THE POWER WITHIN - An Open Letter to the United Negro College Fund

I was recently humbled to be honored by the United Negro College Fund (UNCF) “In recognition and appreciation of outstanding service toward financial literacy of young people in New Jersey and beyond.”

Proud to receive the award, and in a room filled with family, friends and colleagues, I was touched by the introduction by Michael Cox, the Director of Development for UNCF.  Michael is an inspirational human being.  He could have any job in corporate America – naming his own salary.  Instead, Michael, who also happens to be a clergyman, has chosen to make a real difference working for UNCF. In his introduction, Michael told of our first meeting and that after a few minutes we were finishing each others' sentences about empowering the next generation to give them the tools to build their future.  I was choked up listening to one of my heroes telling me that he was thankful to have me in his life.    Being acknowledged in this way is reaffirming.

When it was asked to speak, I wanted to talk about Hurricane Sandy.  The awards ceremony would be in New Jersey, and we had just experienced the most powerful natural disaster of most of our lifetimes – certainly mine.  I knew that Michael Cox, religious leader, would ask me “What have we learned?”

We learned that this disastrous natural weather event was indiscriminate -  saw no color or socio-economic status.  It was power and power can be positive or negative.

Just because most of us have our power back on – do we really?  We need to reflect upon our collective power and whether it is working for the greater good.  Out of the devastation came a positive power of people to care, to share and to give.  It reminded us that together we must rebuild our personal and collective infrastructures – our collective future.

This is what UNCF does for our youth of color.  It helps young people to prepare for the future by giving them the economic infrastructure that society has not afforded them.  The nation's largest and most effective minority education organization, for more than 67 years, UNCF has raised more than $3.3 billion to help more than 400,000 students attend college and graduate from college.  UNCF has distributed more funds to help minorities attend school than any  entity outside of the U.S. government.

Children of color were shut out from our higher educational network.  This wasn't a natural disaster, this was a man-made disaster.  We all know that poverty limits access to a future of choices.

UNCF cares, shares, gives and advocates by opening the shut door for our youth.  It gives kids the tools to build their future. They award 10,000 students each year through scholarships and internship programs so that underserved kids can afford college, but they need more help.

Hurricane Sandy taught me that I didn't lose my power – I lost my conveniences.  My power lies in my blessings: my kids, my grandkids, my friends and my colleagues.

I have been blessed via my work to have been able to follow my passion which is to give kids and their families the tools to build a healthy financial life. A life they will design, not a life that they are a victim to.  A life of choice.

I serve over 500,000 children through my programs: 200,000 youth of active military people, 100,000 kids in the National Urban League, 10,000 kids in Jersey City, NJ 5,000 kids in Newark, NJ, 135,000 in FCCLA and DECA, kids in the YWCA, Girl Scouts and ASPIRA.

I am also committed to working with UNCF – Michael Cox and I are designing what that will look like.  The vision is to empower those minds of younger children and their families so that the economic road to college is easier.  Michael and I share our approach to life, in fact when he came to my home, I showed him a small plaque hanging in my kitchen, which reads “There are two ways to life life: as though nothing is a miracle OR as though everything is a miracle.”

“A Mind is a Terrible Thing to Waste.”  Hurricane Sandy taught us that heart and soul are also terrible things to waste.

Thank you – United Negro College Fund – for the collective power that you foster.  Thank you for not wasting minds, hearts and souls - thank you for giving us all the true power for a better future.

STORM OF EMOTIONS

In the 1980's I created the topic of "kids and money" and in the following years I have
written 26 books and founded the Children's Financial Network to promote financial
literacy. Along with teaching families to become money savvy, I have also, always,
stressed the importance of sharing and giving of one's self in order to be "Citizens of the
Community."

In a time of crisis, such as the devastating after-effects of hurricane Sandy, we are
reminded of the inherent good of the American people. So many have been directly
effected by losing their homes or their livelihood or even a loved one. The rest of us
who have been fortunate enough to escape unharmed or perhaps inconvenienced,
have, once again, seen compassion in action. This is also a time of introspection.

All around us we see our first responders risking their lives to help strangers in crisis.
Neighbors are helping neighbors. Government agencies begin to assess damages and
to offer assistance to those that have been displaced. Charitable organizations step up
to the task of offering aid. Citizens rush to donate to those charities. Even politicians
put their differences aside in order to get work done.

I am one of the fortunate who has only been inconvenienced with the loss of utilities. As
the storm began to move into my neighborhood, I found myself alone in the dark -
listening to the rain pour down and the trees brush against my home. I was afraid for
my safety and my property, but my overwhelming concern was for my family - my kids
and my grandkids - and for everyone else being touched by this storm.

I was able to get to a friend's home for comfort and safety. Eventually, I was able to
contact my family and was assured that everyone was OK.

So many others were less fortunate. Just in my community, one family was left
homeless after a fire destroyed their home. In another tragedy, a couple was killed
when a tree fell on their car - leaving behind two young children who were also in the
car.

I am an advocate of teaching our kids about budgeting their allowance, and as part of
that education I teach that a portion of the weekly allowance be set aside for charity.
This week I proudly watched my friend's son, who upon learning of the neighborhood
tragedies, rushed to get his container filled with the charity money from his allowance.
Before I understood where he had disappeared to, I heard - "Mom, we have to take my
charity money and give it to that family whose house burned down." He followed up
with, "Where are they going to live? We have to help them."

I know that charitable giving will always be a part of this young man's life. The lessons
and habits we learn when we are young shape who we become as adults. Teach your
children to be givers - also teach by example. Remember that giving can be more than
donating money, you can also donate your time, clothing and even household items. Be
sure to get your family involved.

That generous young man is right - "We have to help." We should all do what we can to
help our neighbors. We can make a real difference.

PAY TODAY OR LAYAWAY

The Christmas buying season is here even earlier this year.  We're looking forward to Thanksgiving but the stores already have their sights on maximizing their Christmas bottom line.  Holiday sales are expected to rise 4.1 percent this year.

It seems that our kids just went back to school and the leaves are still on the trees, but the major department stores have already begun their layaway service.  In fact WalMart and Toy “r” Us began a full month earlier this year.

Layaway is a good tool to help you with your shopping and budget.  Using layaway has several advantages – helps you avoid impulse buying, forces you to budget and helps you to avoid getting into trouble with credit card debt.  You can do your own layaway at home with your kids.

In MONEY DOESN'T GROW ON TREES, I teach my Four-Jar Budget System which is saving and budgeting for kids.  Allowance money is divided among the four jars: Charity, Quick Cash, Medium-Term Savings and Long-Term Savings.

Medium-Term Savings is actually layaway at home.  It teaches deferred gratification.  Help your child make a goal to save for.  Go window-shopping at your favorite department store or on the internet.  The age of the child should determine how long the saving should take.  The older the child the more ambitious the goal. Yes, you're teaching delayed gratification, but you're also teaching gratification -   three weeks is a long time to a toddler.  It's a good idea to print out a picture of the item being saved for and attach it to the Medium-Term Savings Jar as an incentive.

