I’ve been reading a novel (The Seventh Telling: The Kabbalah of Moshe Katan, by Mitchell Chefitz ) that involves a rabbi who begins applying his sharp, analytical mind to the world of finance. He tells his new mentor, “I think excess money, money you have beyond what you need for survival, is either bondage or freedom. You can use it to buy things which keep you in bondage, servicing them, or you can use it for freedom, to do those things that lead to experience and growth.”

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….

Here are some quotes by moi in a recent article, “How To Get a Passing Grade When You’re Unschooled in Student Credit Cards,” which appeared on CreditCardSelect.com:

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.

Allowance Sites—the Good, the Bad and the Ugly

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.

October is National Almost Everything Month – Part I

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!