As I look back over my teen years, I realize that my money management education was learned at the “school of hard knocks.” I got a job, bought a car and quickly figured out how much money I needed each week to keep gas in the car and take my then girlfriend, now wife, out on dates.
Today’s parents have a real opportunity to help shape their teens’ saving and spending habits by getting more involved with their children’s money management education. A recent 2008 survey on Parents and Money by Charles Schwab identified gaps parents suffered in their own money management education and perceptions about the needs of teens.
- 58% of the parents surveyed wished they had learned more about money management in their teen years.
- Two-thirds of teens stated that learning about money management is one of their top priorities. Conversely, two- thirds of parents don’t realize that learning about money management is one of their teen’s top priorities.
- The survey’s top three money management topics teens need to know are budgeting, credit card management and investing.
Teaching money management to teens is really about getting them involved with the daily money management issues that parents face. Hands-on experience is the best learning method, with parents serving as good financial role models. Parents should use real-life examples to demonstrate how understanding needs versus wants, along with good planning and individual accountability, contributes to good saving and spending habits.
Keep on saving,
Chris
Chris Hayman
804-360-8337
As someone who probably spends more time than the average person thinking about banks, I am amazed by the longevity of the piggy bank. The concept of piggy banks originated in England in the mid-1500’s. During this period, a material known as orange clay, “pygg,” was used to make dishes and storage containers. People stored coins in these clay “pygg” jars, and these containers eventually became known as “pygg” jars or “pygg” banks.
By the 18th century, the name evolved to piggy banks, and potters began to create these jars in the animal’s likeness. The popularity spread to Europe, where today, it is still common to give piggy banks for good luck and good fortune.
Looking at a photograph of a piggy bank from the early 1900s, you can see the overall look has changed little. The piggy bank has become an icon for saving and is used as a generic term for any type of coin bank.
Keep on saving,
Chris
Chris Hayman
804-360-8337
As we celebrate National Coupon Month and the 100th anniversary of coupons, consumer use of retailer and manufacturer’s coupons is up significantly.
Factoid: There is some difference of opinion as to who invented the coupon. Some say the owner of the Cocoa Cola Company invented the coupon in 1895; others say that grocer C.W. Post offered a coupon on Grapes-Nut cereal in 1909.
The increased popularity of coupons is largely due to our current “Perfect Storm.” Consumers are holding off spending, hoping to save as much as they can, and manufacturers and retailers are using coupon discounts as incentives to entice consumers to spend.
While we still get most of our coupons from the Sunday paper, in-store circulars and direct mail, there are now many other sources for coupons available on the internet. The use of the internet for coupons has risen dramatically and will eventually take over the newspapers and direct mail as the primary source for coupons. Internet coupon options run the gamut:
- Get coupons for your favorite retailers – Many retailers and manufacturers offer their own coupons. Sign-up may be required. Retailers include: Proctor and Gamble, CVS/pharmacy and Macy’s.
- Print your own manufacturer’s coupons – These sites allow you to print your own coupons. You are generally required to download software to your computer to print the coupons. Leading sites include: Cool Savings, Coupons and Coupon Mom.
- Find retailer promotional codes and online discounts – Search for online deals and promo codes for you favorite online retailers. Leading sites include: Retail Me Not, Current Codes and Coupon Code.
- Swap and exchange coupons – Exchange coupons you will not use for those you will. Some sites charge for this service. Leading sites include: Coupon Forum, Thrifty Fun and Swap Savers.
- Donate unused coupons – Donate manufacturer’s coupons for use by military families overseas. Go to Overseas Coupon Program for more details.
- Organize your coupons – Get tips and products to help you manage your coupons. Resources include: Tipnut, The Couponizer, and The Coupon Organizer.
Whether you use coupons sometimes or on a regular basis, the sky’s the limit! You have endless options to pick and choose how and when you want to save.
