3 Bad Money Habits You’re Passing on to Your Children

It can be easy to forget in our busy day-to-day lives, that our children are paying close attention to our words and actions. They emulate what they see around them and grow increasingly impressionable with age. It’s important to positively influence them by demonstrating proper behaviors and habits they can learn from. When it comes to finances, there are a variety of ways you can properly educate your children, including discouraging them from practicing these three bad money habits.

Impulse buying

When you go shopping do you follow a set shopping list? If your answer is “no” and you shop with your children, it’s time to start sticking to your plan. When you’re shopping, and grabbing things without any forethought, you are showing your children that sticking to a budget is not your priority. They may also view your impulse shopping as disorganized and unstructured. Instead, instill in them the importance of writing down a plan and getting only what’s necessary, to stay on the right track with spending.

Not talking about money

As children get older and they begin to understand the value of money, it’s important they are taught to be open about financial issues. Some view money matters as difficult or awkward to talk about. But, when it comes to building confidence in your children, it’s vital they learn the skills necessary to effectively manage their personal finances. Developing healthy financial habits from an early age is extremely important and it begins with everyday conservations.

Living above your means

If your child asks for something at the store, but you don’t have the money to buy it, it’s okay to use that old saying, “money doesn’t grow on trees.” So many Americans live outside of their means in an effort to “keep up with the Joneses.” Instead of raising entitled children that expect everything no matter how tight funds are, teach them the importance of differentiating between “wants” and “needs.” Help them understand that it’s okay to splurge on occasion, but it’s more important to budget and save in order to maintain good financial standing for a happy, stress-free life.

Article Source: Wendy Moody for CUInsight.com

Back to School on a Budget

Summer is coming to a close, and back to school season is officially upon us.  Along with all the nostalgia and excitement this time of year brings, it can also get expensive – and fast.

“When did Crayola markers raise their prices? HOW much for a spiral notebook? Why do my kids need 12 of everything?!”

Here are some tips to help you stay in your back to school budget, and enjoy the last few weeks of summer.

1. Use the dollar store.

The dollar store is your friend! From notebooks and folders in every color, to pencils and loose paper – you can find 80% of the items your kids will need for the upcoming school year. Let’s all “just say no” to spending $9.99 on a box of crayons.

2. Budget and save in advance.

It’s easy to forget about the annual expenses associated with the back to school season. If you didn’t budget this year, start saving now for next school year. Put aside a little extra in your savings account on a monthly basis, and then use it next summer instead of relying on your credit card and racking up interest.

3. Have your kids save their own money for back to school clothes shopping.

New clothes and shoes are a very exciting (and very expensive) part of back to school shopping. Summer is the perfect time to teach your kids about the importance of saving, budgeting, and managing money. Whether it’s through extra chores, an after school job, or a lemonade stand, there are plenty of opportunities for your kids to earn money toward new clothes and shoes for the coming school year.

4. Buy in bulk and shop sales.

Stores like Costco and Sam’s Club offer great discounts when buying in bulk, and many other stores now offer lower prices when you buy in large quantities. Also, don’t forget to shop sales! It may be old school, but flipping through newspaper ads and store circulars that have coupons, can save you a ton of money when it comes to back to school shopping. Or sign up for emails for the stores you shop at – then use the e-coupons they send you.

5. Use a prepaid card.

Part of what makes back-to-school shopping so fun for kids is the opportunity to pick out items they love on their own. Does your high school or college student have a First Family Student Prepaid Reloadable card from First Financial? Give them easy access to back to school shopping money, and a surefire way to make sure their spending is convenient for you as a parent, secure, and won’t break your budget. Learn more here, and you can easily load your prepaid card right online 24/7 or stop into your nearest First Financial branch – just in time for the new school year.*

*3rd party fees may apply for Debit or ATM transactions. Foreign transaction fees may apply for transactions processed outside of US. A First Financial Visa® Prepaid Card can only be reloaded by a First Financial FCU Checking Account, Debit Card, or Credit Card online. A First Financial membership is required to obtain a Visa® Prepaid Card. A First Financial membership is open to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties, NJ. A $5 deposit in a base savings account is required for credit union membership prior to opening any account/loan. See credit union for details. Other terms/conditions and fees may apply. Federally insured by NCUA.

