2. Money won’t bring you happiness but it will pay the bills.

3. The simpler your life, the better.

4. Save AS MUCH AS YOU CAN while you’re young. One thing you can never get back is TIME.

5. Choose a vocation you love but make sure you’re willing to live within the budget constraints of that vocation. A teacher isn’t going to be able to have a big fancy house and a fancy car but can still have a comfortable life if they live within a budget.

6. Live within your means (goes along with #5).

7. Stay away from credit card debt. You have been warned.

8. Not having credit card debt will put you in the minority but will open up all kinds of doors for you financially.

9. Understand what a mortgage amortization looks like.

10. Understand the time value of money.

11. Understand the math behind loan calculations.

12. Understand how your credit score is calculated.

13. How to evaluate a student loan and understand the long term implications of the loan.

14. How to create a household budget.

15. Understand asset allocation.

16. How to practice financial PATIENCE! Things will come. Just give it time. You’ll enjoy things much more when you can actually afford them.

17. Don’t buy a new car right out of college. Give yourself some time to adjust first. Don’t rush into anything.

18. Take a money management class with your future spouse before you get married.

19. Understand how income taxes are calculated.

20. Buy nice clothes when they are on sale but don’t use credit cards to pay for them.

21. Buy good insurance but don’t get suckered into something you don’t need.

22. Have enough cash available to be able to raise the deductibles on all your insurance. This will save you a lot of money on insurance premiums.

23. Don’t gamble.

24. When you get a job, do the best job you can regardless of what job you are doing.

25. Leave a job on good terms. NEVER burn bridges.

26. Read lots of books (including the Bible) on personal finance, career, and self-improvement.

27. Help people.

28. Give of your time and money.

29. Max out your company’s 401(k). You’ll get used to living on less.

30. Be thankful for what you have because there always people who have less than you do.

Her statement made me curious so I asked her why it wasn’t fair. She replied, “Because the $14 ones cost more money.”

Trying to seize the moment, I grabbed a couple of blank index cards and held them up.

Me: “If I had these two index cards for sale…one was $5 and one was $3, which one would you want to buy?”

My Daughter: “The one that’s $3.”

Me: “Why?”

My Daughter: “Because it’s less money.”

Silly me. I had expected her to say the $5 card since $5 is bigger than $3. In other words, my daughter is smarter than I thougt she was.

Now, maybe kids are smarter than I thought. I don’t know. I didn’t have a personal finance blog when my boys were really young so I had no desire to quiz them about money except for a few teachable moments. There are lots of cool places I can take today’s conversation. For instance, the next step would be for us to compare the different products to try to figure out why one is more expensive than the other.

Anyway, today’s little episode has sparked a little idea. I’m going to “quiz” my daughter from time-to-time and post the results here. Maybe we can all use these little projects to discuss ideas on how to better prepare our kids for life.

What do you think? Do you like this idea? Let me know what you think.

MSN Money posted an article over the weekend titled, Junior’s 1st Paycheck: $500 at Birth.

I wrote about this program, called ASPIRE, in the past. The goal of ASPIRE is to give EVERY newborn baby a $500 savings account to be used for college, buying a home, or retirement. Babies born into lower-income families can receive more than $500. How much more? $500 for a total of $1,000.

Regardless, let’s focus on the $500. How much could $500 be worth by the time the recipient is ready for college? Not a lot, as my math shows:

Assuming a 10% rate of return (7% after inflation)…

That’s right…$1,690! Yes, this is assuming nothing is added to the account over the years, which is a pretty safe assumption unless the government adds money to the account.

Sure, $1,690 is better than nothing I suppose but what good is it going to do for the recipient? Is it 10% down on a $16,900 house? A semester’s worth of books?

Say the account stays untouched until the recipient retires at age 65. How much will it be worth by then—again assuming nothing is added to the account and we use the same expected returns from the above example?

The MSN Money article I referred to above mentions the reasoning behind this act:

“Having an asset has the potential to change the way people think and plan for their future, and sometimes those effects can be generated just from small asset holdings,” he says, adding that it’s possible for people to build significant savings over time. The ASPIRE Act also would pair the creation of the accounts with financial literacy programs in schools.

