Students are certainly tech savvy these days.  They tweet and text and surf with great confidence, secure in their know-how about the joys of connectivity.  But how secure is their knowledge about being safely connected when it comes to online money management? 

For example, what would your student do if they received an email from their bank asking them to update their account information?  Would they confidently click on the attached link and update their records?  Wrong decision!  They would be giving identify thieves direct access to their money.  But if they’d played a new, interactive financial literacy board game called Wi$eMoney – they would know that banks don’t ask customers for account information via e-mail. 

Wi$eMoney teaches students about banking, credit, investing, budgeting and identify theft.  It was created by The Learning Key, a company that creates games to transform learning into action (www.thelearningkey.com) .  It has been tested with students and teachers in nearly two dozen states and complies with school board approved curricula. 

The information that’s shared while playing Wi$eMoney is priceless. And, it’s desperately needed because U.S. students are graduating without basic financial education.  They’re graduating without the ability to manage their money.  In fact, in a recent survey of educators across the country who belong to the Business Professionals of America teachers said:

• only a third of students who graduate from high school are financially literate
• 93% need education on how to manage a budget 

But the other disturbing fact that was identified in the survey is that more than half of the teachers (51%) said they are only somewhat qualified to even teach students in financial matters. 

That’s why parents and teachers must find ways to make learning about money fundamental and help students understand the importance of the mindset:  It’s your money so take it personally ™.

How better to do that than with a game that makes become financially smart fun and mental?

Here’s to your health and wealth. 

TAGS: Generation Y, Women and Money

 Is your child money smart when they graduate from high school? 

Being financially literate is not the grade most teachers give the nation’s high school students.  More than half say today’s kids have not been adequately educated about money matters by the time they receive their high school diploma. 

According to a recent survey of teachers nationwide who are members of Business Professionals of America, 51% said students are either somewhat or very illiterate when it comes to money matters regarding managing a budget, saving and investing money, credit cards and paying bills.  Only 2% of these educators felt that graduating seniors were very well-versed in financial matters. 

The survey was done for an interactive financial literacy board game called Wi$eMoney – a product of the Learning Key – a company that designs learning tools (http://www.thelearningkey.com/index.php).  I provided content for this board game and focused on challenging juniors and seniors to test their money skills and knowledge.  Wi$eMoney helps them understand early on why It’s your money so take it personally ™ should be their mindset. Wi$eMoney’s goal is to stimulate student awareness of their financial responsibilities and make the process fun! 

Many of the nation’s teachers – in fact, one in five of those asked –  who felt that students are very financially illiterate – don’t think their schools are doing enough to prepare students for the real world of money – how to make it, spend it, save it and invest it. 

Elizabeth Treher is founder, president and CEO of The Learning Key.  She says:  “Teachers, in general, are concerned that students are not aware of the financial responsibilities they will encounter when they become independent of their parents.”  Treher adds:  “Many educators feel that basic financial education should be introduced to students as soon as they enter high school and become involved until they graduate”. 

Financial education like reading should be fundamental as well as fun and mental.  What better way to engage students in learning to become money savvy than to make a game of it?   

Here’s to your health and wealth. 

If you’re interested in learning more about the Wi$eMoney board game and/or sponsoring financial education in your local school district, go to http://www.thelearningkey.com/PDF/Sponsorship_Promo_06092010.pdf.

TAGS: Generation Y, Women and Money

Who should be the successor of a family owned business when the founders are no longer available, willing or capable of continuing to run it?  That’s definitely a mind over money matters choice. 

My friend and colleague Dawn Fotopulos, a much sought after small business advocate and coach is the Founder of Best Small Biz Help.com, The Solopreneur’s Lifeline(http://bestsmallbizhelp.com/meet-dawn-fotopulos/).  She says usually one or two people are in charge of the business and have been the ultimate decision makers and they must be willing to delegate authority before they’re ready to sell or turn the business over to be run by someone else.  Why?  Fotopulos says because such a transition requires a three year on-ramp/off-ramp time frame to do it successfully and suggests the following: 

• Think about succession at least three years before you want to transition
• Delegate authority and not just tasks to your key proven people
• Seriously consider non-family members as viable leaders of the business 

If you’re the founder of a family business, are facing this decision and considering appointing two people to run the company and use an accountant as a referee – Fotopulos says you might want to reconsider.  She is a firm believer that you can never have a 50/50 split in ownership. 

“It’s a recipe for disaster,” she says.  “Designating more than one owner in a succession plan doesn’t work.  Someone must ultimately be in charge.  That person needs to understand the mission of the business.  Although a business should be able to run independent of the founder,” she goes on to explain, “it only can when the owner delegates authority regarding decision making and not just delegate tasks.”