When my kids were young we used this method.  You may be surprised to find out how different your kids are from one another.  My son decided he wanted a Walkman – the prehistoric ancestor to the iPod.  My daughter had her sights on a special pair of designer jeans – some of you might be old enough to remember all those commercials  with Brooke Shields – those jeans were all the rage.  

Both kids were certain they knew what they wanted and were patient enough to save up but a funny thing happened along the way.  My son never wavered.  He knew he wanted that Walkman and nothing was going to stop him.  After a few weeks of saving, those must-have jeans no longer seemed so must-have to her.  She decided – and it was her decision – that a pair of regular jeans would be just great.  The logo on the rear pocket wasn't as attractive as it had been.

They both learned valuable lessons.  My son treasured his Walkman for years.  In fact, he took amazing care of it.  My daughter discovered that it might not be so important to have the most expensive item just because it's the trendiest.

As with all good tools you need to do your homework in order to use in-store layaway safely and correctly.  Make sure you read the fine print before you begin.  Putting an item on layaway involves getting into a contract with the store.  Read the rules, payment schedule and fees.  Some stores have eliminated up-front fees.  Others even offer a bonus gift card when your order is paid for. Make sure you really want to buy an item before putting it on layaway.

If you decided not to purchase an item, fees can be costly.  For consumers who don't pay on time or decide to back out, money will be lost [wasted].  Not only will you not get your merchandise, you also don't get your service fees back.  In many cases there is also a cancellation fee.  You will get back any payments you made minus the fees – in the form of a store credit.

Layaway at home or layaway at your favorite stores, it's going to be a long shopping season.  I want you to stay financially healthy.  If the stores are already trying lure your dollars away from you, it is certainly time to make your holiday budget.  After you make your own budget be sure to help your kids with theirs.  Be honest with your budget and be sure to stick to it.  Don't go into debt in the “spirit” of giving.

ALLOWANCE FOR TEACHING

According to a survey by the American Institute of CPAs, parents give their kids an average of $15 a week which adds up to $780 a year with older children receiving more than younger ones.  According to CNNMoney, parents say that their kids are spending their allowance as soon as they get it. That's human nature, isn't it?

Let's take a time out.  Financial literacy is learned and parents need to begin teaching their kids about money early on.  These lessons can start as early as three years-old and continue into adulthood. The fundamentals stay with us for life.

In MONEY DOESN'T GROW ON TREES  I teach my Four-Jar Budget System at length.  This is a system I created when I first began working with kids and families – it really works.  Let's look at the most basic principles.

The first thing to remember is that an allowance is “work for pay” - “work” being a series of age-appropriate chores.  Turn “pay day” into a ritual which means you should distribute the allowance once a week at a specific time. I suggest paying your child $1 for every year of age – for example, a 5 year-old gets $5.

Now about the “jars”, they can be envelopes or even plastic bags but they should be see-through.  The first jar is for Charity.  The second jar is for Quick Cash.  The third jar is Medium-Term Savings.  The last is for Long-Term Savings. Each should be labeled.

Charity is 10 percent off the top of the allowance.  This is how you teach your child the value of giving.  It also opens up a dialogue to discuss your family values.

The balance of the allowance is divided equally among the remaining three jars.

Quick Cash is is there for whatever your child wants to spend it on within the parameters of your family rules.

Medium-Term Savings is for a plan you have made with your child for something that might take three weeks or more of saving.  This is how you teach deferred gratification.

Long-Term Savings is to instill a sense of investment in his own future. I suggest saving for college. As the child grows, this money gets put into a bank account and later into other investments.

Now you have the framework to help teach your child the basics of saving.

IS COLLEGE STILL WORTH IT? - ABSOLUTELY!

According to the U.S. Department of Education, the average prices for undergraduate tuition, room and board were estimated to be $13,600 at public institutions and $36,300 at private not-for-profit institutions.  Remember, those are averages – there are over 100 schools that cost over $50,000 a year.

College tuition is outpacing median incomes but not going to school is even more expensive.  The income gap between the college grad and the high school dropout is huge.  College graduates earn 80 percent more.

While a four-year traditional university is preferable, it may not be for everyone but other post-high school education is also beneficial.  Community colleges, vocational training and even online universities play a valuable role. They offer an alternative higher education and retraining that is affordable and convenient.

Let's put this in real terms. In 2010, of the Americans who earned over $150,000, 82 percent had a minimum of a bachelor degree.  Only 6 percent had just a high school diploma.  People can graduate from college with quite a bit of debt but the investment in college is still a good value.  A study from the Hamilton Project found that $100,000 for college would yield a higher lifetime return than if you had invested that same amount in corporate bonds or hot stocks.

YOUNGER AMERICANS WALK AWAY FROM CARS

According to CNNMoney, young Americans aren't buying cars like they used to.  In the last five years, the share of new cars bought by the 18 – 34 age group fell 30 percent. Is it a sign of the economy or are other social factors at play?

This age group has been hit particularly hard by the recession.  There is also a trend to re-urbanization which affords greater access to public transportation.  The expansion and popularity of car-on-demand rentals is off-setting some of the need to own and insure a vehicle that may not be used very often.

The ever-growing use of social media is reducing the traditional social importance of owning a car.  Now that this generation can meet and interact on the internet, the need to get in the car and go for a cruise downtown isn't as important.

According to a Deloitte study, forty-six percent of Generation Y kids “would choose Internet access over owning a car.” Recent increased driving restrictions such as raised age for licenses, restrictions on cell phone use and limits on car occupancy are taking away that appealing feeling of freedom.  The restrictions actually serve to “cut them off from their friends.”

Auto manufacturer analysts offer a rosier long-term-theory.  They tend to agree that, even though young people may hold off on buying new cars, at some point they will have families, move to the suburbs and need their own cars.

Whether or not you live in an urban location and even though trends maybe changing, you have to teach your kids the financial truth about car ownership.  The manufacturers are probably right in thinking that your kid will be buying a car someday.  Your child needs to know the real cost of having a car and the necessity to budget and save.

In Money Still Doesn't Grow on Trees, I have a chapter titled: TEENS AND CARS – HOW NOT TO DRIVE YOURSELF CRAZY.  I suggest a short quiz for your kids about the different costs associated with buying a car and different costs associated with operating a car. How much are these costs?

Go over your kid's answers with them.  Remember to include sales tax, registration and inspection fees, insurance premium and maintenance.  Don't forget the ever-climbing cost of gasoline. Have your kid do the research and put a realistic price next to each item.  The result is sure to be sticker shock.

I am not in favor of a generation of young people staying at home, tweeting and surfing the net as a substitute for face-to-face human interaction, but perhaps riding a bicycle and utilizing public transportation will continue to be an appealing, economic and Eco-friendly, alternative to owning a car.

