It made me stop and think about different ways money may become the master:

• When people work and work, yet never seem to have time or make time to enjoy the fruits of their labor.
• Or when they might spend and spend, yet none of their “stuff” brings them joy or quite feels like it’s enough.
• Maybe some have amassed lots of debt that brings them heaps of stress.

If nothing else, it’s a good discussion to have with our kids (if they’re, say, 10 or 12 or older).  Go ahead. I dare you! Report back here some of the more salient comments that come up on my Financial Parenting Linkedin Group. I promise to do the same.

To be continued….

Financial author of the Kids and Money Guide series, Jayne A. Pearl, says the earlier parents approach students about credit, the better.

“I’m a proponent of giving teens credit cards when they’re in high school so parents can easily monitor how the teen is using the credit card, and enforcing smart limits on their usage,” says Pearl. “That way, before they leave home, kids will be more likely to have acquired the knowledge and discipline necessary to use credit wisely.”

Pearl adds that parents should insist on receiving their children’s monthly credit card statement so they can address any spending issues before they get out of control.

One way to open the lines of discussion is for parents to set up a flexible, written contract that weighs the importance of budgeting alongside college necessities.

For parents who still worry their college kids might run up huge bills (as many do), you can give them secured cards, which impose spending limits, such as $500. The moment that amount is spent, no more can be charged until some or all of the balance is paid off.

This past Wednesday, Marketplace Radio aired a story, “A Virtual Bank for the Kids’ Allowance.” The way they work, parents who sign up have their real bank transfer to the allowance site however much allowance they give their kids (on average, $15 a week, according to the American Institute of CPAs). Their kids can log on to see how much money they make.

As Marketplace notes, many of these sites also have a store where kids can buy things, or links to Amazon or other stores. So instead of encouraging kids to save, some of these allowance sites just makes it very easy for them to spend.

But some sites emphasize teaching kids good basics of personal finance. And if the parents are willing to sit with their children in front of the computer to talk about things like saving, budgets, interest, and compound interest, for example, then they could be useful. One allowance site I happen to like a lot is Bill Dwight’s Fam Zoo. It has extremely well-designed, flexible tools for tying allowance to chores, setting up budgets and saving goals, as well as charitable giving. You can take a tour to get an overview, and you can even sign up free for two months to see how it works for you and your family.

Just as I promised, here is the second installment of October’s national thisses or thats.

-       National Go on a Field Trip Month. Children learn more when they get to see how what they learned in the classroom works in the world. So if you’re trying to teach financial literacy to your kids, why not find places that can reinforce the facts and values you are trying to impart? If your kids are young, you can take them to the bank to open a savings account for them. First, explain why it’s important to save—to be able to afford things you want to buy and to be prepared for emergencies. Explain that the bank pays interest on money you keep there, to help it grow. Call ahead to find out if one of the bank employees can sit down and explain how the bank works, give you a tour, and then you can have your child help you fill out the deposit slip and other paperwork. Kids of all ages might enjoy visiting a local business, especially one that has a factory. It’s fascinating to see how even mundane things, like little wire brushes or gloves, are made. Your local chamber of commerce might know of companies that give such tours.
Field Trip Factory lists educational trips by zip code.

-       Positive Attitude Month. Zig Ziglar says that attitude, more than aptitude, affects altitude. You cannot I believe that competence and confidence also affect one’s attitude. And the way to acquire competence and confidence is by setting goals and meeting them. Achieving meaningful goals gives us a sense that we have some control over our lives, which fuels ambition to work hard. Without that sense of control, we feel helpless and hopeless.  So this month, the next time your children ask, nag or beg you to buy them something, tell them that instead of buying it for them, you will help them develop a strategy to buy it themselves. If they receive allowance, or engage in some income-producing activities such as babysitting, show them how long it will take to reach their goal if they save 10%, 20% or more of their money each week. You may even want to give them some extra incentives, such as a matching or challenge grant (which I describe in Kids and Money Guide to Learning Capital). 

