of Certified Public Accountants (AICPA) and has appeared on major radio and television networks across the country discussing various personal finance topics.   She has served as a member of the Virginia Society of Certified Public Accountants (VSCPA) Board of Directors and was named one of the 2010 Top Five CPAs Under Thirty-Five by the VSCPA. Levison has more than a decade of corporate accounting experience and is also an active volunteer, serving as PTA president, Girl Scout leader, and Sunday school teacher.  She lives in Blacksburg, Virginia with her husband and two daughters.

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Tips For Children About the Basics of Money

by Patrick Bet-David

kids-moneyIt’s not that kids shouldn’t have fun, but today’s distractions are taking too much time from more important things like learning about money. Whether kids are going to the movies, shopping for clothes or music, buying a car, trying to help support their parents or even working a couple of jobs to pay for college, money is and always will be an important part of our lives.

 

Use these tips for children to learn about the basics of money:

 

Start a habit of saving money – Whether someone gives you five bucks or you just got your first paycheck, whatever money you are making, try to save at least 10% in an account that you try hard not to touch.

 

Start a budget – Open up your own savings account and learn the basics of having a bank account. Start a budget and learn to manage it.

 

Shop around – It’s tempting to see something we like and buy it on the spot, and that’s called instant gratification. But if you go online or wait a couple of months for a sale, that same item may cost less which saves you money.

 

Avoid credit cards at all costs – If you plan on buying an awesome car, buying a house one day, or being taken seriously in any business venture, your credit score will play a huge role in how much financial companies will trust your spending habits.

 

Focus on earning – Saving is very important, but if you’re not earning money you won’t have any to save. Start thinking like an entrepreneur at an early age. Open a lemonade stand, car washing business or pet walking service. The key is to offer a service that people are willing to pay for.

 

Expect more – People usually make the amount of money they feel they are worth, and most people sell themselves short. Teach children to have a high self-image, and they will create a world for themselves that meets that self-image.

 

Download an app on your phone – There are so many apps for managing your budget and savings on phones nowadays that you can track your money on the go. Get in the habit of keeping tabs on your spending habits.  Kids will have more fun doing this on their phones and tablets.

 

Bet-David says there is a difference between just saving money and building an awesome financial foundation, but it’s a good idea to start with the basics.