Went camping with my daughter this weekend and had a blast. Problem is, I didn’t get my Weekly Round-Up out the door!  Here’s the belated and abbreviated Edition #3 of my Weekly Round-Up…enjoy.

Personal Finance Carnivals

Thanks to Baker at ManVsDebt for hosting this week’s Money Hacks Carnival #76 and including my post, Book Review: Design Your Child’s Financial Future (Part 4)

I’d also like to thank Baker for putting me on team Zeta on the PF Blogger Weight Loss Challenge!

Enjoy!

“Ready, set go!” screamed the lifeguard.  Kids squealed, water splashed and arms and legs flailed, as 15 kids between the ages of 6 and 8 jumped into the shallow end of our community swimming pool this past Memorial Day.  They were focused on their mission of finding the specially marked pennies that the lifeguard had thrown in the pool a few minutes earlier.  She had thrown in probably no less than 100 pennies and only a handful of them had been marked with a big white dot on one side.  For every white-dotted-penny that each kid found, they got to pick a prize from the lifeguard station.  They were fun little prizes, the kind you pick up at the dollar store by the bagful.  Plastic and plentiful and probably worth about a nickel each.  My 7 year old son was particularly interested in two of the prizes, an eraser shaped like Spongebob and a  plastic frog that “hops” when you push it.

The kids were focused and determined.  Parents were barking orders from the pool’s edge and the kids were swimming around like guppies scooping up as many pennies as they could find.  I have to admit, I was barking out a few “pointers” myself.  I was worried my son might not find a white-dotted-penny and be disappointed.  The whole game lasted about 5 minutes and about halfway through he stuck his hand up out of the water and showed us that he had found one of the marked pennies.  “Get another one!” I yelled back, “You can get both prizes!”  The kids swam around for a few more minutes, but I noticed my son veering away from the pack…and away from the pennies.  “Where the heck is he going, did he give up?”, my wife asked.  When the pack of kids had picked the pool bottom clean of pennies, the lifeguard blew her whistle and called the kids out of the pool.

“Alright,” she said, “whoever has any white-dotted-pennies can take them to the lifeguard stand to pick your prizes.”  My son looked very proud of himself as he walked over to the stand.  I asked him, “how many pennies did you get buddy?”  Smiling broadly, “One,” he said.  “That’s great, at least you can get one of the prizes you wanted,” I assured him.  “But, why didn’t you keep trying to find more pennies like the other kids, so you could get both prizes?”  “I saw something else down there”, he said, ”2 quarters, 3 dimes and 2 nickels - 90 cents.  Can you hold them for me?”

While all the other kids were frantically swimming around focused only on finding pennies, my 7 year old made a decision to break away from the pack.  And while 90 cents may not seem like a lot of money to you or me, it was a lot of money to him.  He currently gets a $2 weekly allowance, so an extra 90 cents is big money!

“Hey Buddy, that’s enough money to buy yourself a snowcone,” I offered.  “Yup,” he replied, “but I’m going to put it in my piggy bank…I’m saving up for a big lego set.”  I was speechless, he passed up the immediate gratification of a snowcone, so that he could get that much closer to buying himself the lego set he’s been saving for.

It’s amazing what you can learn from your kids if you are really listening.  Here’s what I learned that day:

• Don’t get so focused on the task at hand that you miss out on bigger opportunities
• If/when you’re lucky enough to get some unexpected money (a bonus, an inheritance, you win the lottery!), don’t blow it all and don’t forget what your real financial priorities are 

 I wish I had that kind of self-discipline at his age…or even at my age for that matter!

What are the most surprising lessons, financial or otherwise, that you have learned from your kids?

This is Part 4 of my multi-part review of Lori Mackey’s workbook, “Design Your Child’s Financial Future.”

 In this week’s post I’ll be covering Chapters #7 & #8.

