Shopping Alarms About Kids & Money: A Grocery Store Lesson

An alarm went off when my friend Yael recently paid for her groceries. It was a basic transaction. She paid for the food with a debit card and requested cash back.

However, when her pre-school son watched the exchange of plastic for food and cash, a siren sounded. "Mommy," he shouted. "You won a prize." Alarmed, Yael decided it was time to teach him more about money.

Nationwide, other parents are finding gaps in their children's financial education. For instance, according to a recent T. Rowe Price survey, nearly 60 percent of parents feel as if they should be doing more to school their children about finances. Here are a few lesson plans:

Child labor and allowances: My school-age children get a boost when they earn money from household chores, baby-sitting or lemonade stands, and it's not just about the cash. Earning and managing a few dollars improves their common sense and self-esteem. Such lessons can begin with toddlers, with small chores and rewards.


Shopping trips: Going to the grocery store with children typically leads to higher food bills. But the short-term detour around sugar cereals and other treats can create long-lasting "teachable moments" about unit-pricing, marketing gimmicks and nutrition.


New age tools: The Internet has a wealth of finance games for kids. My daughter, for example, has spent hours at http://www.webkinz.com/ and http://www.neopets.com/, which offer imaginary financial systems in which children earn salaries, build homes and make virtual purchases. The money is not real, but the lessons are valuable. Other sites include: http://www.thegreatpiggybankadventure.com/ and www.ustreas.gov/kids/ (from the Treasury Department).


Old school tools: A game of Monopoly can last for hours with lessons about saving, spending and investing. Over that board game, my kids have become savvy about the value of budgets and delayed gratification. It's not just about paper money or color-coded blocks of real estate.

Sales Clerk Offers Inside View: 'We're Supposed to Befriend Kids'

Do some sales clerks try to pal around with tween shoppers in an effort to get the kids to spend more money? Yes, says one reader, a sales clerk, who offers a great reply to the post: Telling My Daughter the Truth about Her New 'Friend,' The Salesclerk!

Here's one sales clerk's story:

I was hired about a month or so ago at a 'tween clothing store, and I've come to find it not so much my cup of tea. We're supposed to make "friends" with the girl and adult, or the girl[s], and try to sell them as much stuff as we can, by talking to them, or even looking at what they have, and bringing more stuff that matches/accessorizes/looks similar, and show it to them and so on.

I find it uncomfortable, personally, because while I love kids, and enjoy talking to the few people who are very friendly, I'm only supposed to be friendly enough to make the sale and make more sales while doing it, and that in itself makes me feel fake, seeing as we're supposed to make the store feel like a second home to the girls, but yet simply see them as consumers and a goal of how much money we can get them to spend?

I personally would get quite irritated with a sales person bringing me loads of stuff, and always have been that way, so I have a hard time seeing how so many people could like someone following them & constantly foisting things on them.

Just my rambling thoughts after an exhausting day at work.

-- written by MVanity

Thanks to MVanity for providing such a thoughtful comment. (@ MVanity: You make great points, and I appreciate your insider's view. Thanks for taking the time to write!)

As a shopper, I'm in the same bag as MVanity. I also get annoyed when I'm tracked through a store. But my pre-teen daughter can be flattered by the attention.

Thrifty Reader Seeks Help: Spoiled Kids & Too Many Yard Sales!

What do you tell a thrifty mom who thinks her kids are spoiled? That scenario recently landed in my e-mail box. Here's the note:

Hi, I am concerned because I finally realized how spoiled my kids are. I've been buying them whatever they liked, although it's from thrift stores and yard sales. Because it's so cheap, I get them more than five things.

I find my 8-year-old son being un-appreciative, unresponsible and rude, and I think this could be why. Now the house is full of toys, and I don't know where to start. How to unspoil? I am overwhelmed. Do you know what I should read? How do I start, please?

Please chime in with tips, links and resources. Thanks!

Cheated By a Ferret: One Child's Lesson

My daughter feels cheated by a six-inch stuffed ferret, which recently took a $4 bite from her allowance. But I believe the furry ferret provided a long-term investment in my daughter's financial education.

The back story: While shopping at a national chain store, my 11-year-old daughter stopped to watch an in-store infomercial, which featured an endless loop of a toy ferret executing tricks. On the screen, the toy looked so cute. "It had this invisible string," my daughter explained.

"The commercial showed it doing all these cool tricks and stuff," she said, adding that the ferret was tied to the transparent string that seemed invisible from a distance.

The reality: "The string broke the first time I tried using it," she said. "The ferret worked much better in the commercial."

Her $4-plus-tax lesson: "Commercials aren't always true."

As a parent, I learned the following lessons:

• Children (even teens and tweens) need adult supervision in stores.


• No matter how savvy you think your kids are, there's always more to teach and more to learn.


• Kids need decoders for advertisements, promotions and retail offers. Don't assume that your kid understands that strings are always attached. Something that is transparent to you may be a complete mystery to kids with money.


• It's important to let kids make minor shopping and spending mistakes with their money. In the ferret situation, the financial penalty delivered more value than any lecture I could have offered.

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Welcome ABC News Now Viewers: How to Unspoil Your Child

I recently had the pleasure of appearing on ABC News Now to chat about the subject of children and money.

The topic was prompted by this post: How to Unspoil Kids: A Crash Course from Money Magazine with insights from Linsey Knerl of Wise Bread, who has written a great piece about what we should tell our kids about money.

Here is a link to the ABC News video segment: How To 'Un-Spoil' Your Child.



Thanks to the folks from ABC for inviting me to appear.

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Sharon is the author of the Frugal Duchess: How to Live Well and Save Money -- a coming of age memoir about money -- and a contributing writer in Wise Bread's 10,0001 Ways to Live Large on a Small Budget.

Putting a Price Tag on Good Grades: Cell Phones and Cash Bonuses?

Extortion or an incentive plan? If a child asks for a reward for good grades is that extortion? If a parent pays a cash bonus for each "A" on a report card, does that bonus represent a bribe?

Those are a few of the questions that were debated among a few friends today when one parent shared the news that his award-winning 10-year-old son wanted a new cell phone as a reward for earning great grades and several top academic awards.

