As far as I’m concerned, it’s never too early to learn how to manage money.  Just ask my 6-1/2 year old grandson Morgan.  I started having conversations with him about money when he was a toddler and started saying:  “I want.” 

Those early little chats started with semantics.  I’d ask:  “Morgan, do you need that or do you want that?”  And I explained the difference between a need and a want:  a need was something I agreed was so important that I’d help him get it (aka buy it for him); a want was something he’d like but didn’t have to have  so his piggy bank would need to pay for it.

Repetition worked.  And as he got older, he came to understand that repetition was just another word for consistency when it came to money conversations with me – Grandma GoGo.

Which brings me to the subject of kids and allowances.  True – there are different schools of thought when it comes to giving a child an allowance.  But it’s a conversation that happens in just about every household whether the family income is large or small. 

Many people believe an allowance is an essential stepping-stone to learning the value of money.  Others don’t agree.  As a financial journalist, a mother and grandmother of two young children (Morgan’s little sister Savannah is my other grandlittle and she’s 2-1/2) I believe allowances allow parents to help guide their children onto the road to financial responsibility.

Every household will have different ways of approaching allowances, but if you choose to accept the “give them an allowance school of thought” - there are some concrete ways manage allowances successfully.

So how do you get started?  The best time to introduce the idea of an allowance is when your child can count dollars and coins and understands the concept of prices.  Some money specialists say this is usually around 5 or 6 years old. 

Then the big question is – how much allowance should you give?  The answer is – there’s no one-amount-fits all suggestion – although lots of studies say the rule of thumb is a dollar for every year of age.  That might not be appropriate for everyone and it also depends on the frequency of the allowance – which I suggest be weekly because then there’s a consistency and continuity to the money management lessons.

Some things to consider when deciding how much:

• Your child’s age.  You want to make sure to give room for increases as your child gets older.  So be careful not to start with too high a number for younger children.
• Your family income.   The only way to teach financial responsibility is to practice it.   Your child’s allowance must fit within your family budget. 
• What the allowance will pay for.  If you expect your teenager to pay for his or her clothes with their allowance, you might consider a higher amount than if you will continue buying their clothing for them.
• Before handing over any allowance money – teach the money basics.   Discuss the difference between needs and wants, saving, spending, investing, donating, and of course – earning. 
• Encourage your children to keep records.  Help them get a better understanding of their allowance money “activity” by having them keep a simple accounting of what’s spent (and hopefully what’s saved) in a notebook.  You’ll be able to use that to “show them the money” lessons when needed to make your point and/or to congratulate them on good management.
• Give allowance in denominations that encourage saving.    For example, for $5 give five one-dollar bills and suggest that at least $1 be set aside for savings.  Then explain that if they chose to save all their allowance, $5 a week at 6% interest compounded quarterly will total about $266 after one year and $3,527 after ten years.  For some children, this straightforward information about what they’ll later come to know as the magic of compounding – will cause the savings bug to bite.

As for whether allowances should be tied to chores – money specialists are divided.  Some think it’s important that children see the value of work to earn money.  Others think chores should always be done as part of the family needs - separate from the allowance. And then there are those who advocate finding a way to blend the two by putting a value on specific chores.

However you decide to teach your children about money through allowances – good for you!  The fact that you’re introducing the concept of earning money is a big step towards growing their financial knowledge.

Here’s to your health and wealth.

TAGS: Allowances, financial responsibility, Kids and money, needs and wants

Dr. Pam Erhardt, Managing Partner of my consulting firm Corporate Coaching International, wrote these tips for our monthly client newsletter. They’re something from which we can all learn and benefit. 

For most of us, work is a constant stream of e-mails, instant messages, phone calls, notes, files, requests – and oh yes, back-to-back meetings.  As Leo Babauta, author of The Power of Less says, “We are drinking from a fire hose of information, with no idea how to reduce the flow.”  Babauta suggests that we can find a middle ground by focusing on what’s truly important and organizing our day (and our lives) around those priorities.

In another must-read for those of us on the treadmill of life, Less: Accomplishing More by Doing Less, Marc Lesser suggests that in addition to simplifying our lives, we must “find the one who is not busy.”  That is the calm, clear voice within you that remembers who you are and why you are here in the midst of any activity.  Sometimes we hear that voice, but more often we’re not listening – because we’re too busy.