Millionaire Habit #7: The Power of Earning

This chapter delves into the area of generating income and introduces the notion that while many adults have jobs, there are many other ways to generate income.  As your kids get older, you can teach them that in addition to having a job, they can earn money through:

• capitalizing on an idea
• education
• business investments
• interest on investing vehicles (stock, bonds, etc…)
• income from royalties, providing a service, or selling a product

Businesses for Kids

In this section, the author gives ideas for businesses your children may be able to start, depending on their age.  I have categorized them below for easy reference:

Selling a Product

• Lemonade stand
• Hot chocolate stand
• Making cards
• Used bikes - refurbishing and reselling

Selling a Service

• Collecting mail/Watering plants
• Wrapping gifts
• Pet photography
• Pet sitting
• Baby sitting
• Mother’s helper 
• Pulling weeds
• Raking leaves
• Washing cars
• Shoveling snow
• Cleaning garages

Tutoring Younger Children

• Tutoring younger kids in math, reading or science
• Sports training
• Computer Skills
• Writing tutor

If it is their first business, you will have to help your child get started.  There is a mini-business plan included in this chapter which you may find helpful.  It walks you through the basic questions you should ask and answer before starting any business, e.g. who is your customer, etc…

As you work with your child to evaluate their business ideas, it is a good opportunity to talk about the difference between a product business and a service business.  A service business usually has significantly lower starting costs, e.g. dog walking or baby sitting.  If your child is very interested in starting a product business but does not have enough money for startup, they could always start a service business first, and then save-up their earnings to use for a product business.

The chapter closes with the mini-business plan template, along with a Feedback Questionnaire that your kids could use to bounce their ideas off friends and family to see how their business idea sounds to other people.

Millionaire Habit #8: The Difference Between Being the Boss and Being the Employee

Spark some entreprenuarial spirit in your kids by sharing the authors kid-friendly explanation of the difference between being a Boss vs. being an Employee:

• When you’re the boss - You own the company and employees work for you.  You decide what you are worth, the hours you will work and how much you will get paid.
• When you’re the employee - You work for the boss.  The boss decides what you are worth, controls the hours you work, controls when you have vacations, and decides your income.

This chapter opens with a discussion of the importance of making sure your kids learn to give 100% in everything they do.  Whether your child will work as an employee or perhaps, have their own business, having a strong work ethic will go a long way in ensuring their success, in either scenario.  Chapter 7 instructed us how to give our children some simple experiences in being “the boss”.  Then, as your child becomes a teenager, this chapter recommends that you make sure they understand that there are huge benefits to being a great employee…you’re paid more, you get bigger bonuses and you have more say with the boss.  In order to be a great employee, your kids will have to understand what it means to give 100% in everything they do.  The chapter closes with a recommendation to use real-life employee encounters at restaurants and stores as examples of who are good and not-so-good employees, to help your children understand the difference.  Discuss with them whether they think am employee was giving 100%.  This will help them know how to act when they are an employee themselves, or when they are hiring employees!

Coming soon, Millionaire Habit #9: Your Child is a Genius!

That’s it for this post, look for Part 5 coming soon. If you like this post and would like to make sure you don’t miss any future postings, subscribe to the RSS feed!

Happy Memorial Day everyone!  Here’s Edition #2 of our Weekly Round-Up…enjoy.

Personal Finance Carnivals

StretchyDollar was kind enough to host this week’s Money Hacks Carnival and included my post, Book Review: Design Your Child’s Financial Future (Part 3)

I’d also like to thank WiseBread for including IndependentMinded on their list of Top 100 Personal Finance Blog.  You’ll have to scroll down a ways to find us, we are #223, but we’ll take it!

Around the Personal Finance Blogosphere

FreeFromBroke writes: Save on Your Car Insurance With Proper Emergency Savings

HealthMoneySuccess writes: Top 50 Personal Development Bloggers

ZenHabits writes: How to Create a Minimalist Computer Experience

Now that May is here, the year is almost halfway over.  If you aren’t on track to hit your financial goals for the year at this point, it’s going to start getting increasingly difficult as the months pass by.  Now is the time to take stock of how you are doing and decide if you need to make any changes.  With that in mind, below is a monthly checklist for May to help you make sure you are on track.  But first, a couple of tips…

A Few Tips From My Twitter Friends

I reached out to my Twitter network a couple of days ago to see what other people do to keep on track financially.  Here are two of the good tips I received (in 140 characters or less!):

@MyLifeROI had this to say: I use Mint and have the Mint iPhone app (for my iTouch)… so I check every few days to make sure I am in budget on categories..