The father agreed to the cell phone request. But Anna, a mutual friend, was appalled by the cell phone-for-good-grades barter: "Kids are supposed to get good grades. They don't get paid for that," Anna said.

But in the work world, adults receive bonuses for meeting sales goals or for outstanding performances. Likewise, I know of a family that pays a cash bonus for great grades. It makes sense. Sort of. But I'm torn.

It's important for kids to make a link between hard work and financial rewards. In fact, I'll be discussing that topic on ABC News Now.com at 4 p.m. on June 4. I think children should receive bonuses for completing chores and small jobs around the home.

And I applaud a 10-year-old who is savvy enough to use an excellent report card as a negotiating tool. But I have mixed feelings about parents who give in to those demands. The scenario became even more complicated because the student asked his father to pick up the new cell phone immediately after work.

That demand was vetoed. The kid could wait until the weekend, the father said. As a friend, I nodded in agreement.
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Sharon is the author of the Frugal Duchess: How to Live Well and Save Money and a contributing writer in Wise Bread's 10,0001 Ways to Live Large on a Small Budget.

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How to Unspoil Kids: A Crash Course from Money Magazine

What do you give to a teenager who has a lot of stuff, including a $1,700 designer purse? The answer: A brown bag of reality.

The June issue of Money magazine offers an insightful and practical guide for parents seeking to "unspoil" their kids. The piece offers solid advice for parents who have lost income or face layoffs. Here's a quick overview:

The problem:

"We've been extravagant with our kids and ourselves," says one mom. "Now we're readjusting."

The solutions:

• Downsize birthday parties: Veto extravagant birthday parties.


• Fewer gadgets: Parents are declining to replace misplaced electronic toys.


• Yanking credit lines: Shopping trips fueled by plastic credit cards have been grounded.

How to correct bad financial habits:

• Full disclosure: With complete honesty, identify how badly your child has been spoiled and how you have contributed to the scenario.


• United front: Parents and other adults involved in a child's life have to stick to the same rules about money, spending, presents and other fiscal habits. Kids will exploit holes and inconsistencies in the financial network.


• Recruit the kids: Offer age-appropriate explanations and lessons about the current economic environment and family finances. Teach children and teens kids how to budget their money and allowances.


• Be a role model: Money offers a three-point plan for parents: 1) stop spoiling yourself, 2) be transparent about your own spending and saving priorities and 3) "stick to cash."


• Build strong work ethics: Household chores and part-time jobs create a solid connection between the value of hard work and the value of a dollar.


• Ignore whining: "As bad as you feel, don't cave," says Money magazine. "Doing so sends mixed messages and teaches that pushing back works."

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Sharon is the author of the Frugal Duchess: How to Live Well and Save Money and a contributing author in Wise Bread's 10,0001 Ways to Live Large on a Small Budget.

Graduation Present: A Financial Lesson Plan For Seniors

What Every Graduating Senior Needs to Know About Money," that's the title of this guest post from Consumer Credit Counseling Service:

"Here are a few things every graduating senior needs to know....

How to create a budget – Every high school senior needs to know how to create and stick to a budget. Start with the basics—help them analyze their spending habits, create financial goals, and set spending priorities. Work with them to develop a budget, estimating their monthly income from jobs, babysitting, allowance, etc., and monthly expenses—everything from entertainment, gas and insurance costs, cell phone, and other expenses that they are responsible for. If they are moving into an apartment with a roommate, they need to consider what would happen if that roommate suddenly leaves—how will they handle the bills on their own?

How to use a checking account – Whether your child is heading off to college or starting down their career path, they will need to know how to manage a checking account. Have them take responsibility for some of their own expenses, even if you are providing the income, and let them use their checking account to pay the bills. Have them sit with you when you pay the monthly household bills so they get an idea of what it takes to cover groceries, utilities, rent, and other expenses. Consider having them sign up for a CheckWise course at http://www.cccsinc.org/, which will help them learn to manage an account responsibly and may help them be approved to open an account at a local financial institution.

How to save – If your son or daughter doesn’t already have a savings account, help them open one. Then talk with them about developing a savings plan and setting aside a certain amount of their income each month for savings and to cover unexpected expenses. Consider matching some of their savings. This is a great way to teach them the relationship between building a savings account and the positive rewards that follow.

How to use credit cards – Many college students fall prey to credit card offers and quickly get in over their heads with credit card debt. Teens and college students should not apply for a credit card until they have a job. A responsible first step might be getting a debit card that is tied to their checking or savings account and will prohibit them from overspending.

How to protect their credit score – A credit score tells potential lenders how well you have used credit in the past and how likely you are to repay in the future. It impacts the types of loans you will be approved for and the better your credit score, the better interest rates you will receive. Have your high school senior pull their credit report. This can be done for free at http://www.annualcreditreport.com/. If they haven’t established a credit history, they might not have anything on their report, but it is a good idea to monitor the report on a regular basis. Remind them that a credit report is a record of their past financial transactions and that an important part of using credit wisely is to annually review their credit reports. Checking your reports helps you spot errors and serves as a safeguard against credit fraud.

“For most young adults and college students, it isn’t typically a single event that leads to financial crisis, but a lack of basic money management skills—skills they won’t likely learn in school,” said Jessica Cecere, president of Consumer Credit Counseling Service (CCCS) of Palm Beach County and the Treasure Coast.

“Common sense and goal-setting can put students in charge of their money and on a steady financial course. Parents need to take the lead in providing them with the information and hands-on practice that will lead to sound financial management down the road.”

--source: www.cccsinc.org

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9 Ways to Teach Kids About Money

A little while ago, I wrote about a little boy who thought money came out of walls (a visual image of ATMs.) The sluggish economy provides an ideal time to teach kids how to be savvy about money, according to Eric Tyson, a financial author.


Here's a guest column on the topic of kids and money, featuring 9 financial lessons from Tyson.


"With inflation on the rise (gas prices, grocery bills, health insurance premiums, etc.) and many companies being more conservative, more American families are feeling squeezed. So if you're feeling guilty because you can't buy your child that video game system he desperately wants or send him to that trendy summer camp, Eric Tyson has one word for you. Don't. In fact, he says, now is the perfect time to teach your kids some valuable financial lessons.