Here are six tips for finding the gauge on that fire hose and slowing the flow to a reasonable stream.  They are deceptively simple yet, along with coaching my clients to do the same, I’ve been working on them for many years:

• Develop your attention muscle.  Attention illuminates our experiences and perceptions of ourselves and others.  In many ways, if we didn’t “pay attention,” then it didn’t happen or at least, we didn’t notice.  Practice being present in the moment to develop your attention muscle.

• Define the essential goals, tasks, or elements.  Identify those things that are most important for your day, a project, or your career.  Then before doing anything else, work on that first task and get it done.  By focusing your attention on the essential elements you are maximizing your time and energy. 

• Apply limitations and simplify.  One of my clients, overwhelmed by e-mail, found that other more important tasks weren’t being accomplished.  He now checks it at the beginning and end of his day.  This allows him to deal with important issues, yet leave time for his “essential goals and tasks” during the middle of his day when he’s most productive.  He reports that he’s getting much more done these days.

• Start small.  A runner who is used to a 2 mile run isn’t ready for a marathon.  Start working on something achievable.  For instance, if you’ve decided to limit the time on e-mail, define how much time you spend now, decide what your ideal is, and define your goal as a 30% decrease.  Then test it out and see if that limit works for you.  Then revise accordingly.

• Resist the pull into chaos around you.  As you start doing these things you will notice how frenetic those around you are.  It might even make you feel guilty.  Don’t give in to the mistaken belief that busy = productive.

• Practice, practice, practice.  Research tells us that it takes at least a year to effectively eliminate an old habit.  Be kind to yourself.  Remind yourself frequently why you’re doing this.  Celebrate it with post-it reminders on your desk, car dashboard, screensaver or wherever else your eyes frequently pass during the day.  Occasionally take stock of how much more calm and productive you are.   You have nothing to lose and may even start enjoying your life again!

TAGS: Dr. Pam Erhardt, multitasking, The Power of Less. Accomplishing More by Doing Less

I’m happy to share a guest post by Julie Kraut, author of the new novel Slept Away and co-author of Hot Mess: Summer in the City, for which I interviewed her for this blog. Julie is a great young writer and generous in her advice to aspiring scribes.  Here are her top tips:

There aren’t any reality shows about finding America’s next top writer.  And I’m not saying there should be.  I know that my writing process—sitting in front of a computer silently willing myself to focus instead of Google ex-boyfriends from college—wouldn’t make scintillating television programming.  But still, without a Simon or Tyra barking directives from the television, an aspiring author might feel left in a lurch when it comes to launching a career.  So, Lindsey asked me to write some tips on starting a writing career.  And while this is a tough request as there’s no one path to follow to writing success or specific way to guarantee getting published, there are a few writerly must-do’s when you’re getting started.

1. Write. Writing is a pretty huge part of being a writer.  That sentence might read stupid obvious, but it’s a fact that writing’s easy to talk about and hard to do.  Having a book idea or writing aspirations is one thing, but churning out the pages to back those ambitions up is a completely different thing.  So put your fingers to the keyboard, pen to the page, or quill to the parchment, and get writing.

2. Share. As hard as writing is, sharing your writing can be even harder.  But you can’t get published if your work never leaves your hard drive.  So, don’t be afraid of other people’s eyes on your words or editorial feedback.  In fact, you should seek it out.

3. Read. Read as much as you can, and not just from the genre you’re writing.  Read everything from literary memoir to paranormal romance to the instructional poster about hand washing in your dermatologist’s office.  Inspiration and influence comes from everywhere and seeing how others are practicing the craft can be very motivational.

4. Toot. Toot your own horn because, to paraphrase someone famous and philosophical, if you’re not tooting your own horn, who is?  Let people know that you’re not just a writer, but an awesome writer.  Tell the world how funny/poignant/lyrical/thrilling your work is.  How else are they going to know?

5. Live. Writing is important, but so is having something to write about.  A story about a guy who stares at his QWERTY keyboard for eight hours a day and limits his social interaction to the pizza delivery guy and his cat isn’t going attract that many readers.  So get out there and learn and do and see, so you have a base of experiences from which to write.

Hope this helps and inspires writers out there.  And I’ll leave you with this insider secret: never underestimate the power of switching fonts to WingDings when you’re up again writer’s block.  Inspiration at its finest!

This post originally appeared on the Lindsey Pollak Career Blog.

