Are your children spoiled?

Spoiled is a harsh word, but I did get your attention.  For now, let’s look beyond the word and know that sometimes the truth is painful.

Whether your children are in the 3rd grade or in their 30s, how you handle money issues will help shape their financial future.   What kind of examples do you set for them when you are earning, saving, spending and investing your money?  When they ask you for money or to co-sign a loan, how do you respond?  Do you let parental guilt overrule your better judgement?  Sometimes, we allow our emotions to guide our decisions even when we know deep down that we may be taking the short term easy way out.

If you co-sign a loan for your son or daughter, you are 100% responsible if they don’t make the payments on time or decide that they can no longer make the payments at all.  This can destroy their credit AND your credit.  It’s learning about money the hard way for you and to a lesser degree for them. 

A better way would be for them to establish their own credit even if they have to start small with a low limit credit card.  They could also get a part time job and save enough money to pay for what they want with cash or at least to have a bigger downpayment.  But, you love your children and want only the best for them.  Buying them what they want when they want is not a good way to go.  Just ask parents who are still paying for their 30 year old’s car insurance or bailing them out of credit card debt and other financial messes.  You can be there for them always, but that doesn’t mean with an open wallet.  If you feel somewhat uncomfortable after reading this, that’s good.  Nothing worthwhile in life is easy.  As Nike ads say, “Just Do It”.

For individual money coaching sessions, school assemblies, classroom workshops and Money Field Trips visit http://www.moneylessonsforlife.com

Education & The Economy

Why are we experiencing the current downturn in our economy?

Here are a few logical reasons (in no particular order):
1.  It’s normal for economies to experience cycles, both up and down.
2.  Recently, people and companies were able to borrow too much money, too easily and at interest rates that were too low.
3.  People and companies also spent more money than they should have.  Saving rates were at historic lows and very low relative to other countries.

There are many additional reasons, but I’d like to focus on one that most people are not talking about.  For the most part, our schools don’t teach their students about money.  If you don’t receive a financial education at an early age, you go through life learning about money by making mistakes.  Wouldn’t it be better to learn about money before making mistakes?

Even most our political leaders who are now making major financial policy decisions for our country have not had a strong financial education.  Maybe they’ve taken a college economics course, which is only better than nothing.   Everyday financial decisions about earning money, saving money, spending money and investing money are not taught to most young adults here in America.  Impressionable young adults grow up to become heads of families or heads of companies or heads of state.  Instead of dwelling on the past mistakes, we should focus on our children’s future.

A great way for you and your children to start learning about money is the new innovative Intro to Money DVD created and distributed by Money Lessons for Life.

About Money Lessons for Life
Money Lessons for Life was founded February 2007 to teach children, teens and adults about money. Our increasingly complicated financial world requires a greater understanding of money, yet many struggle with even the basic money concepts. We’re here to help to get everyone on track by offering innovative:

• School Programs
• DVD Money Lessons
• Public Speaking Engagements
• Individual Money Coaching

Bailout anyone? Or, bailout everyone…

NOTE:  This post puts all politics aside and discusses our current economic crisis.

I don’t know about you, but most people wouldn’t mind being bailed out everytime they made a bad financial decision that ended up costing a lot of money.  Most don’t have a “Bailout ATM” in their house.  Unfortunately, some large banks, insurance companies, automobile companies and others need our government to survive these difficult times.  Without some form of assistance, some will go out of business which would mean tens of thousands of people would loose their jobs and without their jobs, they would be forced to spend a lot less money.  And, the companies that go out of business would crush their suppliers causing them to shrink or also go out of business.  Now, you get the general idea of a downward economic spiral.

How these bailouts or rescue plans are implemented is key, because just throwing good money after bad is a recipe for disaster.  The focus should be on how to get back on track and how to prevent these situations from happening in the future.

Everyone including governments need to be smarter about how they spend their money.  If our political leaders, corporate leaders, and everyday citizens were taught about money when they were young, we’d be in much better overall financial shape today.

Instead of making excuses, we need to be more competitive in the global markets.  We need to produce more, distribute more and market & sell more of what we have to offer to other countries and their citizens.  Bailouts will only help the short term, but for long term prosperity, we need to grow our economy otherwise, bandaids and bailouts will become a regular occurance and our government will need to print a lot more money which will lead to hyperinflation.  Can you say $10 for a gallon of gas or a loaf of bread?

If you haven’t already done so, you should sit down and speak with your children about the current economy and what’s going on with your family’s finances.  They see and hear more than you think and it’s better to educate them so they don’t get the wrong messages.

To help protect our country’s financial future, we need to teach our children about money.  Visit Money Lessons for Life  to learn more about money and to teach your children and teens about money.

Don’t Let Your 401K Statement Scare You

Halloween is just around the corner, but for many of us our 401K stock market investments have been more of a trick than a treat lately.  Yes, stock markets around the world have experienced big losses over the last several months and unless your 401K was entirely invested in money market funds your balance has declined recently.

 

But, now is the time to be brave and live by the expression, “Buy in Fear, Sell in Greed”.  Unless you are already retired, you should focus on long term investing.  Now is a great time to stay in the stock market or to move more of your fixed income (bond and money market) money to the stock market by reallocating your 401K investments.  DON’T change your allocation to a lower % of stocks, because then your paper loss will become a real loss.   Even the smartest financial experts can not and will not try to predict whether the stock market will continue to go down in the short term, but most agree that the market will go back up…it’s just a matter of time.  Definitely DON’T withdraw your money from your 401K, because even if you have losses you will have to pay income taxes and tax penalties on that money.

 

Garrett Jay, is a Money Coach and Founder of Money Lessons for Life.  Money Lessons for Life teaches children, teens and adults about money with School Assemblies, Classroom Workshops, Money Field Trips, DVDs and Individual Money Coaching.

Teach Your Children About Money & Learn from Today’s Money Mistakes

Troubles from Wall Street to Main Street…

How’s the value of your real estate lately?  How about the value of your 401K, IRA and other retirement accounts?  Are you spending a lot more money on gas, food, insurance?

Although markets normally experience ups and downs, the economic troubles our country has been facing for about a year now have been largely been caused by “financial experts”, elected officials at all levels of government and the general population.  Easy money (extremely low interest rates) have fueled excessive overspending and foolish investing.  The good news is downturns actually present many opportunities IF you are financially fit enough to take advantage of them.  Even if you’re currently struggling with big money challenges, it’s a great time to teach your children about money, so they don’t make the same mistakes. 

For starters, teach your children these simple but crucial money concepts:

1.  Only buy what you can afford to pay for today, not tomorrow.  The first question is, do you really need it?  Wait a few days and ask yourself if you still “need it”.  Then, ask if can you really afford it now?  Do you have any outstanding credit card debt that should be paid off?  Have you saved enough money this week for your children’s college fund, vacation, holiday shopping and your retirement?

2.  Save early, save often, save as much as you can and then save more!  This concept is hard to adopt when we are consistently tempted with advertising offers and social pressure to buy, buy, buy!  But, you must set savings goals and you must have the discipline to stick to or better yet to exceed your goals.

3.  Buy Low, Sell High.  If you follow the first two principles, you will have lots of extra money available to invest in assets (stocks, bonds, real estate, gold and others) at bargain basement prices.  This is how many people build significant wealth.  If you and your family are not well positioned now, start preparing for your future and your children’s future NOW.  I guarantee our economy will bounce back and yes, several years from now it will also “crash” again.

For more money tips and a new innovative DVD that teaches kids, teens and adults about money check out:  http://www.moneylessonsforlife.com