"Kids are surprisingly aware of what's going on in the world," says Tyson, author of the new book Let's Get Real About Money! Profit from the Habits of the Best Personal Finance Managers (FT Press, December 2007). "And if they don't know that times are a little bit tough and Mom & Dad are having to watch their spending, it's time to tell them. Sheltering kids from financial realities does them no favors."

Indeed, the opposite is true, says Tyson. A good grasp of personal finance is one of the most valuable life skills a person can have. And while previous generations may have been raised with the constant admonishment that "money doesn't grow on trees!," too many of today's parents neglect that lesson. It's time to change that—and the economic slowdown we're in now provides a great incentive for doing so.

"In many ways, a slower economy can be a blessing in disguise," admits Tyson. "It leads families to make a budget and stick to it. It forces them to be conscious about how they handle money. That's good for kids. It shows them how the world is supposed to work."


Tyson offers the following hints:


1. Realize that kids learn what they live. It may sound like common sense, but we are our kids' most influential teachers. When you ring up a barge-load of credit card debt, take out exorbitant mortgages or car loans, and fail to save anything, that's what your kids come to see as normal. If you are modeling unhealthy financial habits, you can't realistically expect your kids to "do as I say, not as I do."

"Adults who live it up now and fail to save for the future can expect to raise children who are accomplished spenders and poor savers," notes Tyson. "Be honest with yourself about the powerful money messages you're sending your kids. If your financial habits are poor, overhaul them now. You owe it to your kids."


2. De-program them. Kids are constantly bombarded with information about what things cost, whether it's the fancy sports car they like or the wardrobe of their favorite athlete or actor, not to mention the 40,000 commercials that the American Academy of Pediatrics estimates the average American child sees each year. What they aren't bombarded with is knowledge on how to manage money effectively. And while schools are increasingly incorporating money issues into the existing curriculum, the broader concepts of personal financial management still aren't taught. Frightening though it may be, some schools rely on free "educational" materials from the likes of VISA and MasterCard!

"These credit card titans provide materials that implicitly and explicitly support carrying consumer debt as a sound way to finance significant purchases and living expenses," says Tyson. "In fact, VISA and MasterCard school-supplied resources endorse spending upward of 15 to 20 percent of one's monthly take-home income to pay credit card and other consumer debts! Explain to your kids that such spending puts a lot of money directly into the credit card companies' pockets, so of course they're going to offer that advice...but that smart people don't listen to it."


3. An allowance is a great teaching tool. You don't have to break child labor laws to find great ways to help your kids earn their allowance rather than just have it handed over to them. A well-implemented allowance program can mimic many money matters that adults face every day throughout their lives. From recognizing the need to earn the green stuff to learning how to responsibly and intelligently spend, save, and invest their allowance, children can gain a solid financial footing from a young age.

"A great time to start is when your kids reach the five-to-seven age range," says Tyson. "Start them on some household chores, and explain to them that they will be paid for their work. Of course, the size of the allowance should depend, in part, on what sorts of expenditures and savings you expect your child to engage in and, perhaps, the amount of 'work' you expect your child to perform around the house. I recommend paying $0.50 to $1.00 per year of age. So, for example, a six-year-old child would earn between $3 and $6 per week."


4. Start them saving and investing early. It's never too early to start saving, and the sooner you can instill the importance of saving money into your kids the better. After they start earning an allowance, have your kids save a significant portion (up to half) of their allowance money toward longer-term goals, such as college (just be careful about putting money in children's names as doing so can harm college financial aid awards). Tyson recommends that children reserve about one-third of their weekly take for savings. As they accumulate more significant savings over time, you can introduce the concept of investing.

"Rather than trekking down to the boring old local bank and putting the money into a sleepy, low-interest bank account, I prefer having kids invest in mutual funds," says Tyson. "Another option is for kids to buy individual stocks. Kids can learn more about how the financial markets work and understand stocks better by sometimes picking individual stocks rather than using funds. Just be careful to keep transaction fees to a minimum and teach your kids how to evaluate a stock and its valuation and not simply buy companies that they've heard of or that make products they like. The money they are able to save and invest will be a huge help to them later on in life."


5. Reduce their exposure to ads. The primary path to reduced exposure to ads is to cut down on TV time. When kids are in front of the tube, have them watch prerecorded material. You can direct the television viewing of younger children, in particular, toward videos and DVDs. And for older kids, if you use digital video recorders (DVRs), such as TIVO, you can easily zap ads. But when an ad does sneak under the radar and set the kids to begging, address it. Explain to your kids that there's never a good time for frivolous impulse spending—but it's especially harmful when money is tight.


"Invest the necessary time to teach and explain to your kids that the point of advertising is to motivate consumers to buy the product by making it sound more wonderful or necessary than it really is," says Tyson. "Also explain that advertising is costly and that the most heavily promoted and popular products include the cost of all that advertising, so they're paying for it when they buy those items."


6. Find entertaining ways to teach good money habits. You'll probably be facing an uphill battle when trying to get your kids to sit down and learn about personal finance. That's why it's so important to find entertaining ways to instill good financial habits in them. For younger kids Tyson recommends age-appropriate books like The Berenstain Bears Get the Gimmies. For late-elementary-school-aged kids, Quest for the Pillars of Wealth by J.J. Pritchard is a chapter book that teaches the major personal finance concepts through an engaging adventure story. You could also get them a subscription to Zillions, a kids' magazine from the publishers of Consumer Reports, which covers money and buying topics.


"Another great opportunity to teach your kids about personal finance and get to spend quality time with them in the process is through board games," suggests Tyson. "Monopoly and Life are two games that are very effective at getting your kids to think about the best way to manage money and plan whether they should spend or save."


7. Teach them how to shop wisely. Family shopping trips, whether for groceries or something else, are likely to be your kids' first encounter with spending. They'll see you make decisions based on what the family needs, maybe see the occasional coupon used, and will observe how you pay. These trips are a great time to teach them lessons about money.


"Explain that being a smart consumer requires doing your homework, especially when buying more costly products," says Tyson. "Teach your kids the value of product research and comparison shopping. Demonstrate how to identify overpriced and shoddy merchandise. Finally, show them how to voice a complaint when returning defective products and go to bat for better treatment in service environments, two additional tasks that are part of being a savvy consumer."