TAGS: Books, Gen Y Women, writing

Memorial Day was always the traditional “line in the sand” marker. Before it, it was inappropriate to wear white bags and shoes, after it, perfectly fine since summer had begun. Of course, those were the days when women wore hose to work when they wore skirts.

While these rules have been retired, what women wear to work can still cause lots of discussion. Consider the brouhaha that started at a judges’ symposium when the topic of what women wear to court came up ─ and continued across the Internet. The moral of the story is that what you wear is part of your brand image.

I’d like to add to the suggestions I made in an earlier post on this topic.

• You may simply want to dress in style, but be aware that short skirts and plunging necklines send a message. Consider whether that is the message you want to send.

• “Business casual” is not the same as “beach wear”. Beware fabrics that cling or show through too much.

• Accessories and cosmetics count too. Unless you work in the high fashion industry, stilettos don’t signal. “I’m serious about my career.” Nor does hot pink nail polish.

Women have more choices when it comes to deciding what to wear to work than men do. But choice can complicate matters as we try to walk the thin pink line. Mark Twain said, “Clothes make the man.”  It’s clear to me that clothes can unmake the woman.

All of us at The Thin Pink Line appreciate our men and women in uniform on Memorial Day – and every day.  Thank you.

TAGS: clothing

Knowing the score – my credit score that is – has always been important to me.  It was one of the silver linings I found many years ago in the dark cloud of post divorce in a community property state.  Having been a young married woman in the early 70s, my idea of good money habits was:  “What’s mine is his.  What’s his is mine.  And we and our money would live happily ever after.”

Boy did I get a reality wake up call.  When I initiated divorce proceedings nearly 18 years later – figuring out the mine and the his of our money – came down to attitude.  As the obvious breadwinner (a calculation reached by an angry female judge who was herself the product of a divorced family and still dealing with her own issues of abandonment) – I got nailed.  I was to be responsible for paying all the outstanding bills, providing all the education expenses for my children and writing the checks for any other family matters yet to be named or known.

I had two choices:  I could get mad or I could get even.  I chose the latter – and I don’t mean getting even by retaliation.  Even though my ex said he didn’t care about the bills or lines of credit in our name and would do nothing to pay them off – I did.  I cared very much.  In fact, I cared so much about what creditors would say about my name that I set my sites, goals and checkbook on paying off all the family debt.  Month by month.  Chunk by chunk.  And when that I was done, I regaled in the satisfaction of never having to see his name and mine together on any bill or document that represented my new life. 

It took a few years of deliberate, consistent, always on time payments.  But finally I was at a place where I understood the importance of and the need to know the score – my very own, just me, individual, earned it myself, pristine credit score.  There is big bold numbers was my answer:  793.   I love the number.  I guard the number.  I’ve kept it there even though I’ve had to handle my share of disappointments in this crazy money time called a recession.

The new (I)deal when it comes to credit worthiness isn’t about how much money you have, it’s about how you handle what you have.

As the recent victim of banking identity theft I was particularly pleased to receive tips for how to minimize the likelihood of it happening to you from Thin Pink Line reader Marilyn Ziemann.  In my case it could have been much worse.  Wells Fargo caught it almost immediately and I wasn’t out any money, but I was out quite a bit of time and aggravation. 

The way I think it happened is that I logged in to pay a few bills from an unsecured computer.  I only intended to be a few minutes but my phone rang and I didn’t log out.  My account was open for any “phishers” to see for nearly an hour.  It was soon after that the fraud was detected.  My bad for using the unsecured computer for even a few minutes. 

There are two types of identify theft: account takeover fraud (which is what happened to me) and application fraud (when someone gets hold of your SSN to open credit in your name).  Although it’s almost impossible to protect yourself with 100% certainty from either type of identity theft, here are some suggestions Marilyn provides that you shouldact on immediately if you haven’t already: 

1.  Check yourself out.  Review your credit periodicially to make certain there are no fraudulent transactions of which you are not aware.  To get your free annual credit report go to www.annualcreditreport.com  or call 877.322.8228.

2.  Secure your SSN.  Do not carry your social security card or anything else with your SSN with you unless you need it.  Most healthcare companies have changed the benefit card to exclude a SSN but make sure you’re not carrying an old one with the number on it.   If your state uses your SSN as your driver’s license number, request an alternative number.  Never give out your SSN over the phone.