TEACH YOUR CHILD THE “WHY” OF SAVING

We have a very low success rate of saving in the United States.  According to the Wall Street Journal, savings fell to 3.6 percent of personal income in the first quarter of this year.  We have to start teaching our children about saving when they are young.  The key is to make saving a habit and I start these lessons when a child is as young as 3 years-old.

Begin by explaining to your children that we save in order to get things we want in the future, but also to get things we will need in the future.  It's difficult to think about the future when you're young because most children think of the future as next week, after dinner or five minutes from now. A three year-old is not going to understand the concept of long-term saving, neither is a ten year-old.

In “Money Doesn't Grow on Trees” I explain that saving means putting something away in a safe place to be used, if necessary, at another time.  I suggest having your kids make a list of things you can save besides money.  Squirrels save nuts to eat during winter; most of us save empty bottles and cans for recycling.

In my Allowance System for Children it is a rule that they save some of their money for long-term.  With your help, they have to decide what they are saving for.  I like to suggest saving for college. A good savings plan begins with setting goals.  Talk to your children about what some of their longer term goals could be: a house, a car, other large-ticket items.  Explain that it takes planning and unless you think about these expensive items when you are younger, you probably won't have the money to obtain them later on.

Explain that a goal should be realistic and obtainable.  If you know that you and your children will never be able to save enough for a private college, don't set that as a goal.  The goal should be state school tuition but acknowledge the possibility that your child could get a scholarship to that private university.

Remember, at this point, they don't have to plan out their entire life but it is important to set aside money each month.  Financial planners recommend putting aside 10-15 percent  of one's net pay for savings.  The point is to create this habit of saving while the children are young and “pay yourself first”.  That means putting your own money aside each time your receive it for your savings goals.  Explain what college costs today and what they could be when they are actually ready to go.  Make sure they understand how prices rise.  They need to understand real budgets, real money issues and what it will take to save for real goals.

EVERYONE NEEDS GROCERIES

Aside from working, paying taxes and sleeping, everyone has to eat.  Dining out is a luxury.  Dining in is practical, healthy and financially sound.  This means grocery shopping is a part of life.  It also provides valuable life lessons for your children: budgeting, making smart choices and savvy shopping tips.

Do your homework.  Before you go shopping have your kids help you take an inventory of your groceries.  This will help you decide what needs replenishing and helps eliminate buying duplicate items.  Think of what meals you will be making during the week. Make a shopping list.

Take advantage of money-saving strategies.  Using coupons, enrolling in your grocery store's customer loyalty program and being aware of rebates will all save you a significant amount of money.  Make this a fun project: once a week hunt for coupons in your local newspaper with your kids.  Generally local newspapers have one day a week for coupon offers.  Keep in mind that just because you have a coupon for an item it's not a bargain if you don't need that item.  Check coupons against your shopping list. If you have a coupon for an item on your list put an asterisk next to that item to remind you.

Remember that store brands can save you quite a bit of money over regular-priced name brand items.  According to Consumer Reports, blind taste tests revealed that companies have made such great improvements in their private-label brands that it is often difficult to distinguish taste between the two. This can save an average of 30 percent off your grocery bill.

Common wisdom suggests eating a healthy snack before grocery shopping helps cut down on impulse buying.  Sticking to your list will also help with impulse buying.  Allow your child one healthy impulse buy such as a piece of fruit or some other nutritious snack and set a price limit.  This will help your child learn the value of using a choice wisely...it will also make your shopping trip just a little more pleasant!

Finally, pay attention to the check-out process.  Have your child watch as items are scanned to be sure you are being charged accurately.  If you feel an item has wrung up incorrectly, question the clerk.  If necessary ask for a manager to check the price on the shelf against the scanned price.  Some grocery stores will even give you the item for free, or some other reward for an incorrect scanner price.

Go green and put your kid in charge of bringing reusable shopping bags with you. This helps to reduce the energy and natural resources required to make paper or plastic grocery bags and keeps them out of landfills. Teach your kids a valuable ecology lesson by example.

TEENS AND JOBS

Now that kids are back in school, many teens will be thinking of getting a part-time job to help  supplement their allowance or to save for a car. Because of economic conditions, for some families,  there may be no choice but for the child to contribute to the household income if possible.  While I am a strong advocate of teens working a full-time summer job and even some weekend work during the school year, I don't believe that an after-school job is a good idea. Parents need to help your children balance work, school and time off.

Let's talk about the principles of of a budget but instead of money, apply them to time allocation.

Sleep is the foundation upon which our mental and physical health are built. Nobody gets enough sleep these days but teenagers especially need their sleep.  According to a National Sleep Foundation study on teens and sleep, teens need 8.5 to 9.25 hours a night.  This means that sleep time is budgeted as a “fixed” time allocation. School hours are also non-negotiable.  Your kids have to go to school.  They must not miss days or cut classes because of the demands of a job.

Homework, extracurricular activities and household responsibilities can be variable time allocations but they have to be counted realistically.  Make sure you budget enough time as these can't be shortchanged.

Time off means free time.  This is time just for the teen which doesn't have to be accounted for.  Everyone deserves a certain amount of “down time” whether it's time to take a bike ride or read a teen magazine.  How the time is used is up to the teen but it must be included in the budget.

If you add all this required time it doesn't leave much left for an after-school job.

Successfully managing their school time should be the main focus for our teens because the more education our children complete, the higher their lifetime average earnings will be.  This is true for both boys and girls but boys are more vulnerable.  According to the Manhattan Institute for Policy Research, 72 percent of girls compared to only 65 percent of boys graduate high school.

We know that work is good and healthy but it is not always good for our teens. If your teen is going work, be involved with your teen in the job choice. Be careful not to take on their responsibilities but it is up to you to discuss safety, training, location and schedule.  The National Institute for Occupational Safety and Health reported that an average of 231,000 teenagers under the age of 18 are injured at work each year.

If your child does work, it is up to you to monitor your child's work environment and to keep tabs on school work.  Confirm that grades don't suffer because your child is too tired from working and keep an eye on attendance.  School comes first.

COLLEGE KIDS AND CREDIT

College is a busy time for young adults. With part-time jobs, research projects, classes and dating most college students are more concerned with their GPAs than their credit scores.  It's pretty easy to make some really dumb mistakes that can harm their all-important credit score which can cost money later on when it's time to get a car loan or mortgage.

In 2010 the landmark federal legislation that overhauled the credit card industry went to college.  The laws began reaching into college campuses to protect students from “unfair or deceptive” practices by issuers.  The legislation proscribes unique protections for the young consumers who are such an attractive market for the card companies.  According to Sallie Mae, about 42 percent of college students have a credit card.

Credit card companies can still market cards on campus but they can no longer offer gimmicks or “come-ons” such as t-shirts, coffee mugs or even concert tickets just for filling out a credit application.  If a student is younger than 21, it is now tougher to get a credit card but it is not impossible.  “If they want to get a credit card, they're still finding ways to get credit cards,” said John Ulzheimer, President of consumer education at SmartCredit.com.