8. Introduce the right and wrong ways to use credit and debit cards. Those plastic cards in your wallet offer a convenient way to conduct purchases in stores, by phone, and over the Internet. Unfortunately, credit cards offer temptation for overspending and carrying debt from month to month. Teach your kids the difference between a credit and debit card, explaining that debit cards are connected to your checking account and thus prevent you from overspending as you can on a credit card.


"Explain to them that credit cards should be used sparingly and then practice what you preach," says Tyson. "Wean yourself off of using your credit card, and tell your kids why you've decided to do so."


9. Encourage older kids to get a job. An allowance doesn't have to be the only way for your kids to earn money. Your child's initial exposure to the work-for-pay world can start with something as simple as a lemonade stand. Depending on age, he or she might do yard work for neighbors or offer babysitting services. And the fact that we're in a recession makes it all the more appropriate for older kids to "help out" by getting a part-time job—especially to fund unnecessary purchases like DVDs or cool clothing.

"I had an extensive newspaper route for a number of years, and I cut lawns and did other yard work during high school and college summers," says Tyson. "By holding down such jobs, kids can learn about working, earning, saving, and investing money. It also provides welcome relief for parents to not continually be the source of spending money. Working outside the home does raise some safety issues, so by all means be involved in ensuring that your child has a safe work environment."

Besides the learning opportunities it presents, there's another positive to the economic downturn, says Tyson. It forces families to be more thoughtful about how they spend their time—and this often leads to the stunning realization that money really doesn't buy happiness.
"Often, the pricey toys we buy for ourselves and our kids and the lavish vacations we take are simply distractions from the people we love," he says. "They send the message that it's necessary to spend a lot of money in order to have a good time. It's not, of course. The best things in life—friends, family, quiet evenings at home just being together—really are free. Sometimes it's good to be reminded of that."



--Eric Tyson

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Ask for Camp Scholarships! Money is Out There

While researching two education stories for the Miami Herald, I've discovered that money is out there for kids. Many camps --Spring Break mini camps, after-school camps and Summer Camps-- offer a wide variety of program discounts. But in some cases, there's a big catch: You have to ask.

I've had directors at expensive, private day camps, inform me that registration fees and tuition costs can be waived for families that need help. But that information is sometimes whispered or delivered in very hushed tones. (A private camp may not want to be swamped with scholarship requests or may lack the staff to review inquiries.) But there are full scholarships, partial fees, sibling discounts, early-registration fee cuts and other discounts. There are also resident, neighborhood or membership-only tuition breaks.

Some camps award financial packages based on standardized forms and "needs test." Other camps only ask for letters requesting scholarships or discounts. "There's no child left behind,"said one camp director. But he acknowledged that although fee-discounts are available, the burden is on each family to request assistance.

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Losing $30K in a BF's Hedge Fund & Other Big Goofs With Money

One woman lost $30,000 the old-fashioned way. She gave it to her boyfriend to manage. She invested in a hedge fund run by the dear BF. He's now sitting behind bars (grand larceny and securities fraud) and she has a fat $30,000 deficit in her accounts.

That's just a snippet of the great financial stories from the 12-page special section on "Women & Wealth" in the February issue of Town & Country.

My Reality Check: I can't relate to the size of the losses experienced by some Town & Country readers, but if I chop off a few zeroes, I can relate to the process. For instance, one reader regrets running through a $50,000 inheritance by spending "on inconsequential things." Likewise, about 10 years ago, we received $5,000 when an older relative passed away. We didn't waste all of the money, but I don't remember how any of it was spent. I wish we had just invested the entire sum.

Here are other major financial confessions from T&C readers.

• Overreacting to stock market turbulence: After stock prices dramatically fell in 1989, one reader quickly unloaded a large portion of her investment portfolio. She was terrified that the securities would quickly become worthless. The Lesson: She realized that if she had thought and waited, she would have realized that her portfolio -- a collection of "sound investments" -- would have bounced back. "I would have been much better off," she told T&C. I've also made rapid-fire decisions that I have later regretted. Panic rarely produces smart long-term moves.


• Fashion slave: A trendy closet can exact a hefty penalty, especially when a shopper heavily invests in expensive trends. "I've had to give more out-of-date clothing to charity than I want to admit," one reader confessed. The Lesson: Buy classic clothing. Don't heavily invest in flavor-of-the-month trends. If you have to buy trendy stuff, shop at deep discount stores.
  
  
• Retail Therapy: "Using retail therapy to entertain myself during my forties, instead of applying focus and discipline with my earnings." -- T&C reader. Don't get me started on this topic.




• Delayed retirement planning: "Not understanding in my twenties to invest in my own future.....I started when I was 33. Big Mistake!"-- T&C reader.




• Star-struck by a well-known broker: One reader was overly impressed by an investment adviser from a high-profile firm. Feeling star-struck, she let herself be led into a risky money market account that was created by that firm. The account was touted as a high-returning investment vehicle. The reader lost 50 percent of her assets in that account. The Lesson: "[I] have never followed the financial advice of a supposedly licensed adviser again. I do my own research and invest in known, solid mutual funds with a long history of results."--T&C reader




• Delegating inheritance decisions: One woman failed to take "an active role" in handling her inheritance. The Lesson: "After two lawsuits, I prevailed but lost a lot of innocence, time and the ability to trust the 'good intentions' of family." --T&C reader.

The other major mistakes related to women who invested too much faith in the investment decisions made by the men in their lives, including ex-husbands. More about that in a later post.

Hey Cinderella: Buy Your Own Glass Slipper & Other Tips from Town & Country Readers

Don't wait for the Fairy Godmother or Prince Charming to deliver the glass slipper or other trophies of wealth & status. Don't expect fairy tale endings and don't pretend to be Cinderella. That's just a snippet of the great financial advice from the 12-page special section on "Women & Wealth" in the February issue of Town & Country.

I purchased my copy at the drugstore, but many libraries also carry subscriptions. Or go to your favorite bookstore, where they let you read the magazines for free. The Feb. issue of T&C is a good read for anyone (including the guys) with an interest in building and maintaining wealth. The special section includes: Best Advice I've Ever Received About Money, which features tips from readers. Here's a summary:

1. College Plan for Baby Cinderella: One reader told a touching but insightful tale about her dad, who died when she was four. One day, he read the classic tale Cinderella --you know the deal: the girl, the slipper, the fairy godmother and the prince. Here's what happened when the pre-schooler's dad completed the fairy tale ending about financial salvation through marriage:

The Little Girl:"But what if the glass slipper didn't fit her?"