Article Source: Naomi Anderson for CUInsight.com

 

Teach Your Kids to Take a Stand — A Lemonade Stand

Long before Beyoncé transformed it into a cultural touchpoint, lemonade was the commodity of choice for childhood business ventures. Perhaps you had a lemonade stand of your own, or maybe you just knew someone who did. Either way, the memories of ice-cold refreshment probably ride on a warm wave of nostalgia. If your enterprise was especially successful, you might even hear a faint “cha-ching” as you reminisce.

Fast forward a decade or two, and now you find yourself juggling the demands of family, friends, and career. Thanks to the latest technology, it’s easy to let your kids spend their summer vacation drifting along on a digital stream of Snapchat streaks and Fortnite marathons. With the dog days of summer approaching, you have a perfect opportunity to shake up your child’s summertime routine with a little old school entrepreneurship. It’s time to bring back the lemonade stand!

Let your kids in on the fun. When you were young, running a lemonade stand didn’t feel like a job—it felt like freedom. So, don’t worry that encouraging your children to work will somehow rob them of their summertime fun. The venture can be fun, and the lessons they learn from operating a small business can last a lifetime.

Goal setting

Believe it or not, this one comes pretty naturally to kids. If you ask them what they want to do with the money they earn, they’ll probably have at least one goal already in mind. It may be a video game, a bike, or new clothes, but whatever it is, their motivation won’t be hard to find. When they finally save up enough to buy what they want, the sense of accomplishment will be something you can build on for the rest of their life.

Entrepreneurship

Operating a lemonade stand is an excellent way to help your children learn that it costs money to create something. After all, lemons and sugar aren’t free. Understanding economic concepts like cost of goods and profit margins, will give your kids a valuable perspective with real-world applications. As they plan their drink prices, let them decide what to charge. Positive or negative, the lessons they learn from experience will help them with future budgeting.

Responsibility

Like many things in life, lemonade stands are super fun at the beginning! But after a few hours sitting in the sun or waiting out a thunderstorm, there’s a pretty good chance your little entrepreneur will want to close up shop. While it may be frustrating (for you and them), this scenario provides an excellent opportunity to teach them that you can’t just walk away when you get bored. And let’s be honest, we can all use this reminder from time to time, can’t we?

Creativity

Challenge your child to think about how to separate themselves from their competition. (Of course, this may be hypothetical competition since modern-day lemonade stands are probably few and far between). Depending upon their age, your little one may focus on colorful sign design at first. This focus is understandable, since making the sign is half the fun. But beyond that, feel free to offer creative suggestions. Could they provide a sugar-free alternative? Maybe offer an iced coffee alternative to appeal to more customers? How about spreading the word with a social media post? Should they accept payment through Venmo or PayPal, or just keep it cash only? Like a child’s imagination, the options are limitless. So is the fun!

At this point, you may feel like opening up a lemonade stand whether your kids are interested or not! Channel that excitement and energy into helping them see the fun-filled potential of the idea, and don’t be afraid to get in there and help them when they need it. The time spent together will be even more valuable than the money earned and the lessons learned.

Happy summer lemonading!

Congrats Graduate! 4 Things to Do with Your Gift Money

Cash tops the list of popular graduation gifts year in and year out. If it’s your turn to don a cap and gown this year, congratulations – you probably pocketed a significant amount of change along with your achievement. So, what are you going to do with it?

Since we tend to view graduation gifts as a form of “extra” money (a psychological money trap known as mental accounting), it can be tempting to quickly reach for that wish list. Before you do though, consider these four ways you can use it to both celebrate your achievement and give yourself a better financial foundation for the future.

1. Celebrate the present.

You’ve achieved something important, so go ahead — spend some of that money on yourself, any way you’d like. Instead of blowing the whole sum, financial advisors recommend setting aside about 10% for yourself. If your cash gifts totaled the $1000, that still gives you $100 to spend on clothes, electronics, entertainment – whatever.

2. Invest in your future.

With the other 90%, one good choice is to invest in tools that will help you succeed in your next life steps. If you are jumping into a high tech job, maybe you’d like a new laptop or specialized software you could use to make work life more efficient.

There are also other practical needs like expensive furniture and household goods if you are moving out. Although the return can be harder to quantify, putting some of your graduation gift money toward these expenses is an investment in yourself.