Even with the new laws students can still get into trouble with their credit.  According to Quicken Loans, there are two areas that cause these kids to have lower scores: high balances and credit inquiries.  Most students, and many adults, don't know that just applying for new cards can damage a credit score.

Long before your kid has gotten to college you should have been teaching them about finances and preparing them to be out in the world.  If not, it's never too late.  Students should not think of credit as cash.  They should know the difference between a debit and a credit card.

Parents may turn to the plastic for everything in order to rack up airline miles or other rewards but hopefully you have been careful to explain that you have to have the cash to pay that bill at the end of the month.  Paying the monthly balance in full avoids interest and builds solid credit for the future. Credit cards are not “magic” money.

Credit card abuse and high credit utilization are not the only ways to damage your credit score.  Even students who don't have a credit card can get in trouble.  Many college students who graduate are stunned to find that their credit scores have been hurt by unpaid utility bills.

They all move out of an apartment they rented off campus with friends and no one pays the bill.  The utility bill goes into collection and the student named on the bill take a credit report hit of 50 points or more. It's easy for a bill to go unattended to and go unpaid.  It could even be an honest mistake or misunderstanding but there is still a negative impact.

Send your kids off to college with the knowledge and tools they're going to need to get them through their adult financial life.

BIRTHDAY PARTY CRAZY

Remember when kid's birthday parties featured “Pin the Tail on the Donkey”, ice cream and birthday cake?  The guests were a few classmates and the birthday kid's grandparents.  At some point everyone would gather around the cake and sing “Happy Birthday”. Gifts would include a car model or some doll clothes.  Hula hoops were pretty cool.

Those days are gone.  We have entered the age of “Extreme” birthday parties.  “Pin the Tail on the Donkey” has been replaced with a live donkey.  The birthday cake has to be a creation worthy of a Food Network competition and follows a catered meal.

The pressure and expense of the “birthday circuit” have become impossible.  In addition to the soccer games and music lessons, the already over-busy kids have invitations to these enormous parties many weekends out of the school year.

According to family therapist Bill Doherty, one Minnesota family rented a bar for a princess-themed party.  Guests were picked up in limos.  The adults wore formal attire.  There was live music and even  champagne for the adults.

The birthday “princess” was turning 4!

Parents don't want their child to feel less important than their classmates and so the cycle continues.  The key here is to adhere to your own value system.  It is great to mark events such as birthdays but it is important to keep perspective.  As with most of our milestones, use this as a teachable moment.

When my daughter was at Dalton she gave a wonderful pair of mittens to one of her friends as a birthday gift only to have the kid come to my daughter's birthday and give her an expensive stereo system.  We called the mom, thanked her and returned the gift.  The next day I called the Class Mother and told her there was going to be a new gift rule: gifts had to be no more than $12.00.

Many children have three or four birthday parties each year: one for classmates, one for nuclear family, one for family friends and one at school.  It would be OK to cut this in half.  There can be one party for youngsters and one for adults.  Keep the list short.  Keep the party simple. The goal should be for the birthday child to enjoy spending time with friends and family.

KEEP THOSE GRADES UP!

In today's economic environment, higher property taxes and cost of living, frozen wages and withered home equity have put the crunch on middle-income parents.  Many no longer have the savings or even borrowing power to keep up with the ever-rising cost of education.

A family making $75,000 a year might have to contribute $10,000 a year toward the cost of of college before qualifying for need-based aid.  For a family with $150,000 in income the contribution jumps to $35,000 a year or more.  The need for student loans has skyrocketed.

Universities like Tulane are offering sizable amounts of aid based mostly on academic promise in order to bridge the loss of brighter students to less-expensive public colleges.  According to an Education Department study, the percentage of students receiving merit aid since 1995 has grown to significantly rival the number of students with need-based aid.

Merit aid is one of the most promising answers in college financing now.  Students can be attracted to schools for any number of emotional reasons including the look of the campus, having a friend also attending or even the climate.  Then the parents have to figure out how/if they can pay for it.  Remember your budget.

Put financial consideration high on your list when making the college “wish list”.  Be sure to include schools which offer substantial merit aid.  Look at schools that will want you and be willing to help out.  The University of Miami, for example, awards merit scholarships averaging more than $23,000 a year to nearly one quarter of it's freshmen.  Tulane offers similar statistics.

Good grades are not only necessary in order for your child to get accepted by the college of choice, but to help pay for it.  It is important to note that once accepted, the student has to continue to get good grades and meet set standards in order to renew the merit-based aid.

IT SHOULDN'T TAKE A TRUCK TO MOVE INTO THE DORM

Gearing up for college move-in is another chance for teaching budgeting and common sense.  Having a teen leave the nest for the real world is a milestone but we shouldn't try to assuage our anxiety with unnecessary shopping and spending.

First your child needs to find out what is provided by the school and also what is permitted in the dorm room.  Keep in mind that dorm room space is limited. Now it's time for a list.

You and your young adult need to make three lists: “must-haves”, “wants” and “bring from home”. Remember to research prices and list them with each item.  Set a realistic budget and stick to it.

Before you make any purchases or decide what to bring, your child should contact the roommate.  They can save money and clutter if they don't duplicate items that they can share.  For example, one can bring a microwave and the other a floor lamp or stereo.

Remember that this is your child's time to grow.  Let them make decisions.  Having matching bedding might be a priority for you but not your son or daughter.  You are not the one heading off to college.  Don't obsess about remembering every last sundry, snack or notebook.  Even the most remote campuses have commissaries and book stores.

Get ready to start baking your kid's favorite cookies to put in those “care packages”!

BACK-TO-SCHOOL BUDGETING REFRESHER

It's back-to-school time again and that always means it's also “back-to-spending” time.  This season people are projected to spend nearly $670.  This is a great time to teach your children.  Let's get back-to-basics.  Start by helping them make a spending budget for the two major back-to-school categories of supplies and clothing.

Begin with supplies.  First get a list of all the recommended supplies your children will need for the school year.  “Need” is the important word to focus on.  Give each child a small notebook and show them how to list each item and price.  Ask what supplies they think they will need or want for this year.  Again, they should write down the item and its price.  I recommend that you should pay for all the “needs” and have them pay for their “wants”.

Next, do the same thing with their clothing budget.  The list should be specific, detailing how many of each item they think they will need.  The total cost is likely to surprise you and your child alike.  After getting the totals, you decide the final amounts and prices.  If they say that the “need” three pairs of popular boots at $200 each, you get to say “I'll pay for $40 boots”.  We know this isn't going to be easy but this is a worthwhile lesson.

Your children can now start to understand the dynamics of planning, and most importantly, budgeting.

ARE THINGS LOOKING UP FOR STUDENT DEBT: NOPE

Generally, debt is down for the American consumer. Mortgage debt and credit card debt is being paid down – but student loan debt is not. It stands at roughly $1 trillion and rising.

Why? For starters, during the recession many people decided to return to or stay in school because job prospects were so lousy. People were hoping to wait out the recession and improve their chances of getting a job when it was over.