A succession plan takes time.  So does identifying the right person.  Mentoring a successor requires good, time consuming, on-the-job training, nurturing and giving adequate lead time for a smooth transition.  Most family business founders haven’t done that or identified their successor because they’re structured the business around themselves.  Even if the owner/leader has identified the person to succeed them, often they can’t let go or they don’t think far enough ahead to implement change and find that it’s a crisis that forces putting a succession plan into play.

Lost time is lost money.  Forward thinking about the transition of power is a bottom line issue.  Mind over money really matters when it comes to this decision.  It should be made from the mind of a good business owner rather than the heart of a hopeful parent/founder.

Fotopulos says the successor boss must be responsible for the business viability year in and year out.  The entrepreneurial generation (founders) made the sacrifices but need to be sure that when the second generation (adult children) takes over, their willingness or motivation often isn’t the same.  Thus the s suggestion to consider a longtime, loyal employee – a person who is considered your critical second in command – to become your successor.

When choosing the person to succeed you in your successfully run and profitable family business, as you consider who best can do that, remember:  It’s your money so take it personally (TM).  It applies here more than ever before.

Here’s to your health and wealth.

TAGS: Communication Skills, entrepeneurs, financial planning, Women and Money

It’s a fact:  family owned businesses are a huge part of our country’s economy. 

It’s a fact:  family owned businesses usually come with built-in problems. 

It’s a fact:  experts say family owned businesses (generally) fail not because of economic issues but because family life and workplace life can create turmoil. 

Family owned businesses account for 60% of the nation’s employment, 78% of all new jobs and 50% of the country’s gross domestic product.  But a lot can go wrong in a family owned business so it’s important that we all understand these businesses’ unique struggles and support them because only about a third survives into the second generation. 

Family business success depends on forward-thinking and planning. The problem with family owned business succession plans is that the well-intended founder – the parent who made all the sacrifices – remembers the lean years while in most cases, the adult child, would-be successor doesn’t.  Instead, the child only recalls seeing over and over that Mom or Dad (or both) took risks, worked the hours, made the sacrifices and got the business to break even and have free cash flow. That’s why many 20-30 year family businesses – viable when the parents hand it over (usually to the son) – are run into the ground in two years. 

As my long time friend and colleague Dawn Fotopulos, a small business advocate explains:  “The bottom line is – it’s so hard to get a business profitable but takes just an ‘eye blink’ to destroy it and decades of hard work.” 

Fotopulos’ business is to improve the viability of small business in the United States. (http://www.smallbusinesshow2.com/dawn-fotopulos.html) She’s committed.  She knows what she’s talking about and definitely knows what she’s doing when it comes to educating small business owners for success. 

“The disconnect,” says Dawn, “is that the parents who made all of the sacrifices understand there are going to be lean years and tend to be conservative about how they spend their money.  They loathe spending money but want to give their kids everything they didn’t have.  They spoil the kids and the kids are of the mindset that the business gave them a nice life and is always going to be there.” 

There’s such truth in Dawn’s assessment.  When it comes to family owned businesses, the second generation isn’t of the frame of mind to save for a rainy day.  “When they take over the business”, Dawn says, “the mindset is often first that they must have the biggest and the best of everything – equipment, furniture, expensive environment – that the business may or may not need!”  She says too often she sees them start to run the cash position into the ground. “So if they lose a client or end up in a tough economic environment,” Dawn told me, “they can’t stand economic shocks.” 

It’s your money so take it personally ™ absolutely applies here.  In the case of a family owned business that’s failing, Dawn says part of the dilemma is pride.  Many in this generation wake up and say, “I deserve to have the best” and put themselves first instead of the business. “The family business must be viewed and treated like the third entity it is,” Dawn explains.  “The one that provides for them and their family and those they employ.” 

Next week:  Who should be the successor in a family owned business when the founders are no longer available, willing or capable of continuing to run it?   That’s definitely a mind over money matters choice. 

Here’s to your health and wealth.

TAGS: family businesses, family money, succession plans, Women and Money, work life balance

 A text message to me from a 40-year old female physician declared:  “See text below.  (The text she referred to read:  “Need $100 to cover me until the end of the month.  If you can’t do that, at least send enough for your nephew to get his hair cut for graduation this weekend.  Thanks.” )  Yet another demand from my sister that I give her money!  I can’t keep dealing with this.  It’s not right but I don’t know how to extricate myself.  Help!  Laura.” 

