How to Teach Your Children to Be Financially Responsible

How to teach your kids to be financially responsible.

As parents, we all want what is best for our children.

You may often hear parents boast, “I want my kids to have what I didn’t have.”  We want the next generation to be more successful than we are.

Yet, more and more that’s not happening.

“Johnny” is a 54 year old man who still lives with his parents.  He moved out briefly when he married and had two children, but 8 years into the marriage, he and his wife divorced, and he moved back home with his parents.  That was 20 years ago.  He is unemployed and has been for over a decade.  His parents pay his living expenses.

“Renee” is a 27 year old college graduate.  She went to college at an expensive school to get an art history degree.  She is now paying back over $40,000 in student loan debt.  She’s working at the local coffee shop while she looks for a job in her field, though in her small town, such jobs are nearly non-existent.

Unfortunately, these types of situations are more and more common.  As parents, we want to do everything we can for our kids, but often that turns into enabling, which can lead to the situations above.

A far better response is to teach our children to be financially independent at a young age.

Remember, the earlier you start, the more adaptable your children are.  Consider these strategies below…

Here’s How You Help Your Children Be Financially Responsible

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When Does It Make Sense to Automate My Finances and How Do I Get Started?

When does it make sense to automate your finances?

Automating your finances is one way of simplifying your financial life.

When your automate your finances you use your bank, credit card, or service provider’s website to set up automatic transactions on your behalf.  You can automate paying your utility bills, paying your credit card, investing your retirement funds, and many other tasks.

Finance automation is often touted as one of the top ten things you should do to improve your finances.

While having your bills paid on time does help you save time and avoid late fees, completely automating your finances is foolish and nearly impossible to do.

How Automating Your Finances Improves Your Finances

Late fees.  Overdraft fees.  High interest rate penalties.  Missed payments.

All of these items are the result of mismanaging your finances.  Missing one payment can result in your interest rate on your credit card going sky high.  Missing the payment due date on any bill will automatically reward you with a late fee on top of what you already owed.

In short, mismanaged finances end up costing you thousands of dollars with all the fees and higher interest rates you pay.
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7 Reasons We Have Trouble Sticking to Our Budget

Reasons We Can't Stick to Our Budget

Every month, I diligently write out our budget and track how we spend our money. 

Most months we stay close to our target budget.  However, there are some months, especially the winter months when we have a number of expenses due at once, where we struggle to make ends meet.

I’m sure you’ve experienced this as well.

If you struggle with your budget, you’re not alone.  Turns out, there are many reasons why most of us spend more and save less than we should.

Here’s Why We Have So Much Trouble Sticking to Our Budget

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These Big Financial Wins Will Put a Lot of Money in Your Pocket!

these big financial wins put money in your pocket

A look around the personal finance blogosphere will show you a number of different approaches to living a financially rewarding life. 

Some bloggers like Ramit Sethi from I Will Teach You to Be Rich scoff at little cost cutting measures like making your coffee at home instead of stopping by Starbucks, arguing that the way to truly become wealthy comes from making more money, not cutting little corners.

Others like Crystal Paine at Money Saving Mom advocate a frugal lifestyle.

She regularly advertises free deals and ways to be frugal such as using coupons when shopping, menu planning, and taking advantage of free summer activities with kids.  While she does advocate having a side gig if you’re able, her main focus is saving money by spending less money.

Of course, these two strategies combined — earning more money and saving money in all the little ways you spend on a daily basis — are important to growing your net worth.

But there’s also another strategy that may be even more important than cutting corners on routine, small expenditures–cutting corners on large purchases that can save you thousands in one fell swoop.

Saving on large purchases isn’t discussed as much because there’s not an opportunity to save as frequently.  After all, you may go to the coffee shop every day, and you may go out to eat a few times a week, but you’ll likely only buy a new car every five to ten years.

Still, the big purchases can save you as much in one fell swoop as a year’s worth of savings by making your coffee at home.

These Big Financial Wins Rock!

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Lifestyle Inflation: The Silent Killer of Your Finances?

lifestyle inflation: the silent killer of your finances

Chances are, you want to make more money.

Most of us think that a higher income would improve matters in our financial lives.

But would more money really be useful to your long-term financial health?

It could potentially help — as long as you don’t let lifestyle inflation drain away your excess income.

The reality is that when most people earn more money, they spend more money.  If you aren’t careful, lifestyle inflation can destroy all of the benefits that come with a higher income.

You won’t get ahead if you don’t put that money to good use for your future.

What is Lifestyle Inflation?

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Grow Your Dough Throwdown Update – February End – It’s Growing!

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It’s awesome when you see your investments going up!

It’s the kind of feeling that makes you feel powerful; invincible even.

And when your investments go down you feel a pit of despair in your stomach.  “Please go back up some so I can sell and I’ll never invest like that again,” you plead to the investment deities.

Of course this is all good reason you should carefully invest.  It’s not hard to do but if you don’t have the stomach to see your investments fall in value then you’re better off investing in broad sectors (like the S&P 500 or all stocks).  Honestly, most people aren’t that great at picking stocks so your best long-term plan is to stick to sector funds and ETFs.  And even then you might not want to look at your picks too often.

About a month and a half ago I jumped into the Grow Your Dough investment challenge.

This challenge pits a growing number of personal finance writers against each other for a year to invest $1,000 and see whose investments would come out on top.

I chose to pick individual stocks.

If you take a look at the other people in the competition you’ll see a number of different investing strategies.  It’s pretty cool to see how everyone interpreted the challenge.
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Quicken 2014 Deluxe for Windows Giveaway

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Not long ago we told you about the awesomeness that is Quicken Deluxe.

It’s a great bit of software that helps you track your money and create budgets (among other things).  If you’re looking to better understand your money then Quicken is one of the programs you need to check out.

Why am I telling you this?

I was given a promo code for a free copy of Quicken Deluxe 2014 to give to one of my excellent readers!  That could be you! Continue Reading

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