The Dad: "That's why you're going to Wellseley, so you can always buy your own glass slipper."

2. Keep yourself warm: Scenario: A 20-something woman told an older female friend that she wanted a man to buy her a fur coat. The mentor's advice: "Be able to buy your own fur coat."

The outcome: After receiving that savvy advice, the younger woman ultimately earned enough money to buy three fur coats for herself.

3. The Stocking Hedge: One reader reported that her mom told her to hold onto different shares of stock as a "financial hedge."

The outcome: Those shares, the reader reported, "have consistently paid."

4. Establish a stock-loss point: "I was once told that when your stock is down, you have not lost unless you sell." --T&C Reader

The outcome: She learned to establish stock-loss points and exit strategies for investments. Here's what the reader says: "I watch my stock and set a parameter to be met before I am willing to part with it."

5. The Intersting Beauty: Scenario: One reader told a story about how -- when she was in third-grade -- her stepfather established a bank account for her with $100. Every month, he showed her the bank statement and pointed out how much money her money was making in interest.

The outcome: "This taught me early on the value of compound interest and being aware of my own money." -- T&C Reader

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Sharon Harvey Rosenberg is the author of The Frugal Duchess of South Beach: How to Live Well and Save Money... Anywhere!, which will be published in the Spring of 2008 by DPL Press.

6 Ways Going Back to School Can Pay Off

Going back to school for a graduate degree can increase your earning power and provide other professional bonuses. In this article (Six Reasons to Return to School in ’08,) writer Vicki Salem outlines why a degree represents a good investment.

A few months ago, I enrolled in a master's program for personal and professional reasons. During informal chats with fellow students, I realized that many of my peers had similar objectives. Here are the six reasons outlined in the article, with my own observations tossed in.

1. New Job; New Career Direction: Many of the fastest-growing careers, require a bachelor's degree or higher. For example, my goal of teaching on a college level requires at least a master's degree.

2. Salary upgrade: Many pay scales are linked to education. Getting a higher degree can lead to a higher paycheck.

3. Better marketability: In a competitive job market, an advanced degree can provide an edge.

4. Personal goals: A few of my classmates enrolled in our master's program just for "personal fulfillment." And honestly, even if I don't go on to teach on a college level, earning a graduate degree still represents one of my personal goals.

5. Networking: The academic community provides an excellent setting for networking, with well-connected experts in different fields. In the writing business, for example, many writing instructors have contacts with editors, publishers and agents. Professors are also excellent mentors and a valuable source of job leads and insights. Classmates are also a bonus.

6. Personal investment: I loved this quote from the article:

"Education is an investment that always pays you back," assures Dr. Susan Aldridge, president of University Maryland University College. "Housing prices may decline and stocks may plummet but an education lasts a lifetime -- bolstering your earning potential, enriching your intellectual life, and paying big dividends in personal satisfaction.”

My other reasons for returning to school:

1. Feedback: I've been working on a short-story collection and I submitted short stories to fulfill some of my class assignments. Getting feedback from instructors provided valuable insights about my work and material.

2. New information: While fulfilling class reading and research assignments, I acquired information, data and insights that were helpful with my assorted creative writing projects. Not only did I enjoy the formal lectures, but I also valued the comments and discussion offered by classmates.

3. New contacts. It wasn't just about career networking. Enrolling in a graduate program helped me to make new friends and to chat with a wide range of professionals that I would never have met otherwise. We all had different backgrounds, but a common interest in a liberal arts education.

Money From the Wall: Child's View of ATMs & Credit Cards

Money doesn't grow on trees, it comes out of a wall. That's how one child explained finance to his parents, who are friends of mine. Savvy about money, my friends were a bit alarmed about their 9-year-old son's view of money. During a recent car ride, the father told me how he's trying to give his son small doses of fiscal reality.

The Scenario: The wake-up call rang when the 9-year-old proudly announced that he wasn't going to work for a living.

Father: Why not?

Son: I'm going to get one of those plastic cards that you have. When I need something, I'm just going to use the plastic card and sign my name.

The Aftermath: The father, who works in the finance industry, reviewed his shopping and spending transactions. He realized that his son -- an elementary school student -- had closely watched his parents make purchases at restaurants, stores and other locations. From a child's view, the transactions seemed simple: Show the plastic card and receive stuff for free. Why work for money when you have a plastic card?

The Solution: When the next credit-card bill arrived, the father opened the bill with his nine-year-old. Here's their step-by-step financial lesson:

• The Account Numbers: The father pulled out the family credit card and asked his son to find the numbers on the plastic card. To make the connection between the credit-card statement and the plastic card, he asked the child to match the numbers on the plastic bill with the account numbers on the bill.


• The Balance Check: The father showed the 9-year-old the monthly credit-card balance. Well-schooled in math, the child was shocked by the large dollar figure. To drive the point home, the father explained that all of the things that had been purchased with the plastic card had to be paid for each month with real money from the family's bank account.


• The Bank Lesson: The father explained he wrote checks to pay monthly bills, including the plastic bill. That lesson took a while because the son argued that checks were just paper and he could just sign his own papers to pay for the plastic. Next: The dad tried to explain how the banking system worked.

After listening to a lesson about credit, interest and banking, my friend's child nodded and came up with another solution.

"I'll get another plastic card," he told his father: "I'll get the plastic card that makes money come out of a wall."

I'm sure that the father offered a very thoughtful and detailed explanation about automated teller machines, but our car ride ended before he finished telling the story. Meanwhile, I had a lot to think about anyway. I wondered what kind of unspoken messages about money, spending and family finance that I have delivered to my children.

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Previous Posts

Mutiny: Rebellion Against Used Party Clothes: Frugal Event Planning Guide Pt.2

Frugal Lessons from Luxury Shoppers: 3 Basic Questions Before Paying

Fourth Grader Joins Flea Market, Hires 4 Employees, Sells Crafts and Prints Money
Full-Time Teacher, Weekend Cook: Part-Time Jobs To Pay Bills

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Sharon Harvey Rosenberg is the author of The Frugal Duchess of South Beach: How to Live Well and Save Money... Anywhere!, which will be published in the Spring of 2008 by DPL Press.