I looked up the ASPIRE Act and this is what it says about financial literacy:

The Secretary of the Treasury, in coordination with the Financial Literacy and Education Commission, shall develop programs to promote the financial literacy of account holders of KIDS Accounts and the legal guardians of such account holders who have the rights with respect to such accounts under section 3(h).

Not a lot of focus on financial literacy!

If we REALLY WANT TO HELP PEOPLE we need to be teaching them financial literacy, not giving them $500 or $1,000.

Not only that, with our country mired in debt that is in the trillions, what good is it to allocate roughly $2.1 billion (4.2 million kids born in 2008 × $500) to savings accounts? Doesn’t make a lot of sense to me.

1. New Textbooks. To avoid paying unfathomable new-book prices, see whether your university offers a rental program—or rent from a Web site such as Chegg.com, where you can save up to 85%. Order the book for a one-time fee—for example, about $60 plus shipping for a $180 calculus book—keep it for a semester, then return it with free shipping, or you could buy it. Or, head to the used-book lot. For example, BigWords.com searches the Web for the best prices on used textbooks.

Textbooks are such a ripoff! It’s simply ridiculous that a textbook should cost anywhere near $100, much less several hundreds of dollars. Not only are they expensive but students get ripped off when reselling their textbooks at the end of the semester. I remember keeping my textbooks just so I wouldn’t give the campus bookstore the satisfaction of ripping me off. I still use some of those textbooks.

2. Big Meal Plan. Brain food is important, but avoid loading up your child’s meal account with enough money to feed the football team. It’s best to start with a low number of meals and see how much your student uses. Many colleges will give you the opportunity to replenish the meal plan midyear. You could also supplement your kid’s meal plan with gift cards to the local grocery (or the local pizza joint). Or you can buy gift cards at GiftCertificates.com.

I lived at home while going to college so this wasn’t a priority for me.

3. A High-End Laptop or Desktop Computer. An inexpensive laptop should meet your student’s computer needs. For example, you can buy an Acer Aspire One, which has a 10.1-inch screen and weighs just 2.4 pounds, for less than $300 at Best Buy, WalMart or Target. Be aware, though, that netbooks don’t have DVD drives or huge amounts of storage space, so it’ll cost extra to get plug-in external drives or memory cards.

4. Printer. Here’s what you can save by skipping this unnecessary item: about $50 for a printer, $30 for replacement ink and $9 for a pack of paper. For about $10, your child could buy a flash drive instead, save his 20-page term paper on it and print the paper in the campus computer lab, which you may already be paying for. Some schools include a technology fee in room and board costs—$100 per semester in some cases.

5. Cable TV. These days, you don’t have to foot a hefty cable bill when your child can catch the latest movies and TV shows online. www.Hulu.com, www.Veoh.com and www.Fancast.com let you download current TV shows for free. The movies offered on these sites are slightly old, but you can get a Netflix DVD-rental subscription for as little as $5 a month.

DUH! They are in college! They should be studying…NOT watching TV!

The full list: 10 Things College Students Don’t Need

My Youngest Son with His Wells Fargo Youth Cash Card

Remember back in December when I wrote about how I was rethinking my kids’ allowances? Well, it’s been a little over six months since we opened youth cash cards for our kids and I thought it would be good to give you an update.

So far, so good!

Not every bank offers youth cash cards. We bank with Wells Fargo and they offer them (unfortunately, I did a search on Wells Fargo’s website and didn’t find much information so you’ll probably need to speak to a banker).

Our boys love them. They don’t have to worry about cash. They can take their cards with them wherever they go and use them just like a debit card. Several of the merchants we have gone to have made comments about the kids using a debit card, which I thought was kind of cool. A couple of them wouldn’t accept the cards because they were suspicious of the fact that they were kids. But, for the most part, I would say this has been a success.

I set up my account to automatically deposit their allowances on the 1st of every month. It forces the boys to budget their money, which I think is a good thing.

One frustrating aspect was the fact that the boys weren’t very good at keeping track of their balances and were always asking me to check them for them (they don’t have web access). I showed them how to keep track of their balance in a journal and they did pretty good with that. Then I figured out that they could check their balance over the phone and showed them how to do that.

I get their statements sent to me once a month so they know that I or their mother will see everything they spend. I also have access to their accounts through my online account. The boys don’t have access to their accounts online, which is okay with me.

Anyway, for those of you looking for a solution to giving kids cash in a cashless society, I would recommend you look into getting them a youth cash card.

