Quick Takes: Money Grows... in a bank!

Here are two illustrations re saving money that I photographed while watching a TODAY show segment over a year ago.  They are very impressive even though each has a "but."  I think they are still wonderful.

The first graphic:

This can be used to show kids the value of steady saving and the importance of not touching your savings.  In it a single $1000 investment put in the bank on the day of a child's birth has only grown to $1595.62 in the first five years and only to $6,487.04 by 20 years. BUT, when the child retires at 65 years old the account will have almost half a million dollars [$435,664.43 to be exact!]  The but?...The sad part about this image is that I don't know anyplace you can invest $1000 and get a 9.8% interest rate these days!

The second graphic:

This shows the concept or and power of compounding where money pratically explodes. By compounding the money goes from a simple penny [1¢] on the first day to over 5 million by day 30! [$5,368,709.12   to be exact].
It is a good teaching tool to warn of the dangers of compounding interest on doans and credit cards. At first most kids will not believe the second graphic so be prepared to hand them a calculator and let them try it themselves.

Image credits: photographed from a 2011 TODAY show segment with Jean Chatzky. 

Soapbox: Gather or Scatter??

I am just back from my trip to the west coast and considerably jet-lagged so forgive today's brevity...  I may still be sleeping as you read this    :-)

Today I ask you to consider what do you work to acquire?....

Do you collect money?

  

Do you collect jewels?  

Do you collect silver and gold?






Here is one of my favorite quotes to think about today....

"It's not what you gather but what you scatter that determines the value of your life."


So today at least, be thought-less about what you gather and instead focus on what you scatter.

Scatter happiness.

Scatter joy.

Scatter love.

Quick Takes: Money Management Tool

I recently purchased something for my older teen to use in money management.  I think it is a brilliant idea.*

 Kids today don't want to use checks, they are the debit card generation.  However, they tend not to keep track of what they have spent with their debit card!  I have long been a fan of this company's banks for younger kids like the money-savvy pig. My boys as they got older graduated to  the money-savvy football!  Now these people have come up with a wonderful new tool ... and a cheap one at that!

Called a "CardGuard" it holds a couple of cards and a couple of bucks and fits perfectly in a purse or pocket.  [For example it can hold their student ID, driver's license, debit card, and lunch money!] But the key part is the tracker system that fits in it also.  Similar [but better] than the old check registers, it helps kids track what they have spent with their cards.

Best part?  It is only $7.50 !!

*Remember, I do NOT get paid or encouraged in any way to promote products on this blog.... I ONLY share things that I have personally found and used successfully. If you have something you have tried and would like to recommend, contact me and I can let you do a guest post some Saturday Quick Take.

Image credits:  msgen.com

Parenting Tips: Fighting Materialism

Are you tired of the long wish lists from your children, filled with expensive toys and games and equipment likely totally enough to inspire terror in an already strained pocketbook this season? Try this tip for fighting the materialistic mindset pushed by TV commercials and stores everywhere.  Teach your children to divide their wish list into four equal lists.

1. Fold a piece of paper into a four square.
2. Label each with a category: Buy, Make, Do For, and Do With.
3. List wishes in each category.
4. Challenge each child to keep all the categories equal.
5. Challenge the givers to balance gifts among all four categories.

Younger children will suddenly be able to give gifts on an equal footing with their older siblings.  Suddenly a back rub, or manicure, or a week of clearing the table becomes a respected gift.  The gift of time spent playing a board game together, or going for a walk together, is acknowledged as both something to wish for and as valuable to receive.

Whether for a holiday or birthday or graduation using four square wish lists and gifts has the power to transform attitudes and provide delight in the truer forms of gifts. Money becomes a peripheral, lesser fraction of the gift equation, where I believe it should be, not just in tough economic times, but always.