@AboutCredit had this to say: I set a monthly budget and frequently check outstanding expenses against checking account balance.

May’s Monthly Checklist

• If you received a big tax refund from the government, you may want to adjust your withholding to get more of your money back now instead of lending it to Uncle Sam for a year.
• With Winter a distant memory, it may be a good time to do some Spring cleaning and donate clothes and other things that you no longer use.  Especially in this economy, charities can use all the help they can get.
• As our Twitter friends recommend above, make sure that you have a monthly budget and check it often throughout the month so that you are not surprised at months end.
• Make sure you are paying your credit card and other bills in full and on time.
  • If you have a “get out of debt” plan, are you on track?
• Make sure your savings and investing plans are on track:
  • Have you been contributing to your retirement fund?
  • If you have kids, have you been stashing some money away for your kids college education?
  • How is your Emergency Fund?  If it’s not at a level of six months of expenses, you should be adding to this as well.
  • By May, you should make sure that you are on top of your expenses and on track to your budget.

That’s it for now. I hope that you are all taking the time to enjoy the great Spring weather!

Am I missing anything from my list?  Are there certain things that you do on a monthly basis to make sure you are on track?  I’d love to hear about it!

Also, if you like the posts on this site, please sign up for the RSS feed

I’ve been lax in getting part 3 of my review up.  Upgrading to WordPress.org and redesigning the site has been a lot of fun, but also very time consuming.  So, now I am back and here is part 3 of my book review of “Design Your Child’s Financial Future.”

 In this week’s post I’ll be covering Chapters #5 & #6.

Millionaire Habit #5: Teaching Kids the Benefits of Savings

The third “10″ in the 10/10/10/70 system is for the 10% of your child’s income that should be put into long-term savings for emergencies they may run into later in life and eventually even retirement spending.  This one is probably one of the more difficult ones to explain because children (and some adults) will feel like money saved for the long-term is money lost…the trick is in getting them to understand that saving money means you actually have more of it.  If you can get your kids to save a portion of their earnings, starting at a young age, then you will be setting them up for solid money management habits in the future.

Comparing Saving and Investing

Saving money is basically the same thing as investing it.  But the Savings category is specifically meant to cover down the road emergency expenses and help with future retirement spending.  The hope is that your child will never have any big emergency expenses and that it will all go towards their retirement in the future.  However, if they do have emergencies, then that money needs to be liquid and ready to go.  The investing portion is meant to be tied up in longer term investments and will be less accessible in the case of an emergency, so the main difference here between Saving and Investing is in the liquidity of your holdings.

Savings Accounts

Once your kids have amassed a reasonable amount of money in their piggy banks, you should find a safe and liquid place to put it.  A perennial favorite is ING Direct’s high-yield savings account.  I happen to keep my own non-retirement money here.  The interest rates are always at or near the top of all banks.  You may also want to consider putting your kids money in a CD if you can get a higher interest rate.

Other Ways of Saving Money

The author provides several tips to teach your kids how to get the best prices on the things that they want to purchase. 

• Always ask for a discount when you can
• Always research your purchases online, in newspapers, etc… to find the best price
• Teach your kids to delay their purchases and wait until things come on sale before buying

When your kids employ the above tips and purchase something at a reduced price, teach them to take the money they saved and put it in their Savings account.  This will help them to appreciate the money they saved in that purchase, because they will actually be able to see it on their bank statement.  Regular trips to the bank for deposits, either online or offline, will keep your child motivated to continue seeing their savings grow.

Millionaire Habit #6: Teaching Kids the Benefits of Spending

The last portion of the 10/10/10/70 system is the 70% that is dedicated to Spending.  This is the money that should be used when you child wants to buy something or when they are saving up to buy something.  They can feel good about spending all of this money since they have already squirrelled away money for investing, saving and even contributed to charity.  This money is for them to enjoy.  Now, just because it is their money, doesn’t mean they can do anything they want with it - you are still their parents.  That being said however, you should give them a little leash to make mistakes and learn with their own money, and to do so while the stakes are low.  For example, you can warn them about buying junk that will break as soon as they get home or buying things you know they will never use.  Make sure to give them your thoughts before they make the purchase, but then you have to let them decide for themselves and see what happens.  Don’t turn these into “I told you so” moments, or they’ll stop discussing these issues with you in the future.  A better apprach is to ask questions about what happened, why it broke, why they don’t play with it anymore, etc…  These should turn into valuable lessons for your child.