Student debt has also increased because of the rapid rise in the cost of college tuition, which is growing faster than inflation. Also, Mom and Dad may not be able to contribute as much as they had expected to, because they may be unemployed.

Some of the college debt burden is also falling on students’ parents and grandparents; almost 17% of outstanding past-due student loans are held by those over 50, and almost 5% by those over 60, according to an economist at Barclay’s Capital. This is the time parents and grandparents should be saving for their retirement, not worrying about college debt.

My advice? Remember, your offspring can borrow for college, you can’t borrow for retirement.

The Reinvented Wedding

Twenty-seven thousand dollars is a lot of money for a party even if it is the most important day of your lives.  According to theKnot.com and WeddingChannel.com, that's what the average wedding now costs.  Costs are even higher in the more expensive markets such as New York City and Chicago.  This is a good and sensible reason for the recent trend toward more homespun and creative wedding receptions.

In this sluggish economy more and more couples are turning to simpler, intimate and sometimes off-beat ways to celebrate.  According to Amy Kaneko, an events planner in San Francisco, “the backyard is the new ballroom.  “I think people are waking up to the insanity that is the wedding market” said Marin County, California caterer Stacy Scott.

Couples are opting for simple ceremonies followed by downsized receptions including picnics, barbecues or simply inviting only closest family and friends utilizing such venues as public parks, backyards or the living rooms of friends or family.

Another reason for the new trend is that marrying couples are now at record high ages. According to Brides Magazine, the average age of the bride is now 27 and the average age for the groom is now 29.  Couples are busy and have to do their planning in the midst of work and other pressing commitments.  These simpler festivities can take as little as two weeks planning and coordinating.  Often guests are asked to bring their own chairs and cushions.  Some couples have even gone the “covered dish” route asking friends to bring food and beverages.

Several years ago I worked with a couple to budget a wedding for a feature on Oprah.  We put together a complete Las Vegas  wedding for ten thousand dollars.  The key, as with most financial decisions is having a budget and sticking to it.

It is essential that the marrying couple and family [if they will be shouldering some of the cost] assess their finances, make a budget within their means and meticulously adhere to the plan. You must accurately assess all costs that will be involved and be honest and realistic about them.  Also include a category for unexpected costs.

Stay within your means and don't let your emotions get in the way of your financial health. If you can't afford an exorbitantly priced new designer gown, consider buying a gently used one or perhaps borrowing a gown from family or a friend.  You can always have the dress tailored to fit you which is far more cost effective than buying a new one.  If you are going to have your reception at a restaurant consult with the establishment to find a cheaper time of year or day of the week.  It's OK to break with tradition.

These are all great ideas even in better economic times.  Often the year of preparation and lavishness of the traditional wedding can overshadow the real meaning of the gathering.  These less formal, less frenetic celebrations make for a special day that everyone can enjoy and remember.

There's No Place Like Home

Traditionally, “fleeing the nest” has been a rite of passage for kids heading off to college.  Both children and parents look forward to the new life-stage.  Kids eagerly anticipate their freedom.  Parents dream of a clean, vacant extra room in the home.

According to a recent study from the largest student lender, Sallie Mae, this year more than half of the students surveyed lived at home while attending college.  This is up nearly 9 percent from just last year with most of the rise coming from families with over $100,000 in yearly income.

The study also noted that there has been a noticeable change in the way college is paid for overall.  Students are carrying a larger percentage of the cost, up 6 percent from four years ago. Parents are paying 7 percent less.

Along with choosing less expensive colleges, remaining in the family home has become another popular tool to help offset  the high cost of higher education.  Postponing the “fleeing of the nest” is not, however, without complications.

I discuss this topic in Money Still Doesn't Grow on Trees in a chapter on kids moving back home but it also applies to kids who don't leave.

Both parents and kids must have a set of rules.  These rules won't be the same ones that you used when your kids were minors and you were completely responsible for them but your kids are not your roommates.  Remember, it is still your house.

Two very important issues that you need to clarify up front are “who pays for what” and “my house, my rules”.  Be specific.  Negotiate a fair contract.  For example, you're probably not going to set up a curfew but you want to be notified if your kid isn't going to be home when expected.  On the other hand, you're not going to enter his or her room to gather dirty laundry from the floor. Coordinate on a reasonable budget to determine “who pays for what”.

Parents, forget those paint swatches and hold back on ordering that new treadmill.  That “extra” room might not be vacant for a few more years!

Teens and Cars: How Not to Drive Yourself Crazy

We all want things we can’t afford, and we basically know that there are various ways to handle the problem:

• We can do without it.
• We can save for it.
• We can find ways to increase our income.
• We can buy now and pay later on some sort of an installment plan that we can or can’t afford.

But what happens if we plan carefully in advance—save up, increase our income, or set up a plan to make payments we can afford—and suddenly we discover that we still can’t afford it?  This is a situation that your teen may easily find themselves in when it’s time to buy a car or pay their share of insurance on a family-owned vehicle. This comes from making plans based on too little information.

Give your teen this quiz before they start the auto-buying process:

1. What are all of the different costs associated with buying a car? How much are they? (Have your teen make a detailed list.)
2. What are all the different costs associated with operating a car? How much are they? (Encourage teens to go on-line to research the answers.)

It’s heart breaking when you’ve seen your teen work hard and save up what they think is enough for a car . . . when they drag you to their computer to show you the ad for that perfect vehicle . . . it's only $6,000.  “I’ve saved the money, so let’s go buy this…now!”

But we all know that your teen will need more than the $6,000. They will also need money for:

• Sales tax
• Registration
• Inspection
• Insurance
• Extras

The extra price tag on all these? That’s for your teen to research, with your coaching.  They may be shocked at the insurance quotes, which vary greatly from state-to-state and even within different regions or locations in each state—not to mention—gender.  For instance, in New Jersey, for a male driver, who is 18-years-old, the average insurance quote is $2,999 or $250 per month versus an 18-year-old female driver at $2,267 or $189 per month.  After your son stops grumbling about the fact that his insurance would be lower if he were a girl—turn this into a “teachable” moment and ask him to think about why a male’s insurance is higher!

Also, I include a trip to the insurance agent before turning over the keys. Since we are parents and most of what we say is heard by our ever-so-smart teens, as “Blah, blah, blah,” let your insurance agent explain liability, collision, personal injury coverage and the facts-of-life if your child is caught speeding or under the influence of drugs and alcohol.  The facts are “sobering” and are more impactful coming from a third party.

If your teen is going to drive the family car, let them research the cost of adding a teen to your insurance policy. I’m a firm believer that they need to pay the extra cost. Make sure this is also on the list of questions for your insurance agent visit. In many states, for instance, the insurance company can cancel your policy after one accident, or even one moving violation, by a teenage driver.