Image credit:  coolred38.blogspot.com

Want vs Need

     My boys have been earning a little money this summer working for a friend and doing a few odd jobs.  Like many teenagers, they are thrilled to have money in the bank and even more thrilled to have money in their pockets!  Sadly, like most teenagers, that thrill too often results in the disappearance of said money in their pockets or in their banks. "Where did the money go?" I ask.  The answer almost invariably proves they have no clue the difference between want and need. 

      Ah, yet another concept to be modeled and taught by parents.  And, another concept that society's habit seems to be in opposition to what I am trying to teach. When you have money in your pocket and you are thirsty it is tempting to think you need to buy a gatorade or energy drink or soda. The idea of waiting 5 minutes until you are home and can get a glass of water [or even pour a glass from the gatorade in the frig] seems ridiculous.  When the Old Spice man on tv seems to promise all kinds of rewards for using Old Spice it is tough to teach the difference between needing deodorant and wanting Old Spice. And then there is technology.  I now recognize that today's teens may need a cell phone.  However the difference between a cell phone they need and the models they want is huge.

     Philosophically I admit to being occasionally challenged by wants.  I needed a kitchen, but I took a deep breath and splurged big time for the kind of kitchen I have always wanted. And the bottom line is that the makeshift kitchen I had used for 20 years probably would have lasted another 20 [or until I sold the house to someone who would immediately replace it]. So maybe even that I did not truly need. I want a swimming pool desperately [especially in this summer's heat!]. But, even if I would use one, I certainly don't need one. I probably will never have one. That is not too hard for me.  What is more difficult is when I look at the size of my house, the furniture in it, etc. and realize that although I have little new furniture anywhere in my house, I have far more things than many and more than I truly need. And books... I love my shelf after shelf of books.  They are dear to me. But do I really need them? 

     I sometimes wonder if we could not cure most of the homelessness, the poverty, the need for foster homes, etc. if as a nation we could choose better between what we want and what we need.  We could make do with much less and share much more. Space, things, food, love. My cynical friends tell me our economy would completely collapse if people stopped buying what they want and bought only what they need. Maybe it's true. In the meantime I  will go back to trying to explain to my guys why they do not need that new phone with that new gadget, or that new whatever they want today. 

Two points and three cheers for fiscal planning

It is a tradition in my house to go out to dinner as a family on the first day of school. It began when I was teaching school full time and was a single parent with fiver small children. By the time I got my classroom ready, my kids ready , me ready and all of us up, dressed, fed, bags packed, and through the school doors on time, I felt spent ..and the day of teaching had not even begun. I could barely make it through the afternoon of each first day. My exhaustion left me totally uninterested in fixing a nice dinner for the kids who had also survived their first day of school and deserved a good meal. So, making lemons of lemonade, a tradition was born that continues deades later, even now that I am no longer teaching school and the children that began the tradition are now sending their own children off to school.

This year I was in Nashville at the conference on the kids' first day of school. I expected the kids to ask if I could leave money for the sitter to take them out that night. Instead they came to me with a different proposal. They suggested that since I had expected to take them out but couldn't... perhaps there was "extra" money in the food budget for that week. They proposed that the money I would have spent on dinner be divided among the children and put toward the cell phones they are trying to maintain. Mind you, I pointed out that I am not willing to trade all family events for their simple dollar cost. I reminded tham that not everything's value can be measured in dollars and cents. However, I agreed that this was a unique situation and I agreed to their proposal. Score one point for fiscal planning on their parts!

They also suggested that since I was going to be away, instead of the babysitter masking the meals, perhaps they could earn extra money by making the meals themselves while I was gone. Now, in the cold harsh reality of that week, not every child actually made the appointed meanl and earned their money. But that wasn't what made me happy. What pleased me was noticing with great joy this second sign of fiscal planning. This was the first time they have initiated a plan to earn money for a goal. Setting goals and breaking them into realistic plans is a crucial skill for future independence... especially in budget terms! Wooo hoooo..Score two points for the kids!!