Thursday, April 03, 2014

The Importance of Doing Something Different

I recently opened a new account with First Entertainment Federal Credit Union out here in Los Angeles. I didn't do this because they were offering me the best loan rates or mobile banking platforms. I didn't even do it because they were offering the best checking and savings rates. Those were the basics. Those were elements that EVERY financial institution I looked at offered. I did it because we had opened up our kids' accounts there. And we did that because they were offering something NO ONE else was -- a 5% return on the first $500 our kids saved with them. That rate was above and beyond what I found at any other credit union or bank. It was a "special perk" that they offered for their youth members and it stood out to me and my wife.

I am not writing about this to promote my company's youth marketing program. Heck, they don't even have our Money Mammals youth marketing and education program at First Entertainment. I just want to make the point that it's absolutely essential for marketers to think about how they can differentiate themselves from the pack.

That's just my two cents for this America Saves Week and National Youth Financial Literacy Month.

Friday, January 17, 2014

MoneyBuddy's 2014 Award Winner

MoneyBuddy AwardsI'm very excited to announce that we are a MoneyBuddy's 2014 "Best Money Saving Blog For Kids" Award Winner.

Click here for more.

Longer Term Savings and the Save Jar

I just had a nice conversation with a friend who is implementing the Share, Save & Spend Smart Money Mammals allowance system for his six- and eight-year-old kids. You can see my previous post for more detail about how to set this up. Anyhow, he found our system to be sufficiently clear except for teaching the concept of longer-term or "rainy day" savings. 

I told him that the longer-term saving could wait a bit and that Save money was best put into the Save jar. I suggested he work with his kids to set a goal that they could achieve in a relatively short amount of time.  A long enough time to get a feel for the power of delayed gratification, but not too long to be frustrating. Saving for something over a period of time (albeit a short one) is a powerful lesson for kids (well, actually, anyone). I suggested that he encourage them to save for something over two to three months for their first goal.  Then, I advised him to have his kids purchase the items they saved for using the funds in the Save jar. It's important to give them ownership of the process.

While the initial allowance payment would be focused on goals, I told him to eventually (withinthree-six months) open up an account for his kids for even longer-term savings. This would give them some time to get used to the allowance process, save for a goal(s) and to just generally get comfortable with handling money and making money choices (including some smart ones and maybe some not-so-smart ones). 

As a side note, when it was time to open an account for our kids, my wife -- being the Money Mammal that she is -- found a credit union that paid seven percent on the first $500 of deposits. Nice! This was a meaningful interest rate that helped convince my kids that longer term savings IS worthwhile. It also may be helpful to point out that most of the money in my kids' accounts (they areeight and ten) has come from gifts, although they've made a few small deposits from their Save jars from time to time. So, they use both the account AND the Save jar, even to this day.

My two cents for this Friday.

Friday, January 10, 2014

Take Five Short Minutes to Set Up an Allowance System

I always liked the idea of KISS (you know, Keep It Simple Stupid), but I never liked what the last S stood for. Referring to yourself or anyone else as stupid never felt like it was in the ethos of the general idea - stop complicating things and move forward on whatever you're doing by taking the simplest path. Don't knock yourself down. Build yourself up.

Anyway, it got me thinking about my passionate belief in the importance of allowance, doing it right and how I might be able to provide the most KISS-friendly solution to parents. So here it goes...a way to get your child started learning how to handle money and make smart money choices in three easy steps and just five minutes...

1. Setup a THREE JAR SYSTEM - Share, Save, Spend Smart. That's it. Find some jars, write down these words and paste them on those jars. Simple.

2. Start an ALLOWANCE. Provide your child with $5 and have her put $3 in Spend Smart, $1 in Save and $1 in Share. Simply explain that the Spend Smart jar is for immediate expenses - mechanical pencils are a favorite right now, for example. Save is the jar for longer term items. Want a scooter? Set a goal (see below) and start saving. Want to get it faster? Put your Spend Smart money into Save. Once they've accumulated some money in their Share jar, have him bring it to your religious institution or have her bring it into school (schools usually have some type of cash drive going).

3. Have him SET A GOAL. This is HUGE. Find a goal in the $15-$30 range and have her start saving. Keep the goal small so it's something he can achieve in 2-3 months. Maybe even split the cost with her to help out.

So there you have it, the KISS method for starting your kids on the path to financial literacy. This is all about building habits (your providing allowance and guidance and your child making choices every week). Once you get started, you'll likely want more detail. Check out my video on Effective Allowance from my last post for clarity on how and why to do more.

I have much more on The Money Mammals Vimeo channel - interviews and other short videos to help you along in the process. I hope this helps. Please let me know if there's anything we or I can do better.

And, remember, Keep It Simple, Smarty!

p.s. Taking a page from Chris Brogan, I want to give you a little warning that this postscript includes a little "Selly, Sell Sell." If you want jars that look as smart as those pictured above, we sell them as part of our Family Kit online. Click here to take a look in The Money Mammals online store.

Friday, October 04, 2013

Effective Allowance

I created this video to help parents setup and run a simple, effective allowance that will teach their kids about the value of money. Please comment, forward or do anything else to help me spread the message of the importance of allowance and how simple it is to get started. Thanks!

Effective Allowance Webinar from The Money Mammals on Vimeo.

Wednesday, October 02, 2013

Virtual Finance

Interesting infographic. More relevant to me now that my 10-year-old is trying out FamZoo and learning about the importance of understanding virtual as well as real money...

Real Money, Virtual Wallets
Image compliments of Master of Finance Degrees

Friday, June 21, 2013

Money Mammals TV Spreecast with Joline Godfrey

For my first Money Mammals TV Spreecast, I had the honor of chatting with Joline Godfrey, author of the newly revised "Raising Financially Fit Kids," and founder of Independent Means.

You can find out more about the Camp Startup for kids 14-18-years-old by clicking this link.

Enjoy and let me know if there any other topics you'd like us to cover.