Also, let your teen find out what they can do to reduce the cost of the premiums. This varies from state to state and carrier to carrier, but here are some things that will generally make a considerable difference:

• Have your teen take and pass a driver-training course.
• If your teen is a good student, make sure their grade record is part of the insurance package you give to your carrier. Explain that insurance companies have found that good grades correlate with being more responsible and actuarial tables show that good students get into fewer accidents.
• Put limitations on how much your teen drives the family car—and which car they are allowed to drive. Premiums may be lower if they are driving the older or cheaper car. (Also, if your teen is only allowed to drive occasionally, premiums may be lower.

The next thing teens have to figure out is the ongoing cost of gas, maintenance, and emergencies and how they are going to pay for that. If they are using the car to do chores for you, it’s only fair if you help with the costs—if not, they may be shocked when they spend $50.00  to $100.00 for gas per week!


Stay tuned for my next blog post where I'll show you the “contract” I want you to create with your new driver.  Until then, Happy Motoring! (I know you have a lump in your throat—“Teens and driving” always causes that!)

From Helicopter Parents to Free-Range Parents

I grew up in the days of freedom. We rode our bikes to school and met with the neighborhood kids to play after school. We invented games or scavenger hunts and never seemed to be bored. We had to be home at dusk. Mom and Dad looked at our report cards when they arrived and if they got a call from the school …we were in trouble. We were supposed to do our homework, and we did. We were supposed to get good grades, and we did. Life was pretty simple.

Then, we grew up and had kids and the world seemed to get more dangerous (or were we just more aware of the dangers?) Kidnappings, pedophiles, predators praying on our kids. Mom and Dad both working so kids had to be entrusted to others. When parents were home, caring seemed to be shown by hovering. “Who are you playing with? What are you playing? What are you reading? Are you reading? What are you eating? Who are your teachers? Where is your homework? Let’s do it together. Let’s go to: soccer, football, cheerleading, yoga, ballet lessons, chess classes, tutoring, piano practice…(I’m getting nauseous).”

We went from free-range parents to helicopter parents. Ok, we try to balance work and home and kids and family and friends. If it isn’t scheduled, it can’t happen. We all want our kids to grow up to be healthy, self-sufficient, independent, creative kids who are in safe, supervised environments protected from the creeps that are lurking about. Are there areas in our child’s lives where we can give them some freedom so that they can learn to make choices on their own…and equally learn the consequences of those choices on their own? Yup! With money!

Kids today, if we allow them, can earn, save, spend and share money by being independent self-starters who can be empowered to make their own choices. You set down the rules. For instance, have your kids decide what they want to buy. For the younger ones, maybe a small toy, for older ones, it could be a video game or cell phone or iPad. (You must approve of their savings goal.) The challenge is that they have to earn the money to reach their goal. Either you can start them on an allowance doing regular chores – or pick odd jobs for them to do. [Hint: pay by the job, not by the hour.] They can dust, vacuum, weed, water plants, clean windows, sweep floors, brush dogs, stack recycling…let them come up with ideas. They can also earn money by using some of those skills they’ve learned, like teaching other younger kids to play the piano, or soccer, or chess, or do yoga.

Of course you will still supervise, but avoid hovering. If your kid earns the money - they get to buy the item - if they don’t earn the money – they don’t. It’s simple. You can use the same system for them to pick and donate to charity.

This earn and learn system will help balance the helicopter versus free-range parenting. The drawbacks of the helicopter parent is that you create a dependent child who doesn’t know how to be independent, because they were never allowed to be. The free-range parenting drawback is the safety issue that independence in a dangerous world can create.

Teens and Summer Jobs

Has your teen found a summer job yet, because it’s going to be hard to find one.  In fact, last year, only 1 in 4 teens had summer jobs, the lowest on record, and this summer may be just as tough.  

Half of all teens are in school over the summer doing remedial or prep work for college. The recession has also changed the landscape. Now, teens are competing with grandparents, who are also vying for the same summer jobs.

What should your teen do?  They should research companies that hire teens: camps, day care, retail stores, restaurants, tennis and swim clubs, libraries, parks, resorts—you get the picture.

Have your teen look into internships with corporations, who are interviewing now.  Also volunteer work is great.

Help your teen to create a simple resume and a cover letter.  Work with them to hone their interviewing skills. They should go prepared to each interview with a list of intelligent questions that demonstrate their knowledge of the job and why they are perfect the candidate.

They can search summer job opportunities online and also visit prospective employers in person.  They can also be creative and use their special talents by giving lessons to neighborhood kids.

The earlier they start, the more options they’ll have.

What Parents Need to Tell A Child About Their Own Finances: Where There’s a “Will”, There’s A Way!

In my mother’s day, and my grandmother’s time before that, a family discussion on the subject of sex or money was not considered “appropriate" dinner conversation. (Of course, that was also a time when family had dinner together!) Both were viewed by them to be intimate, private topics, and there is evidence to suggest that neither subject was discussed much even between husbands and wives!

Today, social morals have been relaxed (in some families) and sex is even a required topic of discussion within many families. The great life-threatening dangers that can come from imprudent or unprotected sex have forced most parents out of Victorian age restraints.

Oddly enough, the subject of money still has not been equally discussed, yet I contend that the imprudent or unprotected spending have their own serious consequences: over extension of credit, personal bankruptcy, and, at the extreme, homelessness, these are some of the unfortunate results that are on the rise.

Are you prepared to discuss your own finances with your child?  “Too personal”, or “none of their business?”  No parent cares to pass along information about him or herself that can be used to perhaps be embarrassing later on. (That’s why we discourage Mom from displaying those cute age-2 bathtub shots to our boyfriend!)

I don’t think Junior needs to know that you bounced seven checks in a day, or that you were denied a mortgage four times before getting approved. However, there is some financial information about yourself that an older child, and certainly a teen, does need to be aware of for their own benefit.

Start with your will.  You note I said your will.  If you have kids and you don’t have one – stop reading my blog and go to: www.nolo.com.  Make your will today with maximum ease and minimum cost using Nolo's Online Will.  Just log in, answer questions about yourself and your property, and print!  Or make your will with Quicken WillMaker Plus, software that comes with dozens of other useful documents such as Power of Attorney and Health Care Directive.  Not only does a will outline what happens to your financial assets and designate an executor (the person who sees that the instructions in a will are carried out), it also lays out (or should) what you want to happen with your children until they are old enough to be on their own.

It’s shocking to me to learn that despite the obvious importance of having a will, 55% of all Americans die without one.

I’m ok with you going onto sites to see what you want in your will – but I’m still a believer in getting a lawyer to actually draw one up. It’s not worth getting it wrong.

Some of the things to think about are:

1. Who do you trust to be the executor?
2. Who will get custody or guardianship of your kids?  By the way, make sure you have communicated your intentions to that person.  A surprise is not a good thing.
3. How will that child be provided for financially?  Have you made sure your guardian will also be provided for? Raising a child is expensive, you don’t want to burden that guardian.
4. How are your assets to be divided up?  Who gets what?  Remember, you need to review your will every 5 years or when something changes, like a new child, a death, divorce, etc.