Spending Wisely

Teach you child to ask themselves a few questions before they make any purchases:

• Do I really want this?
• Do I have to have this?
• Is there anything else I’d like to have more?

By asking themselves these questions, it will help them to understand how to make wise choices with their money.

What’s interesting to see, is how your children will be much more careful in spending their own money than they are with yours.  Next time you are out and about and your kids ask you to buy them something, tell them that they can buy it with their own money.  Be sure to remind them that they will then have less in their spend account for anything else they may already be saving to buy with their “spend” money.  You’ll be shocked by how many times they will decide that they don’t want to waste their own money.  But, they were perfectly willing to waste yours!

When your kids are old enough, it is a good idea to have them track their expenses for a month so that they can get an idea of where that 70% of their earnings is going.  This is a useful exercise for parents too!

Say “No” to Credit Cards

This section of the book discusses the evils of credit cards.  You should not get your kids a credit card unless you show them how to use it responsibly and teach them the dangers of misusing it and ruining their credit reports.  A bad credit report can affect their chances of getting into a good school or even effect their employment prospects.  The author recommends that when your child is a teenager or college student, you should encourage them to get a credit card to start establishing a good credit history, as they will need this to buy a house later.  I agree with this, but ONLY if you are certain that your child is mature enough to handle the responsibilities associated with having a credit card.    College kids are often targeted by credit card companies.  I saw a news report on NBC just the other day about how some college students had racked up significant amounts of debt because they were not using their new, easily obtained credit card wisely.  Be sure to check out the good tips the author offers on helping your older kids to manage their monthly budgets to make sure they can pay their credit cards off each month.

Coming soon, Millionaire Habit #7: The Power of Earning

That’s it for this post, look for Part 4 coming soon. If you like this post and would like to make sure you don’t miss any future postings, subscribe to the RSS feed!

So you may be wondering, “Hey, what’s up with Edition #1?”  The fact is, I’m trying to add a little more structure to my posting schedule.  So, hopefully, I’ll be getting more consistent about sending out the Weekly Round-Ups.  Numbering them should help to keep me on track.  We’ll see.  And with that in mind, here goes nothing.

Personal Finance Carnivals

The video on the state of our economy, The Crisis of Credit Visualized was part of the Money Hacks Carnival this week at Money Hacks Carnival #64 - As American as Apple Pie, hosted by My Life ROI

Around the Personal Finance Blogosphere

Saving for Serenitycompiled a list of Personal Finance bloggers to follow on Twitter and was kind enough to include me on his list.

Five Cent Nickel continues the perennial debate on whether to pay off your mortgage early or invest the money.  I’m a big fan of paying it off early myself and you can read more about this here.

Personal Dividends discusses strategies and tips to teach your kids about money and savings.  This is a topic I have a lot of personal interest in and will be posting more about in the future.

So after lots of hard work this week with loads of help from my wife, we have a great new look for the site and a fantastic new logo!

Please poke around the site and see what you think.  Leave any comments here whether you like it or not - you won’t hurt our feelings!

We want to make the design the best it can be.

Enjoy!

I love it when someone is able to take a very complex topic and make it simple for everyday people to understand.  It is really a gift that few people possess.  Jonathon Jarvis has done just that with our current credit crisis.  Take a few minutes to watch his video:  “The Crisis of Credit Visualized”.

It’s about 11 minutes long, but worth the time.  I learned something watching it and I hope you do too.  Even if you don’t learn something new, you’ll certainly be entertained!  Enjoy…

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Thanks to Pinyo for including Independent Minded at his great new aggregator website:  Great Nexus

It’s a central repository for news and post bucketed into categories and a great place to get your quick hit of what’s happening right now!

Thanks also to Ray at Financial Highway for hosting the 62nd Money Hacks Carnival - the Playoff Edition, which features my post on How to Reduce Volatility in Your Long Term Investments.

Enjoy!