Fourth Grader Joins Flea Market, Hires 4 Employees, Sells Crafts and Prints Money

Small bottles of Purrell hand sanitizer sell for $1 million. Erasers are cheap: just $12. My fourth-grade daughter is part of informal flea market in her all-girl classroom. During recess, lunch and free time, these girls sell real stuff: school supplies and trinkets with paper money that they made themselves.

At first, my daughter -- Miss Old Soul in a tiny body -- thought her classmates were out to lunch. Why would you sell good magic markers for fake paper money? That was her question, but as enviable products exchanged hands, she felt locked out of the paper market. The outcome: in the last few days, she has found her own niche, printed money, set up a store, interviewed employees and made a ton of paper money. And she's purchased a lot of cool stuff.

I laugh. But who am I tell her that her money is not real, especially since she has purchased markers that really work. And she is making a fortune in her toy pet store. In only two days of operations, she's made more money than I have in my lifetime.

My daughter gave me a two-part interview -- interrupted by bedtime -- and here are her thoughts.

How was the market?

A. I sold a lot and hired four employees. Business was all the way until the door. That's why I got employees. I needed help.

How did you hire people?

I had interviews during recess. You don't just hire your friends. You hire people who are qualified for the job.

How does the market work?

We pretend that we're grownups.

But, hello, you use paper money...

Even though it's just paper money, which we draw, it feels like real money because we get to buy stuff.

What do you sell?

I have a pet shop. I make pets out of pipe cleaners. [Mom's comment; she makes little poodle pets by twisting pipe cleaners into different shapes.]

How did you get the idea to sell those little pets?

I just make stuff. I just used to give it to them for free. Now I'm getting very good business. Everyone asks me to make them one.

What are some of the big sellers in the other stores?

It depends. Purrell bottles sell for $1 million. Erasers sell for $12. I bought a whole box of markers. I bought them for $1,000.

Q. What's your best bargain?

I purchased a color-twisting thing. It's a crayon that changes color. It really colors. I paid $2. She [the seller] just started out and didn't know better.

Q. How did this market start?

It's funny how it all happened. One girl started selling good supplies for paper money. And now there are more than 10 stores in our class. It's like having a mall in the classroom. It's really fun.

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Previous Posts

What Gas Leak? Mom's Nose vs Car Dealer & $49 Service Bill
Party; Small Budget: A Frugal Event Planning Guide: Pt. 1

Full-Time Teacher, Weekend Cook: Part-Time Jobs To Pay Bills

How to Get More Value From Your Home

Squeeze In Exercise Without Spending Lots of Time & Money

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Sharon Harvey Rosenberg is the author of The Frugal Duchess of South Beach: How to Live Well and Save Money... Anywhere!, which will be published in the Spring of 2008 by DPL Press.

Yes! You Can Be Too Thin & Too Rich: My Trust Fund Problem

I'm not rich, but I was always super-skinny. In my own way, I was a Trust Fund Baby --I always trusted that I would be a thin babe. But my new weighted reality is a roll around my middle. But it's made me think about the role of discipline, gifts and trust funds in our lives.

Here are my stats: At five-foot-one, I was under 90-pounds and almost-anorexic. For years, while other friends dieted and counted calories, I secretly smirked. I lost weight just watching them figure out portions, points and fat percentages. (zzzzz) I ate whatever I wanted, whenever I wanted. The result: I was clueless about the discipline of dieting.

I've had a painful wake-up calls. When I was pregnant with my first two children, my weight was normal, but I developed gestational diabetes. My doctor put me on a low-sugar diet! Ha! Thankfully, when I had my youngest child, I discovered the beauty of lots and lots of exercise. I was in my 40th year, but I had an easier time with my last pregnancy because exercise kept the demons of diabetes away. Through exercise, I could eat whatever I wanted and still keep my blood sugar at healthy levels.

But now at 49: I exercise like crazy. But if I'm not careful with food, I'll hit the scale at 115 or heaven forbid -- 120 pounds -- which is a far cry from my 90-pound, 30-something body. Now, when I weigh myself at the supermarket, I look over my shoulder first to make sure no one is around. These day I could run a marathon and still gain weight from the scent of Powerade. It's so not fair.

Money is the same way. It's not fair. Some of us have too much; some of us have too little. But there's always a role for financial discipline.

For example, I know real trust fund babies (TFBs), who have become successful adults because they were well-schooled in the art of fiscal discipline, hard work and self-reliance. In fact, in New York I knew one TFB, who could not touch the fat trust fund unless she was well-employed. Bottom Line: The unearned money was tied to earned money. That woman was one of the hardest working people I ever met.

But I've met other TFBs who sat in cafes or wandered from job-to-job without purpose or drive.
The Lesson: You can be too rich and too thin. There is a value in struggling with money, diet and discipline.

I've learned:

• Don't rely on unearned gifts. Good looks, thin bodies and fat bank accounts are gifts that can prevent one from developing other important skills or traits. Develop discipline early because gifts of nature and time can be easily squandered or taken away.

• Don't take anything for granted. Back in the day, I could eat two servings of chocolate mousse cake and lose weight from chewing. Unfortunately, I took my fast metabolism for granted and never developed eating control habits. I now have a fat learning curve and a slow-burn calorie rate.

• Update your self image: Yeah, at one point in my life, I may have been slightly anorexic. I ate desserts, but little else. That's true. Ask my parents. But those days are clearly gone. In fact, I'm going to stop telling folks that I used to be super skinny because they think I'm making a funny.

• Acknowledge reality: I need to save more money. I need to earn more money. I need to eat less. Failure to do either of those three items will result in a horrible bottom line. Let's not go there.

• It's never too late: Even as I approach my 50th birthday -- it's in July, watch this space! -- I can still acquire dieting skills and better food control habits.