Keep on saving,
Chris
Chris Hayman
804-360-8337
This is our 3rd installment of saving tips contributed by readers. For a recent review and giveaway with Energizer Bunny Mommy Reports, Marina asked her readers to submit saving tips. Here is just a sampling of the many tips we received and the readers who submitted them:
- “Chop out most of your entertainment expenses. What makes an evening or weekend special and fun are the company and the activity. Do fun, low- or no-cost things with friends like potluck meals, games, and movie rentals rather than fancy dinners out and hitting the movie theater at $25 a pop. Potential savings: another $20-$100 per week.” Thanks to Kathy.
- “For my younger children I always pay their allowance in small change. If I give them dollars they would want to spend it faster but with small change they tend to hold on to it longer and they get so excited when they shake their banks thinking with all that change they are rich.” Thanks to Mary
- “I try to avoid impulse buying. I think about a purchase for a few days. If I really don’t need or want it, I don’t buy it!” Thanks to Senekers.
- ”My best strategy for saving money – Wait 24-48 hours before purchasing the item. If I really need it and still want it 2 or 3 days later than I get it. I sometimes find that I really didn’t need it.” Thanks to Busy Bee.
- “To save money, buy your kid a cute outfit for the first day of school–then wait! As soon as school starts, all the clothes go on deep discount. Do the rest of the shopping the weekend after school starts.” Thanks to Jennifer.
- “If my daughter sees something at the store that she wants, I make her wait for 2 days. I ask her to calculate the cost, her allowance and extra chores she can do to buy it. If she still wants it and has the money, I’ll take back to the store so she can buy it. Funny, sometimes she slaves away for something, other times she’s decides it’s not worth it.” Thanks to Heather.
- “One of my favorite money saving tips is to always search on the internet for discounts or coupons before going out to dinner, shopping, or ordering things online. You can often find dinner specials or B1G1Free coupons for dinner, free shipping codes, free products with purchase, etc items!! So remember to look.” Thanks to Pam
Keep on saving,
Chris
Chris Hayman
804-360-8337
A recent study by T. Rowe Price, a leading mutual fund company, identified a number of ways that parents can do more to prepare their kids to be financially responsible. One result that I found interesting was that 85% of parents reported that their child has a piggy bank and having the bank sets a good saving example. With this in mind, parents now have many more educational and fun options other than the traditional piggy bank.
- Digital Counting Banks – These clear digital banks count the change as you drop it in and keep track of your total savings.
- ATM Banks – Digital technology has enabled manufacturers to create banks that work just like ATMs. ATM banks take coins and paper money and keep track of your savings. Access is provided with a personalized ATM card.
- Talking Piggy Banks – This is the next generation of piggy banks. Like the digital banks, Talking piggy banks keep track of your savings and recognize the coins you put in, asking for more.
- Spend, Save and Share Banks – These coin banks have separate compartments so that children can allocate money to save, spend or share, while learning to make life choices.
Depending on your child, there are many choices in banks that will fit his or her age, interests, and needs. Finding one that suits is often the first step towards encouraging your child to begin or continue saving.
Keep on saving,
Chris
Chris Hayman
804-360-8337
Being a financially responsible adult starts with a good foundation in financial literacy and basic money management skills. Providing the right information, encouragement and resources as children grow-up will ensure success.
Ages 3-5
- Start teaching kids about money as soon as they show an interest.
- As they learn to count, teach them the difference between pennies, nickels, dimes and quarters. Playing “store” with children, using real change to buy things, is a fun way to teach them the value of the coins.
- Give your children banks and encourage them to start saving. Banks now come in a wide variety of styles and capabilities, from traditional piggy banks to digital coin banks that count and track your savings.
- Introduce the concept of “needs vs. wants.” Talk with your kids about prioritizing the things they need versus things they would like to have.
Ages 6-10
- Start your children on allowances, teaching charity, discipline and goal-setting. Keep allowances reasonable and the process simple. Allowances can be linked to chores or spending/saving responsibilities.