3. Save for the future.

Graduation cash doesn’t have to burn a hole in your pocket – it’s okay if you don’t have a plan for it right away. In fact, saving it is a very good plan. If you’re already on a budget or would like to start, treat your graduation money like income and apply the 50/20/30 rule. Savings is the 20%, so calculate this much and set it aside.

Although you can certainly save for the future in terms of life after high school or college, you may need to first focus on shorter-term needs like living expenses. One of the best places to save your cash is in a separate savings account (or an account you won’t be using for daily purchases). Since you won’t see or use this money all the time, you’ll feel less tempted to spend the funds on impulse purchases.

4. Invest for your future.

Investing in your future is important, but so is investing for your future. For young investors, many financial advisors recommend mutual funds with low-cost index funds. The key is to choose an option that doesn’t require extensive management, knowledge, or risk, especially when you’re just getting started.

The amount you invest isn’t so important; after all, your money and your salary will grow for decades to come. They key is to start learning the ins and outs of investing. Not only will this give you another, potentially more profitable savings channel, you’ll learn solid investment management skills that will set you up for the future when you need to properly allocate the wealth you will accumulate for the rest of your life.

Questions about investments? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, contact us at 732.312.1500 or stop in to see us!*

Regardless of how little or much your graduation cash amounts to, determine to enjoy a little, save a little, invest in yourself, and plan for the future. The way you choose to use this money can set a trend of how you’ll manage your money for years to come, so let it be a good one!

*Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Article Source: Jessica Sommerfield for moneyning.com

 

5 Inexpensive Ways to Keep Your Kids Busy This Summer

Kids can be expensive. During the school year, everything from dance shoes to field trips, can feel like it costs an arm and a leg. Once school is out, your kids can sometimes be more expensive. If you’re looking to be frugal and still have fun, here are a few ways you can save and keep your kids busy this summer.

Throw backyard movie nights: Have a big TV or a projector? Add some cool yard lights and some blankets or patio furniture, and you’ll be ready to host every kid on the cul-de-sac. Or hold a family movie night outdoors, just yourselves.

Check out museums: Growing up, the word “museum” always seemed boring. But the museums they have now are far from dull! If your town doesn’t currently have one, here are some great options that may be within driving distance.

Cook something up: When the summer is heat is blazing, it’s always great to have things to do indoors. This is the perfect opportunity to teach your kids how to cook. Have them help prepare fun lunches and dinners, and one of these days you may be able to take a few shifts off from chef duty. Start with baking and you’ll be guaranteed to have some delicious treats around this summer.

Go to the park: Every town has a public park, and most of them have lots of things to do. There are also National Parks all over the country that can be educational and provide some exercise as well.

Head to the pool: A lot of neighborhoods have pools and if yours doesn’t, you probably know a friend or relative who does. Taking the kids swimming is a great way to allow your kids to burn off some energy, and also give you the chance to soak up some sun and relax.

Article Source: John Pettit for CUInsight.com

Personal Finance Lessons Students Should Learn Before Graduation

How to make a budget.

It all starts with the budget. Here, students can compare earnings to expenses. It will give them insight into the value of a dollar. With a budget, students can plan for major purchases, eliminate debt and create good saving habits. Check out our budgeting guide here!

How to balance a checkbook.

While few people probably write checks anymore, students should still know how to balance a register. Even if they prefer to use an app to help keep up with their funds, the basic accounting skills they’ll gain from an old-fashioned register will give them insight into how their money flows. It will also teach them that even financial institutions can make mistakes, so it’s good to check the account for errors or fraud on a regular basis.

The real cost of credit cards.

Credit cards have advantages, but as anyone who’s gone into debt knows, those advantages can come at a significant cost if card holders aren’t careful. Understanding how compound interest works and what that $40 shirt will cost them if they take years to pay it off – will help them make wise choices with their credit.

How to build good credit.

Good credit can save them exponentially over a lifetime. Everything from home and auto loans, to job applications will be affected by a person’s credit score. Teaching students about what makes their score good, how to build it and how to monitor it will set them up for years of success.

What to do when it goes wrong.

Having a financial backup plan can make the difference between disaster and survival, when a major catastrophe strikes. Tools such as health and homeowners insurance and a savings account are critical, but increasing numbers of Americans do not employ these resources. Teach students how to plan ahead of time so they can weather inevitable disasters successfully.

Article Source: Jennifer Reynolds for CUInsight.com