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.