- Educate your children on the simple money management strategy of allocating a certain amount of money to save, spend and share.
- Use shopping trips and coupon clipping as opportunities to talk to your kids about finances.
Ages 11-15
- At this age, kids can earn additional money. Make sure they have a bank account and get in the habit of depositing money on a regular basis.
- Involve your children in family discussions around budgeting and goal-setting for large purchases. Studies have shown that family financial discussions are critical to having financially confident children by the time they are 18.
- Expose them to more complex financial terms and concepts, such as the stock market, IRAs and saving for college.
Ages 16 and Older
- During this period, kids need to acquire the basic skills to live independently — managing a checking account, using ATMs and credit cards properly.
- Have your children be responsible for paying a portion of their cell phone, clothing and entertaining.
- Work with your kids on making the right money choices, rather than succumbing to peer pressure.
- Begin setting expectations for college. How much of the cost will they be responsible for?
Keep on saving,
Chris
Chris Hayman
804-360-8337
The dollar sign has a long history in this country. Unfortunately, its cousin, the cent sign, is disappearing from our culture.
The dollar sign emerged in the late 1700s. During that period Spanish dollars or pesos were widely used in the colonies. The abbreviation for pesos was “ps.” Over time, the “s” was written over the “p” and the dollar sign, “$”, came into being.
The origins of the cent sign are a little less clear. Some speculate that the cent sign dates to the early 19th century. It was common to place a line through a letter as a way of indicating that it was a currency symbol, so the lower case “c’ for cents became“¢.”
You may think that the demise of the cent sign is due largely to the fact that very few things cost less than a dollar. Actually, the disappearance of the cent sign has more to do with computers than inflation. During the 1960s, computer manufactures were challenged with how to incorporate all the letters and symbols used in communication into computer programs. Based on the slots available, a number of symbols were unable to be used. Fractions, along with the cent sign, disappeared.
The full impact of this was not felt until personal computers began to appear in the late 1970s. With the cent sign unavailable on our keyboards, we adopted the scheme of using the dollar sign, and 12¢ became $0.12. Computer manufacturers eventually added the cent sign to the symbols menu, although, the sign is out of sight and mind.
The cent sign – something we will be able to talk to our grand kids about – remember when……………………
Keep on saving,
Chris
Chris Hayman
804-360-8337
Growing up, I heard the phrase, “Put a little something away for that rainy day.” The original phrase, “Put something aside against a time of need or adversity,” comes from a book published in the mid-1500’s. In my mind, the idiom means that you should have a little emergency fund just in case something happens – nice but certainly optional.
One thing that the last nine months has taught us is that it is not if we are going to have a rainy day, but when. When teaching money management skills to our kids, we should be more pragmatic and help them understand that a rainy day fund is a necessity, not a nice to have. A discussion of saving strategies should include the concept of a contingency or rainy day fund as part of the plan, not an option.
Keep on saving,
Chris
Chris Hayman
804-360-8337
Grads: Take Charge! is the only book college grads need to take charge of their career, their money and their life! In this 256-page book, Kathryn includes over 140 topics: from careers to credit to cooking (and everything in-between). This book is like having summaries of all the best advice from over a dozen other books right at your fingertips—“CliffsNotes” for life after college!
The response to Grads: Take Charge! has been overwhelming. Counselors, grads and career experts from around the country have given the book thumbs up. Learn more about the book and snag your copy now!
In Part II of our Q and A session, Kathryn provides more practical advice to get started on the right track.
How important is my credit score, really, and how can I improve it?
Your credit score is the most important ‘report card’ you’ll ever receive and it will follow you throughout your life, so it is extremely important. Consider every financial decision you make in relation to how it may affect your score.
To boost your score as much as possible, take a look at your wallet. Cancel all credit cards other than the Big Three (Visa, MasterCard, American Express); department store and other cards complicate your financial life and don’t help your score. Next, list the remaining cards you’re carrying. The cards you’ve had the longest are doing the most for your credit score, so plan on keeping the one or two with the longest history—get rid of the rest.