-       National Work and Family Month. Working parents with children at home struggle to meet demands at and find balance between home and work. FlexJobs’ latest Flexible Jobs Index finds that medical and health jobs continue to lead the pack with the most flexible job listings among more than 50 fields that FlexJobs analyzes. The top next four sectors that offer open flex-time, freelance, part-time and telecommuting jobs are customer service, administrative, education and training, and sales. If you are looking for a new position, you may want to consider these areas. For parents with children in or just out of college, talk to them about life-work balance, and the potential trade-offs in terms of precious family and leisure time, earnings, promotions, stress, physical, emotional and spiritual health.

Field trips, positive attitudes, and life-work balance are all great topics to discuss with your children of just about any age. In fact, let’s make October—and every month—National Families Eating Dinner and Schmoozing at Home Month.

Almost every month has handfuls of National this or that. Here are some of the not-so-slim pickin’s for this month, according to Chase’s Calendar of Events, along with some of my thoughts about how to make the most of them:

-       Children’s Magazine Month. As we inch toward the holiday season, consider purchasing subscriptions to magazines for kids on your gift list—instead of toys that will bore kids quickly or fashions that go out of style before your kids rip off the tags. There are shortage of publications to engage all sorts of kids’ interests. You can find Parents Choice Award-winning magazines here.

-       National Cyber Security Awareness Month. With all the time kids spend online, you can up the odds that they will surf safely at:
• Wired with Wisdom creates and distributes interactive content through the same media in which kids and adults live their lives.
• Net Smartz is an interactive, educational program of the National Center for Missing & Exploited Children^® that provides resources to help teach children ages 5 to 17 how to be safer on- and offline.
•  NS Teens provides resources that empower tweens (ages 8 – 12) to make safer online choices through lessons taught in a series of animated videos highlighting the Internet-related adventures of a diverse cast of teenagers.

-       Emotional Intelligence Awareness Month. Emotional intelligence involves  self-awareness of your emotions and the ability to sense their impact on other people. It also requires the ability to control your emotions, adapt to changing circumstances. Teaching your kids financial skills and values provides many opportunities to enhance their emotional intelligence. For example, help your kids recognize their response to fads and how advertisements manipulate their desires. Help them identify some of the tricks advertisers use, such as camera angles, small print, product placements in TV shows and movies, making us believe that we need the newest gizmo or that we will be loved and popular by wearing the right designer labels or having minty breath. It can be fun watching TV together more actively, competing to call out and question the premise of the commercials.

Check back next week for a few more national thisses and thats!

It was great being interviewed last week for an article about fun ways to teach kids about money in US News & World Report.

But the reporter did not include some of my favorite fun financial activities:

• Allowance Calculator. See how much your kids’ allowance would have been worth when you were their age or how much whatever you received would be worth today.

• Financial Responsibilities. Doesn’t sound like fun? Maybe it’s not the ha-ha sort of fun, but when kids feel like they are in the driver’s seat, controlling some of their expenses—a combination of wants and needs—they will be more engaged in making decisions. Some of those decisions will be mistakes. It’s important to let them do so, and feel the consequences. If they spend all their lunch money on a new video game, their tummies will growl at lunch time. They will not shrivel up and die; but they if they feel the consequences they will learn and think before they do that next pay day.

• Charitable Giving. Making this a family affair can be fun, meaningful and educational. After putting all those nonprofit solicitations in a folder for a few months, choose an evening or weekend afternoon to sit down together and decide which ones, as a family, you will support. Kids can pitch in whatever they have set aside for charity, and you can tell them how much you plan to give, and then discuss priorities. How much local versus global? How much for the latest weather or other disaster? Which causes resonate most to you and your children: perhaps research for a disease a family member or friend has; the local animal shelter; a loved one’s kickstarter campaign; or a school-sponsored cause.

• Board and online games. The reporter mentioned a few, but I also had suggested others that are equally fun and educational, including Payday, The Allowance Game (actually, I found two: one by Lake Shore Learning and another sold by Mayer Johnson).

Now find some time to sit down with your kids and have fun!