So, the author decided to set up his own bank for his two kids. In order to inspire them to save, he decided to pay them 5% per month on their money and he kept track of their accounts using Quicken. To get an idea of how generous that is, a $100 deposited in the First National Bank of Dad would grow to nearly $180 in one year. That’s an 80% annual rate of return.

His goal as a parent was to teach his kids financial responsibility and his theory was that IF he gave his kids an incentive to save, that they would save on their own with no prompting. According to the author, his plan worked. His kids didn’t feel the pressure to spend money haphazzardly for fear of mom and dad snatching it away from them and stashing it in some bank account where it couldn’t be touched.

He also took a very hands-off approach with how his kids spent their money. His belief was that kids have to learn the consequences of their actions and the only way they can do that is to feel 100% ownership of their money. Enough mistakes with their money and they will eventually learn. It’s a bit of a leap of faith but I agree with the author. If kids are constantly being told what they can and can’t do with their money (I have been guilty of this a time or two), they will never consider it theirs.

I think this is very wise thinking—even if it means that kids make some mistakes. Most likely it’s better to learn from their mistakes when they are young than to have learn when they older and the stakes are much higher. Therefore, I’m going to take a more hands-off approach with my kids.

There are several other interesting ideas I read in the book that I’m going to cover in separate posts. I think this will be a fun series of posts.

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Of the following, which are the most important lessons in saving and investing for parents to teach their children?

Select up to two options:

A. Live within your means

B. Begin saving at an early age

C. Avoid high interest debt

D. Get sound financial advice from a trustworthy resource

E. Learn how to invest wisely

Personally, I think ALL OF THE ANSWERS ARE IMPORTANT and I think ALL PARENTS would be wise to teach their kids these lessons.

But…

The survey asked for two suggestions so I chose A and B, which was in agreement with the majority of Generation X survey-takers. Avoiding high interest debt is also important but would be moot IF kids were taught to save at an early age. Like I said, all of the lessons are important.

Which two do you think are most important and why?

Take the Schwab Survey.

In our current economic climate, many adults are worrying about their retirement funds, job security and house foreclosures. With all the anxiety, people have forgotten about one key group that this situation can greatly affect – America’s teens. Junior Achievement and The Allstate Foundation conducted a poll of U.S. teenagers to gauge their thoughts on the economy, with some surprising statistics:

• More than 50 percent say they talk about the economy with their friends.

• 53 percent of teens surveyed say they’re choosing activities that cost less money.

• Nearly three-in-ten teens (29 percent) said that the economy is causing them anxiety.

• One-third of all teens report less job availability.

• More than three-quarters (77 percent) of the teens polled say that their parents are talking about the economy more than they used to.

• Nearly half (49 percent) said their parents had discussed family finances with them as a result of the economy.

Even though this group may not be watching the five o’clock news, they’re keeping informed on the status of our nation’s economy and adjusting accordingly. What about the teens in your life- how are they dealing with it? Take this as an opportunity to discuss it with them if you haven’t yet.

Programs such as JA Economics for Success, created by Junior Achievement and The Allstate Foundation, teach middle school aged teenagers money management skills. There are also now 12 free downloadable lessons that teach age-appropriate concepts around budgeting, saving, spending and investing.

Stay connected with the latest news going on with Junior Achievement by becoming a fan of the JA Worldwide Facebook page. Find ways to volunteer, stay connected, share your JA story and learn about the latest JA happenings all over the globe. For up to the minute news, follow JA on Twitter at @JAworldwide.

The 2009 Teens and Personal Finance poll was conducted by Opinion Research Corporation the week of February 23, 2009, and surveyed 1,000 U.S. teens ages 12-17 via telephone. Its margin of error is +/- 3.2 percent.

About Junior Achievement® (JA)

Junior Achievement is the world’s largest organization dedicated to inspiring and preparing young people to succeed in a global economy. Through a dedicated volunteer network, Junior Achievement provides in-school and after-school programs for students which focus on three key content areas: work readiness, entrepreneurship, and financial literacy. Today, 137 individual area operations reach more than four million students in the United States, with an additional five million students served by operations in 123 other countries worldwide. For more information, visit www.ja.org.

