I'M SORRY ISN'T ALWAYS ENOUGH

Everyone knows that it's not good to break things. In most cases nobody means to do it, and most of the time the person who broke something is going to be sorry.  Breaking something that doesn't belong to you is a problem both inside the family and outside in the greater community.

Breaking something by accident isn't a terrible thing. Accidents happen. Sometimes they happen through carelessness, and that should be addressed; but sometimes they just happen. But in the case of breaking something an apology isn't quite enough. Restitution is needed, too.

You should try to restrain yourself from blowing up when something gets broken.  Yelling under those circumstances tends to send a message that things are more important than people.

The reward - or punishment - for behavioral matters should be behavioral; the reward or punishment - for material matters should be material. If you break something, you should pay for it, in time or money or both.  Not taking breakage seriously enough sends a damaging message, too: that it's not really important to respect the property of others.

I learned that lesson when I was about twelve. A girlfriend and I got a couple of brushes and a couple of cans of white paint and set out to write “Ringo for President”all over the streets in our neighborhood. We hadn't thought it through well enough to realize that Ringo was British and therefore ineligible to be president but that was actually the least of what we hadn't thought through. We believed we were using a water-based paint, but it turned out to be latex house paint.  We, of course, were convinced that we'd never get caught, but within an hour after we had run home and were listening to Beatles music and giggling, a policeman knocked at the door.  "Are you the two kids who painted up the street?" he asked.  We weren't cut out for a life of crime. We confessed immediately. "But how did you catch us?" I wanted to know, holding my hands out to be cuffed just like in the movies. The policeman smiled and pointed behind him. We looked. Across the front porch, down the steps, and out along the street was the evidence: our footprints in white paint, heading straight to the door.

We paid in both community service and money. I had to scrape every last “Ringo for President” off the streets with a wire brush, and I had to buy my own wire brush for the job.

You’ll want your children to understand that if they have friends over to visit, they’re responsible for their friends' behavior as well. If they take over the family laptop to play games, and one of the guests accidentally spills a beverage on it, and you're facing big bucks to have it fixed, your child is responsible for picking up the tab.

You're very likely to get a chorus of "No Fair!" on this rule. "Why am I responsible both ways? If I go over to someone else’s house and break something, I have to pay. If someone else comes over to my house and breaks something, I have to pay."

For an answer, refer your children back to the concept of "My House, My Rules."  This is the way we do things. If his friend has also been raised to be financially responsible, he'll assume the burden. But we have no control over the rules in other households, only our own.

What happens if a child breaks something that's far beyond his ability to pay? That can happen, and sometimes spectacularly. Here is an example.  A friend owned a 50 acre farm in the country.  She and her husband had a recently purchased tractor.  Her fourteen-year-old stepson and his and friend were visiting the farm. Somehow they had cajoled my friend into letting them try out the new tractor.  They promised to be careful, but the temptation to convert a piece of heavy farm machinery into a go-cart was too strong.

As fate would have it, they managed to steer the tractor directly into a pool in the middle of the farm.  They probably wouldn’t have been able to hit it if they tried. The damage to my friend: one ruined tractor; the cost of towing the tractor out of the pool and disposing of it; one polluted pool that had to be drained and restored by environmental professionals because the polluted water had to be taken away.

This story does not have a happy ending. The friend’s mother’s response was, "Gee, boys will be boys. Well, accidents happen." My friend never did find out what the other boy's parents felt, because they never bothered to contact her.

This was wrong. It was unfair to my friend, and it was letting the kids down, too, by sending them the wrong message. It was teaching them to be the kind of people we don't want our children to be.
This was a leviathan of a preventable accident caused by carelessness. It was destruction of property, and it was destruction of the environment. The monetary damage was well beyond any kids capacity to make financial restitution.  But the boys should have contributed something. They should have contributed enough money to feel the bite of it - a few hundred dollars, anyway - And they should have worked on the restoration of the pool.

YOU CAN NEVER BE TOO YOUNG

From the time our children are beginning to crawl we start teaching them about right and wrong, personal safety issues and morals.  Through the years we warn them about stranger-danger, alcohol and drugs.  We try to set good examples for healthy eating and personal accountability.  Why do so many parents neglect to teach their children one of the most important survival skills they're going to need – how to take care of themselves financially?

We certainly teach our kids about spending money, but this is setting them up for future failure.  Kids are constantly exposed to the emphasis on buying power but this comes at the expense of other important money skills that kids need to learn – earning, saving and sharing.

MONEY IN ACTION
Parents have to talk to their kids about money from a very early age as this is when good habits start to form.  It's important for kids to come into contact with money, learn where it comes from and understand how it is used.  Encourage your kids to play “store” at home.  Let them put coins in the parking meter.  Let them swipe the credit card when you get groceries.  Bring them to work with you.  Bring them to the bank to open a savings account.

I believe in allowances for kids who are ready to start doing age-appropriate things around the house, like watering the plants or setting the table.  It is important to use the allowance as a teaching tool.  It's never too soon to start teaching financial responsibility.  Even kids as young as 5 can benefit from the idea of budgeting – the child should set some allowance money aside to spend, some to save, some to share with the community.

This helps kids make better decisions and learn to delay gratification.  The time spend deciding what to buy with their own money, what to save for and what causes to contribute to also builds character.  Another benefit is valuable quality time with mom and dad.

Talk to your kids about money and keep talking to them about it as they grow.  The lessons learned will stay with them for life.

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.