3.  Don’t leave home with it.  Do not carry your entire checkbook and all of your credit cards with you each time you leave the house.  Instead, if you think you’re going to need a check, bring  just one.  The same with credit cards and debit cards.  Similarly, keep a listing of all of your credit card numbers and the phone numbers to the banks that represent them in a secure place at home.  This way if your purse or wallet is stolen you can quickly contact the banks. 

4.  Keep your receipts.  When you make a purchase with your credit card or debit card keep the receipt in your wallet, not in the bag.  This way, if you leave the bag somewhere and it’s picked up by a thief they will have no record of your transaction.  Save your receipts so you can check them against your monthly bill. 

5.  When you toss it, shred it.  This includes anything with personal information from bills to offers for credit cards.  I live in a fairly good neighborhood but local police have warned us that thieves are going through the trash at night looking for anything with the information needed to steal your identity.  Investing in a shredder now can save you money down the road. 

It’s unfortunate that we have to take so many precautions against people who are determined to steal what we’ve worked so hard for, but it’s a reality.  Be vigilant about protecting your assets.

TAGS: Bank Theft, free credit report, Identity theft, Wells Fargo

Thank you to Youth Radio for interviewing me recently on the topic of “What next?! Finding a job after graduation.” Here is an excerpt of the interview:

Q: So I’ll be graduating college next semester. What do you recommend I should be doing now to prepare for the job market?

A: I think you want to get as much real experience as you can. Whether it’s internships, part time jobs–anything where you can have accomplishments, real world experience and are meeting as many people as you can. I don’t mean networking in a cheesy way, like using them. I just mean meeting other people and offering to help them, and someday they might offer to help you. Also use your college’s career services office. So many college students I know don’t take advantage of that. They can help you make sure your resume is excellent.

Q: What’s the biggest mistake that grads make when they’re job hunting?

A: The biggest mistake is doing nothing, becoming paralyzed by the bad economy. The reality is you have to get out there and do stuff, even if you don’t get your dream job right away. Take a retail job, temp, volunteer, do something just to get out there. Don’t stay at home playing video games. It sounds obvious, but a lot of people think it’s better not to take a mediocre job or temp — but it’s better to be out there. If you’re a barista at Starbucks, then be the best barista at Starbucks. That’s better than sitting at home waiting for the perfect job. A lot of people disagree with that mentality, but I feel pretty strongly about it.

Read the full interview on the Youth Radio website…

TAGS: Job Search, Youth Radio

If you aim low, low is what you get. A recent survey of college graduates conducted by the National Association of College Employers revealed:

• When asked what they expect to earn in their first job, women expected to earn $10,000 less than men did.
• Women actually earned $40,000 on average, $7,500 more than they anticipated.
• Men earned $50,000 on average.

While some of the gender differences in both salary expectations and salaries earned can be explained by the fact that women tend to enter lower paying industries such as education and government where as men tend to end up in higher paying sectors such as engineering and consulting, there is still a gap in every industry.

Perhaps most interesting is that in healthcare, an industry dominated by women, the salary gap was the widest ─ over 30%.

Over a working lifetime, the gender gap in pay is estimated to cost a college educated woman over $1,000,000. That’s a lot of money. Not only does it affect your ability to support yourself and your family while you are working, but it also impacts the amount of money you will be able to save for retirement as well as donate to causes you believe in.

How can you best prepare to get what you deserve?

1. Do your homework
   Determine what the salary range is for the job you want in your geographic area and industry. There is a wealth of information available on the internet (for example, see jobsearchintelligence.com) but don’t stop there. Ask people in the industry what you should expect in terms of compensation. Be realistic yet optimistic, assessing your education and experience carefully so that you are able to explain where you fit in the salary range band and why that is the case.
   
   
2. Know what your alternatives are
   In order to negotiate effectively, you must know what alternatives you have ─ what will you do if you are unable to get a reasonable offer from this prospective employer? Do you have other offers or good prospects that may soon develop into offers? If so, you have leverage in the negotiation. If not, what can you do to improve your situation? When the other party senses that you have no alternative but to take what is offered, he or she will be tempted to give as little as possible and you will be anxious to take it. Don’t put all your eggs into one basket; as you move through the interviewing process with a company, continue to explore other possible opportunities.
3. Practice, practice, practice
   Enlist a friend you trust to play the role of the interviewer and practice. Experiment with various approaches ─ what will you say if the interviewer asks you what your salary requirements are? How will you respond if the interviewer throws out a number that is below market? Practice is precious because although it is helpful to have thought about how the conversation will go and how you will respond but it is entirely different to get the words out of your mouth in a way that is comfortable for you. You won’t be able to anticipate and practice the entire negotiation but you’ll be surprised at how much you can foresee.