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Previous Posts:

I Earned 20% More After Reading This Book

I Won't Eat or Spend While Standing Up

DIY Invitations: Bar Mitzvahs, Weddings & Other Formal Parties
What is Luxury? Town & Country: Luxe is a Moving Target

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Sharon Harvey Rosenberg is the author of The Frugal Duchess of South Beach: How to Live Well and Save Money... Anywhere!, which will be published in the Spring of 2008 by DPL Press.

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Free Online Typing Drills: 10 Frugal Business & Craft Classes

Typing -- our daily dance on the keyboard-- is crucial to nearly every profession. It's a skilled I reluctantly learned in high school. To brush up on my typing skills, I've tapped into a free online program that has timed typing drills.

It's called Nimble Fingers.com and I found the program one day when I was trying to find an activity for my nine-year-old daughter.

She enjoys the typing drills, which feature increasing levels of difficulty and her typing skills are improving. I've tried and liked the program. In addition to typing drills, there are also other frugal ways to improve career and life skills.

Here's my list:

1. Community seminars: Many cities, libraries and community centers offer mini-workshops taught by different experts. The classes are either no-cost or low-cost. I've attended seminars about finance and securities, anti-money laundering, poetry and non-fiction craft courses.

2. Community colleges: I once attended a six-week poetry class offered at Miami-Dade College. The college also offers a wide selection of business, language (conversational Spanish and Chinese) and career development courses. I was surprised at the wide assortment of classes and the frugal prices. Throughout the country, community colleges provide an extensive list of affordable classes.

3. Regional conferences and summer programs: As a writer, I've attended literary conferences in Salt Lake City, New York, Key West and Pittsburgh. These programs usually take place over an extended weekend or within a week and provide an excellent opportunity to network and grow. Beyond writing, I've spotted interesting programs in various niches and markets.

4. Parent education programs: I'm very impressed with my children's school, which is offering free computer, language and spiritual growth classes to parents at convenient hours. Likewise, other schools and PTAs offer a menu of classes on first aid, parenting and other family-home topics.

5. Enroll in a graduate degree program. From Saturday-only MBA programs to summer-only/evenings-only degree programs, there are many options for adults who want to learn more while working full-time. In the writing profession, there are also a wide assortment of low-residency MFA programs. ("Top Ten Questions Writers Ask - Should I pursue an MFA?") There are assorted scholarships and financial aid packages for adult students who are continuing their education.

6. Free online courses. Many universities are posting a full menu of undergraduate and undergraduate courses online for free. (More on this later.)

7. Books on tape. A lot of business management mavens recommend books on tape: The theory: while you're driving, cleaning or doing some other task, pop in a tape on self-development, sales or some other topic. Many libraries and community centers offer a free supply of tapes to borrowers.

8. Expansive reading: "Daily reading on a wide variety of subjects will not only expand your knowledge, it will have an amazing impact on your life."--Weekend Millionaire Mindset by Mike Summey and Roger Dawson.

9. Free programs at bookstores and libraries: Authors, experts and teachers often give different presentations at bookstores and neighborhoods. These talks are usually free and most bookstores/libraries provide monthly programs at the front desk.

10. Retail chains: Craft stores, hardware stores and home improvement chains offer a long list of free or low-cost classes. For instance, in the home improvement area: Lowe's and Home Depot offers several courses on DIY projects. Likewise, there are also free craft courses at Michael's. The programs, including DIY online how-to libraries and videos, are usually listed on the main index. You may also have to plug in your zip code to find the store near you. Once on the local tab, scroll down for events in your area.

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My Jane Austen Biz Plan: 10 Smart Career Moves: An English Major's Aria

I'm not just a Bubble Head or (Bobble Head) and my English degree has paid handsome dividends. That's because Jane Austen has made me a business maven. Tutored by Jane, I've become more than an air-head in training. This post is the flip side of an earlier post:

Typing Class Regrets: My 10 Career Goofs: An English Major's Lament!

10 Smart Career Moves: An English Major's Aria

1. In Praise of Typing 101: In high school during the 1970s, typing class represented an academic detour usually reserved for future typing pool candidates of America. I was in the Honors Track, with no intention of joining the Pink Collar Ghetto. But Jane Austen taught me to have a broader mind. Many of her heroines-- even the wonderful Elizabeth Bennet -- had practical skills. So in a fit of practicality, I tapped into my inner typist during my teen years by enrolling into Personal Typing 101. I didn't take the class seriously; I underperformed, but I acquired a very marketable skill that I use every day.

Bottom Line: 1) I owe a huge debt to my teenage self. 2) Big air kiss to the little girl in the Big Afro (that's me at 17 in the photo) for learning that Big Hair doesn't translate into a little brain.

2. In Praise of An English Degree: Of course, I should have taken a few management courses. But here's the reality check: I would not have a career to manage in 2007, if as a college sophomore in 1977, I had not elected to major in English Lit at Georgetown University.

As an English major, I learned to write effective papers and to analyze texts. What's more, I learned to keep an open mind, which led me to ultimately pursue lessons about investments, real estate and wealth management. Money, I realized, plays a major role in every Jane Austen novel.

Bottom line: Before I learned to write about money, I had to learn to write. Thank you, Jane.

3. Internships: Sure, I should have landed an internship during my undgergrad years. But right after graduation, I landed a paid internship at a PBS station in Washington, DC. That opportunity led to a full-time job in television news. And during my early 20s, I kept learning from several mentors.

For example, on weekends (during my off-hours), I used to tag-along with a talented weekend news team, who provided valuable insights about writing and reporting. They taught me the importance of having an eye for details and an ear for accuracy.

Bottom Line: It's never too late to be an intern. Learning is an ongoing process.

4. The Big Duh! Factor: I've always kicked myself for failing to join the school newspapers in high school or college. Well duh: by default, I became almost as well-rounded as Elizabeth Bennet from Pride and Prejudice. Lizzie sews, walks, sings, plays the piano and reads a lot.

Bottom Line: It's important to have a diversified portfolio of income, talent and assets. My ADD tendencies have yielded diverse opportunities.

5. Graduate School: So what if I waited until age 49 to enroll in a graduate degree program? It took me that long to figure out what I really wanted to study. And after years of debating over a the merits of a law, MBA or a teaching degree, I've gone back to my academic roots: I'm now enrolled in an Interdisciplinary Liberal Arts masters program. It's Shakespeare, Renaissance Art with a bit of math and science thrown in.