The Allstate Foundation

Established in 1952, The Allstate Foundation is an independent, charitable organization made possible by subsidiaries of The Allstate Corporation. The Allstate Foundation partners with non-profit organizations on community initiatives that promote “safe and vital communities,” “tolerance, inclusion, and diversity” and “economic empowerment.” Teen driving and empowering victims of domestic violence have been major initiatives for the Foundation since 2005. For more information visit ProtectTeenDrivers.com or ClicktoEmpower.com.

Finding the time and energy to make your children’s school lunches interesting, healthy and inexpensive is a challenge that many parents face. By planning ahead, shopping smart and communicating with your children, you can save money and also teach your kids a valuable lesson about saving.

• Communicate with Your Children

No matter how healthy or seemingly delicious a lunch may be, if you aren’t communicating with your kids about what they enjoy, you could be wasting incalculable amounts of money on items they aren’t eating at lunch. This by no means gives them total access to everything on the grocery store shelves, but by providing options and getting children involved in the conversation, you ensure that you’re feeding them what they need AND want.

• Plan Ahead

After discussing lunch items with your kids, make a shopping list and stick to it. If this means getting a neighbor or sitter to watch your kids while you shop to avoid checkout line tantrums, do it. By setting a weekly lunch budget, making a list and sticking to it, you’ll know exactly how much you’re spending and can look for ways to possibly save even more. Instead of buying snack packs of their favorite chips or crackers, buy in bulk and portion out in baggies every Sunday evening. This is a great activity to involve your children in and then explain why you’re doing it. Who says they can only learn at school?

• Shop Smart

Even those shoppers with the best intentions and extensive lists can be thrown by a flashy display or “big” sale. It’s important to be well-informed and be an investigative shopper. Be prepared to change your mind, as long as the sale items are really that. Instead of looking at the flashy price tag, look at the smaller price per unit/ounce also on the tag. That’s where you’ll be able to see real savings. The most important thing to keep in mind though is whether or not your kids will consume it.

If you already keep track of your grocery budget, hopefully you’ll begin to see that number dwindle as you take the above steps. Share with your children how much you are saving thanks to your diligence. Next, discuss a way to use the money to reward you both. Whether this is on a new toy, a special dinner or a deposit into a special college savings account for your children, by showing them the direct rewards that can come from saving, you can help instill this habit in them while they’re young.

Stay connected with the latest news going on with Junior Achievement by becoming a fan of the JA Worldwide Facebook page. Find ways to volunteer, stay connected, share your JA story and learn about the latest JA happenings all over the globe. For up to the minute news, follow JA on Twitter at @JAworldwide.

About Junior Achievement® (JA)

Junior Achievement is the world’s largest organization dedicated to inspiring and preparing young people to succeed in a global economy. Through a dedicated volunteer network, Junior Achievement provides in-school and after-school programs for students which focus on three key content areas: work readiness, entrepreneurship, and financial literacy. Today, 137 individual area operations reach more than four million students in the United States, with an additional five million students served by operations in 123 other countries worldwide. For more information, visit www.ja.org.

While she was working, the house pretty much became a hellhole. It was a disaster. Why? Well for one, I’m kinda lazy. The second reason was that we didn’t have a plan for who does what. Sure, my boys have had chores that they are supposed to do but the timing of those chores was kind of vague.

We needed a plan.

So, this past weekend, I put one together, showed it to my wife, and instituted it. The boys were griping and complaining at first but the results have been wonderful so far (yes, it’s only been day 3 but I like what I’m seeing so far). The plan is still a work in progress but so far, so good.

The first part of the plan was to simply make a schedule for when things should get done. It looks like this:

The second part is their daily chores:

When I presented this to the boys they didn’t like it because they thought it would take up too much of their time. But, what we have found is that they actually have MORE time because they’re not wasting time. They also like it because there are no surprises. And, since they have their chores, I’m not asking them to do other stuff.

Yesterday morning I was getting my shower and I heard the vacuum cleaner going (and I didn’t have to tell anyone to do it). My son did scold me because the schedule said that it should only take 10 minutes to vacuum but it took him longer. I told him to vacuum faster…lol.

The goal of all this is to have some sort of balance in our household. Our typical routine is to mess the house up all week long and clean it on the weekends. That sucks. Who wants to spend the weekend cleaning? Not I! If this plan works, spending the weekend cleaning will be a thing of the past.

Let’s hope it works…