What Should You Say to Your Kids?

April was National Financial Literacy Month, and many parents took the opportunity to speak to their children about being financially savvy before heading to college in today’s economy.

Having those first conversations with children regarding spending on tuition and making out a budget can be challenging.

“Number one is, don’t keep your child in the dark about finances,” says Adam Carroll, chief education officer with National Financial Educators.

“Throw the whole money taboo out the window. It’s okay to discuss what insurance costs. What parents need to arm their children with are realistic costs that they will be faced with when they get out of the house and get out of school,” Carroll says.

Many 18-year-olds have left high school armed with a knowledge of U.S. history and calculus, but no experience with the realities of car loans and college tuition.

Julie Felshaw is the financial education specialist for the Utah State Office of Education. Utah is one of only three states that require a course on personal finance for graduation from high school. The program educates high schools students about financial basics such as checking accounts, investing and risk management.

“The key is making the topic relevant,” Felshaw says. Parents can peak their children’s interest by relating abstract principles to relatable topics, such as saving for a car, creating a budget for prom, or projecting the costs of their first year of college. Many teachers use online stock trading games and in-class investment simulations to let students learn the financial ropes with no risk.

“Kids love to talk about money,” she says, and the more times they discuss it, the better they’ll understand it.

This process can, and should, begin much earlier. Kara Lott, a parent of three young children, is uses trips to the grocery store to teach her three young children basic money principles. While her youngest, Lanie, 5, is eager to spend a dollar as soon as she gets it, 7-year-old Ethan will spend an hour in the toy aisle to make sure he gets the best value for his $5.

“My son will ask me, ‘If I only spend two, do I get to keep three?’” Lott’s oldest, Dane, 10, has started asking her how checks work, and how the ATM knows to whom to give the money. He realized after his last birthday party that if he returned a duplicate gift, he would then have enough cash to buy a video game he wanted.

She encourages her kids to donate a small percentage of their money to their charitable causes, and she plans to open savings accounts for them once they understand the basics of saving and spending.

With the right kind of financial education, both at home and at school, the next generation is bound to be smarter and more secure than its parents. Just think what the housing market might look like right now if we’d all learned the simple lesson Ethan learned with his video game: Don’t buy what you can’t afford.

Kids' View: Summer Lovin'

What do you love most about the summertime?

“I like to use the shovel in our garden. And I like picking the tomatoes off of the vine.” —Dillon, 5

“Playing power rangers on the trampoline.” —Nate, 3

“The warm, warm weather. I could stay outside all day.” —Jennifer, 14

“Disneyland, camping, and visiting grandma and grandpa.” —Anna, 6

“I like working out.” —Gentry, 12

“Playing football, definitely.” — Derek, 9

“My favorite thing about summer vacation is horseback riding.” —Kim, 7 

“Swimming and sleeping in and playing.” —Noelle, 5   

From the Grown Up

Tim Hollis, author of Dixie Before Disney, is an expert on old-time tourist attractions. 

Kids recently asked him, “How was vacation when you were a kid different from vacations today?”

“When I was a kid in the 1960s, people did not usually go to just one mega-resort like Disney World or Universal Studios. Instead, we had fun just driving from place to place and maybe seeing eight or ten tourist attractions before the trip was over,” Hollis says.

For a kid-friendly perspective on summer vacations, visit http://www.pbs.org/parents/summer/

Investing Activities for Kids - Motley Fool

By Selena Maranjian

Are you convinced that your kids should start investing? Or that you should be investing for them?

Or maybe you’re considering quietly parking some money in a few stocks or a mutual fund and then forgetting about it.

Think again. 

You can use this opportunity to help your kids learn about investing and the stock market.

Can you really get your kids interested in this stuff? You bet. Here are some activities you and your kids can do together.

Build a mock portfolio

Have your kids make a list of the companies that interest them most. They can get ideas by looking in their closets, in their classrooms, in the mall, on TV, etc.

Look at companies your kids know. Write down the names of 10 to 20 interesting companies, and then record the current stock price of each. Every day, week or month you can check the prices together, see how the stocks are doing, and record the latest prices.

Follow your stocks together

Along with updating the prices periodically, you can scan newspapers, magazines, Fool.com, and other websites for stories about your companies.

Is McDonald’s promoting $0.75 burgers? Will this help the company by bringing in more sales, or will it hurt by decreasing the total profit? And how did the stock market react when it heard of this announcement? Did the stock go up or down?

Consider school subjects other than math as you explore stocks. Investing can relate to most subjects in school and can give kids a bit of a new perspective on their studies. There’s obviously math involved, since they multiply share prices by how many shares they want to buy and perform other calculations with numbers from annual reports. There’s history, too, as they examine how venerable companies like AT&T or Ford got to where they are now.

Start actually investing

Once you’ve become comfortable with the idea of investing in stocks, it’s time to consider buying some shares. You can open a joint brokerage account, with you acting as custodian, but you don’t have to go this far. You can informally “sell” some of your own shares to your child.