Don’t be reluctant to advocate for yourself appropriately and respectfully. While you may want the job, if you are underpaid, you probably won’t be very happy.

TAGS: benchmarking salary, negotiating pay, salary, salary sites

It was Shakespeare who so eloquently suggested:  “Neither a borrower nor a lender be.”  I think he was talking about preservation – of one’s money and one’s friendships/relationships.  

Though I’ve some very specific caveats about loaning money to family and friends – if you choose to borrow from or lend money to friends or relatives – you can do it successfully if you have the right attitude.

The first step is to make a plan.  The next step is to be professional about it.  The final step is to put it in writing.  Some financial specialists even suggest using the services of an impartial third party to facilitate the loan.  Yes, you’ll have to pay for the services of a go-between but it’s definitely money well spent. 

Does the plan I’ve just suggested sound too much like you’re loaning to a stranger for a business rather than “helping out” your adult child, sibling or other family member?  Guess what?  That’s the idea.  Otherwise loans motivated by and made in good faith can get very complicated and very uncomfortable.

According to Denver-based financial services specialist Nathan Hooks, billions of dollars in loans between friends and relatives are made every year.  He says:

• the terms are often vague
• the options if the borrower encounters financial problems – aren’t spelled out
• and after the loan is made – you and the borrower may feel awkward about the lack of a real repayment plan. 

Hooks goes on to say that the reality of loaning to friends and family requires details such as:

• when will the loan be repaid
• what will the repayment schedule be
• and how to avoid any potential problems with the Internal Revenue Service  

I’m convinced that the real bottom line about lending to family or friends is – do it right.  When it’s done right – meaning with the rules of engagement and repayment in place – loans between family and friends can benefit both the lender (getting a competitive return on her or his money) and the borrower (getting a good, friendly interest rate).  That way both the borrower and lender can profit. 

Here’s to your health and wealth. 

Nathan Hooks, a Denver, Colorado financial services professional can be reached at nhooks@ft.newyorklife.com or  303-871-7252 .

TAGS: Borrowing money, Internal Revenue Service, loaning money to family members, loans, repayment

People often ask me how I managed to build a coaching firm, write books, conduct keynote presentations and have a life.  The answer is simple: vision.  I know first-hand the power of vision.  Long before it was trendy or had a name, I intuitively knew if I could focus clearly on the outcomes I wanted then the path toward achieving them would be revealed.  It’s not mystical or magical — it takes dedicated effort.

If you’re struggling with getting what you most want out of life (and that includes career, relationships, money, etc.), here are a few tips to put you on your unique path:

• Clear the pathway.  This means let go of negative thoughts, toxic people, and activities that are currently getting in your way.  They create both mental and physical blocks for the energy you want in your life to find its way to you. 
• Develop a laser-focus on desired outcomes.    It’s not enough to say you want a new job or an intimate relationship.  Those are much too broad.  Be as specific as possible, painting a clear picture of what you envision once you’ve achieved your goal or desire.  For example, “By the end of this year I will have a job that allows me to use my technical and creative capabilities, in an environment that encourages and rewards independent action, with a boss who not only supports but also coaches and mentors me, that is no more than a thirty minute commute from home, and that pays 20% more than I’m currently earning.” 
• Factor in your values.  I’ve watched people achieve the precise vision toward which they aimed only to realize it wasn’t satisfying and be disappointed.  Most often this is because they neglected to consider their values.  Identify your 3 – 5 most cherished values and be certain to factor these into your vision.
• Develop your game plan.  A plan without a vision maintains status quo.  A vision without a plan is only a dream.  What do you have to do starting now? Who do you have to meet with?  How much money do you have to save? Where do you need to live? What do you need to research or study?  Your plan may change with the circumstances, but it must guide you toward your vision.

There’s a Goethe poem that I’ve referred to countless times throughout my life that has served me well.  I encourage you to read The Power of Commitment and print it out to serve as a reminder that “the moment one definitely commits oneself then providence moves too.”

TAGS: planning for the future, strategic thinking, strategy, Vision