Bottom Line: It takes a brain to be a scatterbrain.

6. Wall Street: Who knew business would become one of my passions? But consider how long it took Elizabeth Bennet to realize that she really loved Mr. Darcy. (Fitzwilliam Darcy). Life is full of surprises and unexpected plot twists.

Bottom Line: Don't write off any chapter. Don't discard any section of the newspaper or electronic new readers. Today's headlines could be tomorrow's pay check. Yesterday's heartbeat could be today's pulse.

7. Beauty obsessions: All of those hours I spent in beauty salons and day spas have paid unexpected dividends. Driven by all of that wasted time, I've become very efficient with time.

And I've become very skilled at doing my own hair and if the writing gig ever fails, maybe I'll go to beauty school and open my own day spa. I'll call it: The Beauty Business Suite Duchess.

Bottom line: My nails wouldn't be so hard today, if I hadn't polished and buffed them yesterday.

8. Self-help relationship books: Honestly: I wish I had that little memory-deleting gadget that Will Smith used in Men in Black. Armed with that device, I'd purge my system of about 5,000 pages of 1980s era Poor-Little-Me self-help relationship books. Fortunately, going back to my English major roots has helped. I'm encouraged by Pride and Prejudice because Elizabeth Bennet ultimately balances her emotional accounts and faces her lack of self-honesty.

Bottom Line: You are what you read and I've been reading a lot of books on business, literature, meditation, Torah and more. And of course, lots of Jane Austen and Toni Morrison.

9. Computers: After a slow start as a Luddite, I've re-invented myself as a high-tech babe. My keyboard is my professional life line; the DSL connection is my economic umbilical chord.

Bottom Line: A slow Internet connection is better than no connection at all.

10. Geeks at the dinner table: A scientist who came to dinner chatted about the Internet in 1991. After ignoring his chit-chat about the electronic highway (zzzzzzz), I eventually woke up and learned to travel in Cyberspace.

Bottom Line: When my bubble head popped, I enjoyed the pleasure of finding my brain.

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Book Shop of Fear
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Beyond Bag Ladies: Financial Road Kill Dangers

Last week, I wrote about my bag lady fears, a gender-specific syndrome that hits many women. But the financial road kill designation is a gender-neutral term that I have recently picked up from reading The Weekend Millionaire Mindset by Mike Summey and Roger Dawson.


"If your destined to be financial road kill on the financial highway you probably fall into one of two categories," according to the authors of The Weekend Millionaire Mindset .


Road Kill Alerts:


1) You move too quickly and fall for ill-advised money schemes, jackpot fantasies or other delusions. You, like many of us, have financial (Attention Deficit Disorder) ADD.


2) You move too slowly and spend your life working for steady wages, but with no real payoff or security. Basically, you're stuck in a risk-adverse rut. (I call it RAR!!!). This form of road kill, according to the Weekend Millionaire Mindset is too conservative to really achieve financial independence. Basically, with golden handcuffs we get chained to a desk. It's like share-cropping in that we never really get ahead.

I find that scarier than the Bag Lady Syndrome because financial road kill seems sneakier. A bag lady looks or acts like a bag lady. Even the bag ladies in pretty clothes (my personal nightmare) look a little off. The signs of disorder are there and in your face.

But financial road kill seems more dangerous to me because I could be actually dressed for success (with the right clothes, toys and home) but could be secretly stalled on the economic highway.

It's also a scary turf because many of us have been there. Indeed, when it comes to financial decisions, many of us --me too! -- have either moved too quickly or too slowly. Bottom line: I've had moments, episodes, years when I could have been a poster child for financial road kill.

Here's my anti-road kill strategy:

1) Be honest. It's bad to lie to other people. It's horrible to lie to yourself. I try to be 100 percent honest about what I'm really saving, spending and earning. That means even if I'm lying to myself, I understand that I'm lying. It's a constant dialogue that goes like this: No, Sharon. You don't need another skirt or to eat out tonight. And quite frankly, I'm still trying to spend less, while earning and saving more.

2) Understand that mistakes happen. I used to play the violin. And when I messed up in one measure, I'd be so upset that I would miss later notes. Quickly, my entire performance would deteriorate. Now if I over-shop or under-save, I try to accept and learn from my mistakes. There's no profit in beating myself up. That's a road kill move. It's better to just get up and keep moving. But look both ways next time.

3) Read a lot. It's really profitable to learn from other people's mistakes. I read magazines, blogs, newspapers, newsletters and books on money management and personal development.

4) Create a balanced plan. It's like Dancing with the Stars. If the ballroom dance routine is too easy, too risk-free, the performers lose points (Road Kill Alert). But if dancers try to do too much, too soon or if steps are too risky for their level of expertise, the dancers fall, trip or stumble: (Road Kill Alert!!) I try to be mindful of that balance between risk and reward when I plan my work assignments, spending and earning.

5) Constantly invest in myself: I've attended writing seminars, industry conferences, financial planning sessions and now graduate school. I invest in technology and professional tools. As a moving and higher-educated target, maybe I'm less likely --I hope to be--road kill.

Here are a few articles that are helpful

From Personal Finance Advice: How I Take Frequent Vacations on a Limited Budget

From My Investing Blog: How can I make more money?

From Need To Be Debt Free: Our Zero-Based Budget for December 2007

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My Son's $10 Suede Sneakers from Target: Flexing Frugal Muscles.

As a parent, sometimes I wonder if my kids really hear me, especially when I preach the values of frugal deals and comparision shopping.

Well today, my 14-year-old gave us lots of reasons to smile. He went to Target, hit the clearance sneaker aisle and purchased a pair of $10 clearance sneakers. What's more, he used his own money, earned from babysitting. The sneakers --black suede with white laces-- are sharp and look just like the triple-digit price-tag shoes he has considered at high-end athletic shoe stores.

But beyond the great deal, I was impressed with his obvious pride at finding a good bargain. He proudly modeled his find for his grandparents and recommended that we all check out the sale.

Of course, like most teens, he still loves expensive basketball shoes that are pitched by big-name NBA stars. But it was refreshing to see my son flex his frugal muscles. It's good for kids to learn to play outside the court of big-ticket marketing campaigns.



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