The reason a discussion with your child about your will is so valuable is that it gives you the chance to assure your youngster that he or she will be taken care of if something happens to your spouse/partner. Don’t think that your 4 or 5 year old hasn’t thought of this. They are exposed to Bambi, Lion King, Cinderella – what happened to their parents? Hansel and Gretel still freaks me out!

Give your kids the assurances that are age appropriate, make sure they feel secure and don’t think they’ll end up in an orphanage begging for porridge.

Teaching Our Kids Important Money Skills Through the ATM

Without realizing it, many of us unconsciously leave our children with the impression that the ATM/debit or credit card in your wallet or purse is the way you get money.  When we run our errands, we often run our card through the machine or give the check-out person our card without explaining to our children what we are doing.  Think about it; even as babies, strapped in a car seat, they accompany parents as they use the bank drive-thru window.  It’s no wonder our kids think of these as magic pieces of plastic.

Part of a child's financial life needs to include the understanding and responsibility of using these cards. We also use language like “Oh, I don’t have money, I’ll just put this on my credit card.” We need to finish that thought and explain that the card is only a substitute for real money until the bill arrives and you have to pay that bill.  If your children are older, you can even show them the credit card bill and explain to them that now you are paying the bill.

First, children need to understand that our ATM card represents an account we have in a financial institution – a bank or credit union. If they haven’t been with you when you go inside the bank, take them along next time.  You can point out that the person behind the window is a teller and that the plastic card you carry is an ATM or Automated Teller Machine card.  While tellers are there only while the bank is open, the ATM works 24 hours a day, 7 days a week, without a break. Another advantage is that, since these machines are part of a network, the machine you use does not have to be at your own bank. The ATM allows you to access money in many different places, whether in a bank lobby, food or retail store, and other establishments around any town or city.

Help your kids to understand what happens when you put your card in the machine.  That thick black stripe on the back of the card contains information that tells the ATM who you are and identifies your account information.  One of the first things that happens is that you are asked to input your secret code using the key pad. This code, or PIN (Personal Identification Number), is one you have selected which you keep secret.  Anyone who tries to use the card without knowing that secret code will be unable to carry out any transaction at the ATM.  Your kids can think of this as the same kind of security we have with our passwords on our computers.

Another element of the ATM or credit card is the variety of transactions it enables. Our children usually see us obtain cash, but they should understand that you can also deposit money, move money from one account to another, or even just check to see your account balance. The machine gives you a receipt for each transaction.  Remind your kids that, if the machine you use does not belong to your bank, you may be charged a fee.

Now get out there and start teaching your kids important money skills!

Do We Instill Personal Values Through Consumerism?

So, you think that your personal values are only taught in church, mosque, or synagogue? Think again. There are few buying decisions that you make, which may supersede conventional wisdom and, believe it or not, this is allowed.

Usually these decisions are based on your personal convictions. They can be for political or religious reasons, or out of personal loyalty. For instance, do you refuse to drive anything but an American-made car? My stepfather did. Do you shy away from buying items made by anti-American countries? Or do you buy certain products because you or someone in your family works for that company?

Whatever the reason, if it strongly influences your buying decisions over all other considerations, you may want to explain your position to your youngster.

You know that one of my passions is to make U.S consumers aware of the impact of teaching values through the buying decision, particularly when purchasing things with the label, “Made in America.” This is a subject that is growing in importance; not only because of the recession, but also because many U.S. jobs are being permanently moved offshore.

If buying products made in the U.S. and producing jobs for our workers is important to you – discuss that with your children. Explain that the reason you want to buy goods made in the U.S., means that people here are working in jobs to make those products (continue the process for your youngsters). If people are employed here, they also pay their taxes. If they pay taxes, our government has to borrow less to pay for all of the services to keep the country going. Also, explain that, even for something as insignificant as a $20.00 t-shirt, buying an import could eliminate an American manufacturer who gives people jobs. So, fewer jobs now means more people need the government’s help and more tax burdens for the people who still are working.

Try not to scare the kids, but older teens can handle real-life economics and understand how these small decisions affect the larger community. Think about it:  If every American spent $64 on something made in America, we could create 200,000 jobs right now. The only way to figure out where something is made is to read the labels.  Teach your kids to do that. If they are buying online, see if they can inquire as to where the product was made, as well.

When I recently hosted “Moneytalk,” a national radio show, normally hosted by Bob Brinker, one of the callers told me an interesting thing. I have not been able to verify this, so let me know your thoughts. The caller said, that with most major product call centers, if you are transferred to a customer service representative in a foreign country, you can request to speak to a supervisor and ask to be transferred to a rep in the U.S.  Try it next time and let me know.

Never A Borrower Or Lender, Be ( especially if you are a child!)

An issue facing kids is borrowing and lending. Just as some societies distinguish themselves from the rest of the world by setting up elaborate barter systems, an important element of preteen and teenage custom is borrowing and lending money. You’re not going to change that. But you can discuss it and channel it before it becomes a problem.

One step toward helping your children understand borrowing and lending is to incorporate loans into the Allowance Jar System you’re using. Occasionally, your child will want to buy something that’s “on sale” right now or that it may be a “limited-time opportunity,” like spending when on vacation. The purchase price may not be out of range of their budget – they could easily afford it with four weeks of Medium-Term Savings – but they don’t have the ready cash right now.

But if you loan them the money to buy it, are you caving in and abandoning your system? Certainly not. You can work out a repayment schedule, with just a small rate of interest. After all, you’re not trying to make money off your kids. The interest payment can go into a family vacation fund, for instance. The point is that you want your kids to understand how borrowing and lending work. Charge them a flat interest of 10 cents per week on every dollar borrowed. They will start to feel the bite of interest, and that’s the point.

You can also use borrowing and lending situations to teach your children about establishing credit. If your child repays the loan on time they’ll be eligible for another, perhaps larger loan later. If not…they become a credit risk and won’t be eligible for another loan until they’ve proven their responsibility to your satisfaction.

When it comes to putting these lessons into practice outside the family, one rule changes right away. If your kids are loaning money to a friend, they shouldn’t charge interest. It’s a bad precedent to set between teenage friends. The most important thing to teach your child is that money lending is an exchange that has rules. If they’re going to lend money to a friend there should be a clearly defined repayment schedule. Your teen should discuss with the borrowing friend:  (1) How much money they want to borrow; (2) What the money is for; and (3) When the loan will be repaid.

More importantly, your young lender should know that this transaction is about “money” not “friendship.” The friend may not repay the loan on schedule, for instance. Explain that someone can be your good friend, yet still be irresponsible with money. With a contract (even a verbal contract), clearly understood by both parties, if a borrower fails to keep up their end of the deal, it doesn’t have to spell the end of a friendship. Your teenage lender should make it clear to their friend that there surely won’t be anymore loans available to them. However, another important lesson every lender should know in advance is that they should never lend more than they can afford to lose. Tough lessons, but real life!