To keep your score high, commit yourself to paying your cards on time and in full each and every month. Setting up the account to automatically pay the balance on the due date is a great way to be sure you never miss a deadline, even if you’re traveling or overwhelmed at work.
A high credit score is as good as gold when it comes time to get a mortgage or car loan because you’ll qualify for the lowest rates possible, saving you hundreds, thousands, or even tens of thousands of dollars over the life of the loan. Another benefit is that potential future employers and landlords will check your credit before offering you a job or an apartment—a high score will demonstrate your maturity and responsibility to them and make you an appealing candidate.
I’ve heard that I should start saving for my retirement now, but that’s so far off and I have so many expenses now. What should I do?
Every financial advisor will tell you the same thing: the earlier you begin saving for retirement, the more money you will have when you need it. Time is your best friend when it comes to saving. Don’t let the length of time between graduation and retirement lull you into thinking that you can start saving later when it will be ‘easier.’ Too many young people think that they’ll have an easier time saving when their income increases, but expenses tend to increase right along (or faster than) income, so that’s really a myth. Open a Roth IRA right away or participate in your employer’s 401(k) plan as soon as you qualify.
You don’t need to sock away huge amounts of money each month. The earlier you get started, the less you need to save with each paycheck. Begin with just $10 or $20 per month; if you need to give up a night out with friends or a new pair of jeans, so be it. The small sacrifice now will pay off big later. Then, as your income goes up, increase the amount you put into your retirement account proportionally. By getting into the savings habit from the beginning, it will become less and less ‘painful’ as time goes on and you will be handsomely rewarded in the end.
Other than things like an apartment and a car, how else can I trim my expenses so I can actually save money for big purchases later on?
Little savings here and there add up, so you’re smart to think that way and there are at least a thousand answers to your question. But here are just a few that can help you begin to sock away for a rainy day or an important purchase later:
- Spend a few minutes on the phone to negotiate away the annual fee on your credit card(s). Potential savings: $50-$300 per year;
- Plan a week’s worth of meals ahead of time, using grocery specials as your basis. Write down your plan (breakfast, lunch, and dinner for seven days) and follow it. When you avoid making last-minute food decisions—usually when you’re ‘starving’—you’ll see savings in not only money, but time and stress, too. Potential savings: $20-$100 per week, depending on where you stop for food when you have ‘nothing’ to eat at home;
- Chop out most of your entertainment expenses. What makes an evening or weekend special and fun are the company and the activity. Do fun, low- or no-cost things with friends like potluck meals, games, and movie rentals rather than fancy dinners out and hitting the movie theater at $25 a pop. Potential savings: another $20-$100 per week;
- Don’t make any purchase of $50 or more without stopping to ask yourself two questions: ‘do I really need this?’ and ‘how can I get this more cheaply?’ Often, you’ll realize that you don’t really need the item. If you do need it, challenge yourself to see how much you can chop off the price by doing some sleuthing online and over the phone. Potential savings: if you’re like most people, hundreds of dollars per year, maybe even a thousand or more.
To some people it may seem like a chore to try to save money, but if you make it a game of sorts to see how cheaply you can get the things you really need, the results can be very rewarding!
Navigating life after college is hard enough; don’t set yourself up for a struggle! Get your copy of Grads: Take Charge! today
Keep on saving,
Chris
Chris Hayman
804-360-8337
The time has finally arrived for the Class of 2009. Many years of hard work have resulted in a college degree. Graduates are now faced with making many decisions: from finding a job, to getting an apartment, to establishing credit and the list goes on. Some choices are easy; others are more complicated and could have a lasting impact.