Almost 40% of Gen Z (ages 13 to 22) believe they will inherit money, so they don’t need to worry about saving for their retirement, according to a new survey by T.D. Ameritrade. How many of their parents intend to do so?

Only 16% of their parents feel they will be able to leave their kids money. Yikes! These teens and young adults are not completely clueless about money. More than half have savings accounts, most of which are focused on saving for college.

How are older generations doing on the saving front? Almost 60% of Gen X and Gen Y sock away money regularly to build their nest egg, and  started doing so, on average, in their mid to late 20s. Clearly, they understand much better than Baby Boomers how much time works in their favor, helping their money compound over time. Only 46% of non-retired Boomers make regular, automatic contributions to their retirement accounts, and on average began doing so at age 35.

How will that impact each group’s nest egg? If Gen X, Y and Boomers each save $3,000 per year ($250 per month) toward retirement, by the time each group reaches age 65 those Gen X and Gen Yers who started saving for retirement at age 25, would have a tidy $777,170 by age 65 (assuming 8% return on investments), while Boomers who started at age 35 will end up with $339,850 by age 65. That’s a $427,320 gap !

To end up with a retirement account as large as Gen X and Gen Y, Boomers will have to save more than $6,850 per year (about $571 per month) month starting at age 35.

Fantasy: Neither parents, Social Security, luck, nor a miracle will enable us to retire in comfort.

Reality: No matter how far off into the future retirement may be, we must all take very seriously the need to set aside money every month toward our retirement. In fact, the earlier we start, the more we will end up with. It is never too early to start saving. However, if you haven’t started, whatever your age, it’s not too late to do so. Every bit will help!

If you do have a financial plan, you’re ahead of the game, as a recent Northwestern Mutual poll found that almost half of parents do not have one. I am guessing that one of the many perceived obstacles is uncertainty about the economy. Some may fear that a severe stock market downturn could wipe out hard-earned savings. Others, especially, young families, may find it difficult to find “extra” money to devote to sock away, with all the expenses of raising children.

I would argue that uncertainty should be a main source of motivation to develop a financial plan. If you invest in a diversified portfolio of companies with a solid track record, time is likely to reverse any “paper losses.” Remember: you do not lose a penny unless and until you sell.

As for finding disposable income in our budget to save and invest, the vast majority of us constantly purchase little things we do not really need. Those little expenditures add up quickly. For instance, if you save instead of sip a Starbucks latte every day (about $4 a pop last time I checked),  it would add up to $120. I show teens how they can save up for a new car in just 10 years by saving instead of spending on little things like coffee. They get it and I have heard many stories about how some have become avid savers and become interested in investing.

How might this work for parents? By brewing your own dose of cafeine and investing that $120 a month starting with the birth of your child, after 18 years, at 8% compound annual interest (less than the long-term historical average), you will have amassed almost than $58,000 — more than the current cost of a full year’s tuition and expenses at a pricey private university!

It is really not difficult to find dozens of places to cut back in ways that do not impact your comfort or standard of living. Many of us splurge on big and little indulgences several times a week, between downloading music, video games, electronic gizmos, clothes, or meals out.

Sometimes lessons are clearer when the opposite is presented. Sit down with your kids and ask them what the results might be if they followed these seven bad habits:

1. Buy now, pay later
2. Pay yourself last (if at all)
3. Don’t take time to compare prices
4. Indulge in every new fad the moment it becomes popular
5. Don’t save receipts
6. Don’t reconcile your checkbook or your credit card bills
7. Charge more than you can pay in full when your credit card bill arrives.

I stumbled upon some great calculators at my colleague, Robert Sek’s, website, including these:

• Personal Inflation Rate: Is your personal inflation rate higher or lower than the CPI?
• Life-Time Earnings: How much will you earn during your career?
• College Funding: How much will your kids’ college education cost?

Also check out my allowance and budget calculators. Trying these out with your kids can be fun, educational, and open up opportunities to talk about financial facts of life, priorities and values. Enjoy!