Make Your Brain Happy: Earn Your Money

Have you bought that lottery ticket and dreamed of the bliss that big pay-off could yield?  If you have—you are not alone.

But, researchers at Emory University, with too much time on their hands, did a study awhile ago and determined that people who actually earned their money were happier.  So, all you lottery winners and trust-fund babies step aside to those who earn it.  We all thought you were happier, but it seems we working folks are… who knew?

Emory University researchers had measured brain activity in the striatum—that’s the part of the brain associated with reward processing and pleasure.  They had two groups of volunteers.  One group had to work to get their money while playing a computer game and the other group just got money without having to earn it.
The brains of those who had to work for their money were more stimulated.  It seemed the brain was happier.

As a side note—some of the big lottery winners may not be happy because they blow through their winnings at a shockingly fast pace.  Some years ago, Oprah had me do a show about big lottery winners—the people who won over $100,000,000.  We found that the people Oprah had me work with not only squandered their winnings, but went on to declare bankruptcy.  In fact, the stats showed that over 90% declared bankruptcy.  I even coached a man who won over $100,000,000 twice—and blew it! Unfortunately, my advice began with, “What were you thinking? Are you kidding?”  Most of their  issues centered around their fundamental lack of any money savvy and their friends and family expecting and getting a share of the pie. (But twice? Come on!)

Ok, back to the study.  The study did show that people who won the lottery were not happier a year after they won.  We also know from other psychological studies that people get a great deal of satisfaction out of the work they do.  We also know that we were designed to work to obtain the things we need and want.  Without that stimulus, we can suffer from depression.  Take a look at our unemployment rates and the devastating effects it’s had not only monetarily, but in terms of people’s self-esteem.

The moral of the story—America, we want and need to work, we are not looking for the hand-out.  Congress, stop acting like spoiled children (sorry kids, I didn’t mean to insult you) and you need to get back to work and come up with solutions to our job crisis.

Where Do Those Kids Get Those Ideas?

There’s an interesting phenomenon that happens right about the same time that our children turn from our sweet little kids into Freddie Krueger, or monsters from outer space… We start turning into some kind of different creatures, too, often creatures that we don’t approve of all that much.

You know the person I mean. The mom that we smirked and rolled our eyes at in the store when we were teenagers—the one who was only there to buy some light bulbs, but somehow kept adding giant squirt guns, giant boxes of popsicles, and other stuff to her shopping cart as her kids kept goading for more.

And you know the kids I mean—the ones who know exactly what they’re doing. When I wrote Money Still Doesn’t Grow on Trees, I referred to something called the, “nagging factor”. That’s the number of times kids say that they have to nag a parent before he/she will give in and buy them what they want. Guess how many times they have to nag us? The answer is “Nine”.

And face it… kids in a store have nothing better to do with their time… torturing us is almost a hobby, or a way of life. And, if you don’t put a stop to it, you’re supporting the behavior—especially if you’re going to give in.

I know… saying, “no” is a tough. But how about if they nagged, “Gee Mom, I’d really like you to buy me some drugs? Please, please buy them for me?” Obviously, ridiculous… 9 times, 200 times, it wouldn’t matter. Let’s look at this, of course you’d say, “No.” It might make them happy in the short run, but you know the destructiveness in the long run—no choice.

It can be the same thing with material items. Not as awful, but it’s the same thing. Giving something to a child because they nag or beg is pleasurable in the short run to the child—and to you, if you hear, “I love you, Mom. You’re the greatest”—but in the long run it teaches a lesson that you don’t want to teach.

Giving in is all about guilt. We give in to our kids, and later to our teens, because we feel guilty for one reason or another, and pretty soon we’ve become people we don’t much like being.

Where does this guilt come from—especially in the middle of a recession? Let’s look in the mirror and see what messages we are sending to our kids. (In terms of the guilt—I’m a Jewish mother, so I’m comfortable with my genetics—if you’re not, see a professional!)

Saying, “No” is tough—but often necessary. Try it the next time the kids nag. “No” worked for our parents, we wouldn’t have dreamed to keep nagging. If you stick to, “No” and don’t give in and reinforce the “nagging factor” behavior, it should also work for you.

Let me know.

My Personal Look Back on the Anniversary of the Egypt Uprising

“The world is flat,”—a term used by Thomas Friedman.  To me, this means that we are all connected via instant communication.  In 2011, one example of this was global instant connect.  Young people discovered a flat world and found a global voice that said, “This is not okay.”  Of course, the local agendas had different twists, but the overall outcry was touched-off by the same phenomena—unemployment.  2011 was historically marked by the highest rates of unemployment among youth—(24% in Egypt, 50% in Greece, and 18% in the US)—according to Bloomberg Business Week, January 8, 2011.  There was a loss of faith in the system that used to promise our youth good employment after graduation from college.

Last year, I realized the impact of unemployment throughout the world while traveling in Egypt.  On January 27, 2011, I was caught in the middle of the revolt in Egypt. I was shocked by the violence and scared to death that I would be a victim to it.  I was stuck in my hotel, heard gunfire and smelled the smoke of the burning building all while huddled with my colleagues plotting our escape.  I was cut-off from the world.  I got to spend some time with the hotel staff and was equally as shocked at what I discovered.  ALL of the hotel staff—(I’m not talking about management. I’m talking about the people carrying bags to rooms, serving food in the restaurant and assisting behind the desk.)—not only had undergraduate and graduate degrees and spoke several languages, but ALL had two things in common: they couldn’t find any other jobs and they were thrilled to have these jobs.  By the way, they were sympathetic with the revolutionaries, but scared to take part.

What do these people in Egypt, California, New York and Greece have in common?  A crisis of faith in the system.  Listen up, Washington—Republicans and Democrats!  We won’t settle for the death of the American Dream.  We need jobs—NOW!

Dare to Go "Green" in 2012

Use this year’s resolutions to raise consciousness and also to really change your behavior.  We are coming out of one of the worst economic downturns in our lives.  Let’s use 2012 as a “do-over”–a look at our past should help to guide us to make different choices for the future.

There is no better time, then now…2012 will be a little different–we are going to add energy efficiency to our new list this year.  This is the best time to think about the environment and how we can do our part.  Let’s start with what I call, the ECO-Effect™.  This concept combines ECOlogy and ECOnomics together, so we can save money and resources at the same time.  In fact, my new book, ECO-Effect™: The Greening of Money, explains these concepts for parents and kids and gives you activities to help you also “ECHO” these ideas, so that parents talk to kids, to schools, to communities to the world to make it a better place for all living things.  How can you and your kids have your own “ECO-Effect™” for the New Year?  Start by showing your children your utility bills and let them come up with energy saving ideas.  For instance, it may be a good idea to turn lights off when you leave the room, or unplug all of those cell phone chargers and who knew that you don’t actually have to have a lengthy conversation with the refrigerator door opened?  Let the kids start this New Year by tracking the savings each month to really see your ECO-Effect™!