As a graduate or parent of a graduate, don’t you wish there was a comprehensive resource guide for that first critical year? Kathryn Marion has come to the rescue with Grads: Take Charge! This is the only book college grads need to take charge of their career, their money and their life! In this 256-page book, Kathryn includes over 140 topics: from careers to credit to cooking (and everything in-between). Grads: Take Charge! is like having summaries of all the best advice from over a dozen other books right at your fingertips—“CliffsNotes” for life after college!
Learn more about the book and snag your copy now!
In Part I of our Q and A session, Kathryn provides sage advice for some of those big decisions that grads face.
I just graduated and don’t have a job yet. How-in-the-world am I supposed to set up a budget for myself?
You’ve asked this question at the ideal time: before you have a job. My first piece of advice to new grads is to not rope yourself into any long-term financial commitments such as an apartment lease or car loan until after you land a job. This way, you’ll know how much money you have to work with on a monthly basis and can develop a realistic budget for yourself.
Do whatever it takes to stick to this: move back in with your parents, sleep on a relative’s couch, bunk with friends (without putting yourself on the lease), take the bus or carpool to work, forget restaurant meals in favor of potlucks with friends. Sacrifices you make now will pay big dividends later.
If you get yourself committed to leases and loans before you know what your income will be, you force yourself into a situation where your future job must meet an artificial minimum salary requirement. You will have eliminated the luxury of taking an offer for a dream job that doesn’t meet that minimum requirement. That puts you in a hugely stressful situation that you don’t need as soon as you enter the ‘real world’ on your own. Do what it takes to give yourself a solid start in life and develop your budget based on an actual income figure.
I don’t think I can afford the apartment I want after graduation. What should I do?
Wanting better digs than you can afford on an entry-level salary is a common problem for grads. You might feel that you’ve worked hard and sacrificed these past four years and deserve to step into the working world with all the trappings of a successful young professional. But the harsh reality is that the sacrifices have just begun—if you want to create a solid financial future for yourself, that is.
If you don’t think you can afford the apartment you want, you most likely can’t. But that’s a temporary situation. Find a place to live that fits comfortably within your budget, save your money, and work on establishing yourself in your career and growing your salary. You’ll be able to afford that apartment at some point and you’ll feel great knowing that your early sacrifice paid off.
Now that I’m on my own, I guess I need to take care of insurance for myself. But I don’t know what I need or how to get it. Help!
You’re smart to think about insurance; many grads consider it only as an afterthought and often get caught having to make quick, uninformed decisions which are rarely good ones. The first thing you need to take care of is yourself: health coverage. Find out when you will no longer be covered under your parents’ policy. If you already have a job, find out when full coverage kicks in. You don’t want to have a gap between those two dates, because that’s a time when you aren’t covered at all and an accident or major illness during that period could be financially devastating.
Next, you need to make sure the coverage on your auto policy meets at least the minimum requirements in the state where you live. Depending on where you live, there may be a high percentage of un-insured and under-insured motorists on the road. If you’re hit by one, your health insurance may pay the majority of your medical bills and your auto policy may pay for damages above the deductible, but you’ll need to come up with that deductible and face higher premiums every month for years to come. Better to safeguard your finances by getting the (sometimes optional) un-insured/under-insured motorist coverage.
Your landlord’s homeowner policy covers only the building, so you need to protect your ‘stuff’ on your own. A renter’s policy will cover your furniture and personal belongings from theft, vandalism, or loss to fire. The good news is that renter’s policies are generally very affordable, and if you find a company that can provide both your renter’s policy and your auto policy, you’ll qualify for a multiple-policy discount.
Being young, and presumably healthy, you don’t need life insurance until you marry, but we all have a much higher probability of becoming disabled than dying before we retire. You may even be able to find an agent able to provide you with your disability policy along with renter’s and auto which should qualify you for even more discounts.
Stay tuned for Part II of our Q & A session. Get your copy today of Grads: Take Charge! Navigating life after college is hard enough; don’t set yourself up for a struggle!
Keep on saving,
Chris
Chris Hayman
804-360-8337