For example, if you’re about to buy 100 shares of a particular stock and your child wants to buy a share or two herself, you can just place the order together — and order 101 or 102 shares through your broker. You don’t have to buy round numbers of shares — “odd lots” are okay.

If you do these things, you’ll want to keep a good record of which shares belong to whom. Once your child turns 18, she can open her own account at a brokerage and you can transfer her shares to it.

There’s a lot more to investing, of course, and a lot more that you can do with kids to explore the stock market together. The learning process should prove rewarding — and fun — to both parent and child alike.

10 Things You Need to Know About Credit

1. Your Credit Score. Know your credit score but also know what it means. The score is relative, but it is based on a point system where 850 is perfect, 720-749 is good, 660-719 is fair, and 659 and below means there is some repair to do.
   
2. Review your credit score once a year. There are several Web sites that will give you your credit score for free. You are eligible to receive your credit score and history once a year by law.
3. How to use it. Make sure you are using your accounts, but continually paying them down. When you use more than 70 percent of your credit account’s limit, this shows that you need the credit and can be interpreted negatively. When you use your credit often and pay it off, it shows lenders you are responsibly paying back your debts. 
4. What your score means to lenders. Whether or not a lender is going to give you a loan is based on your credit score and history; however, there’s no way of telling how the lender is going to interpret your score and history. They may use several different reports from different credit agencies, or they may base their decision on one alone. In some cases, some lenders have their own rules and qualifications for interpreting credit histories.
5. You have to build credit. No credit is sometimes just as bad as having bad credit. When you’re credit history has nothing on it, lenders have nothing to base their decision on. You’ll need to establish some sort of credit and begin building a responsible history. 
6. Different types of debt. There are two kinds of debt — secured and unsecured. Secured debt is loans you have for items that have collateral like cars, houses and property. If you were to default on your loan the issuer would want to collect the collateral to pay off the debt. Unsecured debt is when you used credit for intangible items like student loans or credit cards. 
7. Pay your bills on time. Roughly 35 percent of your credit score is based on payment history, so paying bills on time creates a strong history. Items such as overdue accounts, collection agencies, charge-offs or bankruptcies can damage your history.
8. Employers often check credit. Banks and lenders aren’t the only ones reviewing your credit history. Many employers will review your credit history as part of your background check when applying for a job. 
9. What to do with unused accounts. When a lender reviews your account they are going to look at account balances in relation to how much credit is available. Closing accounts you do not use removes those available balances from the equation and can actually lower a credit score. 
10. Check for errors on your credit history. Go through your credit report at least once a year and review each item line by line. Some credit report information could be wrong and it could negatively impact your ability to borrow money. Check for errors and if you find any, contact the credit bureau that supplied the information immediately.

Series premiered Tuesday July 7, at 8/7c.

Get an eyeful of Padua High, where the Stratford sisters are new, and life is very different. Meet Kat, Bianca, their over-protective dad and some of the kids they’ll be dealing with this summer, when “10 Things I Hate About You” debuts on ABC Family.

Talking to Kids About Money

Family Finance

Kids & Cash

Many 18-year-olds have left high school armed with a knowledge of U.S. history and calculus, but no experience with the realities of car loans and college tuition.

Having those first conversations with children regarding spending on tuition and making out a budget can be challenging.
 

“Don’t keep your child in the dark about finances,” says Adam Carroll, chief education officer with National Financial Educators. “Throw the whole money taboo out the window. It’s okay to discuss what money realities with them.”
 

Tad Barton is on a mission to help children understand those money realities. Barton teaches business courses at John W. North High School at 1550 Third Street in Riverside. He currently teaches 150 students in the school’s Global Business Information Technology (GBIT) Academy. In their sophomore year, students take an intro to business technology course, which teaches them skills such as Excel and Web design. In their junior year, they take an economics and entrepreneurship class, which teaches them how to invest, budget and spend wisely. Finally, in their senior year, students take over the management of the GBIT Academy’s online news magazine (www.motoricon.com), which allows each graduating class the opportunity to leave their mark on the site’s design and content.
 

“The kids really learn how to keep a budget, invest in the stock market and balance their finances. Instead of giving them a letter grade, we pay them money and monitor how they use that money as they are asked to find a place to live and budget in expenses. They succeed based on their financial responsibility. It’s very hands on. Instead of reading about it, they have to perform it,” Barton says. “No matter what job they get out of school, with these skills in place they are prepared to manage their money responsibly.”

Elizabeth Galindo, a senior at North High School, is vice president of the school’s Investor’s Club and Future Business Leaders of America. “The classes help me see the importance of every financial decision I make and how important budgeting is. Now I know how much I can spend on things,” Galindo says. “Our economy got into this mess because people overspent and got into debt. I don’t want that to happen to me. These classes empower me with financial independence and security.”

With the right kind of financial education, both at home and at school, the next generation is bound to be smarter and more secure than its parents.