I followed up and spoke to Laura by phone.  She vented for about 10 minutes.  She told me that she regularly gave her sister money to buy food for herself and her two children; that she paid her mother’s car note and insurance premium; that she “had to come up with an immediate $600 last month” to cover the nursing home costs for her grandmother that were in arrears because her grandfather hadn’t kept up with payments which should have come from disability checks but used the money instead “for other things”.  Laura then returned to details about her sister and said while her sister makes $50,000 a year she is $40,000 in debt!  “What really upsets me,” Laura said angrily, “is that I feel guilty not giving her money when she asks for it!” 

Laura is a successful woman, a well-respected doctor, single and without children.  She asked that I help her get a mind over money matters mentality because her family just expected her to always cover expenses/needs/wants that they couldn’t.  “I’ve done well,” she told me again.  “I make a lot of money and I save it so that I can take care of myself.  My family reminds me of that each time there’s a money need in their lives that they want me to fill.  They’re not malicious about it – just unrelenting.  I can’t deal with this anymore!” 

The reality is Laura cannot afford to rescue everyone she loves.  The first suggestion I made is that she get clear about whether she was feeling guilt or obligation.  It was clearly the latter.  Because Laura is successful and her sister (by her own declaration) isn’t – Laura feels obligated to hand over money whenever her sister or other family member puts their hand out. 

Based on her sense of obligation which at least for now she feels she must fulfill, I made some basic, straightforward suggestions.  First and foremost, Laura should determine how much money a month she is going to budget/set aside for her family.  Determining the amount of this line item will help her feel more in control of the randomness with which she’s asked to provide money.  Have a serious conversation with her sister and insist on being given an accounting of anticipated monthly expenses and perhaps consider arranging direct payments for certain recurring bills for her sister (within the budget amount set aside for family) as well as for her grandmother’s nursing home care. 

The reality for Laura and others like her is that unless she establishes protocols and most importantly limits for family money requests – she will continue to be in the guilt game and paying the price.   I, of course, told her:  “Laura, It’s your money so take it personally ™.“   Laura says she understands the first step towards achieving this – begins with her.  Instead of getting angry about expected handouts she needs to get a plan and pay herself the compliment of being willing to help when she chooses without being made to feel guilty.  And her actions will underscore the importance of every member of the family who asks for her financial assistance – being expected to get educated about money skills and management as part of her requirements.   

Here’s to your health and wealth.

TAGS: financial planning, Women and Money

If you look to the left you’ll notice that our line-up has changed.  We’re thrilled that Emmy award winning journalist and former CNN business anchor, Valerie Coleman Morris, has joined the blogging team of The Thin Pink Line.  Valerie is dedicated to increasing financial literacy among women, people of color, and children.  She welcomes questions so be sure to ask yours in the comments section of her blogs, which begin next week.

TAGS: CNN, financial literacy, Valerie Coleman Morris, Women and Money

Fridays are usually reserved for financial tips, but today I want to share a different kind of money tip.  For many years when I was struggling financially people told me stories of how when they gave generously to organizations of their choice the money always came back to them multi-fold.  As soon as I had money to spare I began to identify causes that were important to me and made sure I gave as much as I could afford – sometimes even more than I could afford.  If it doesn’t hurt a little I don’t think I’m giving enough. And you know what?  From that time forward money has never been an issue for me. 

What made me think about this today was a meeting with a woman who sits on the board of MOSTE, an organization I founded 22 years ago and where I still volunteer time and each year donate money for scholarships.  I was the first to suggest giving scholarships to inner city girls who might not otherwise be able to attend college and said I would fund the first scholarship.  I don’t know exactly how or why it works, but each time I donate I’m surprised with a new contract or source of income I hadn’t expected.  I don’t give because I expect to get anything back, it just happens. 

Carol and I are board members on the Bloom Again Foundation and when I was going through the most recent donations someone had attached a “matching gift” form.  The woman’s donation would be matched by her employer.  Perhaps your company has a similar program.  If so, I’d like to ask you to consider donating to Bloom Again this holiday season and sending us a matching gifts form.  You can visit the website to learn more about how we empower women by providing financial assistance during times of difficult transition. 

If you’d like, we’ll give you holiday cards you can send to friends letting them know you made a donation to honor your relationship with them.  For each $10 donation we’ll send you one card that has a place to put your name as a donor.  As I told my friends and family, none of us needs one more “thing” but women in financial need could use our help, so I’m donating all the money I would normally spend on holiday gifts for everyone except the children in my life to Bloom Again.  Try it and see what happens.  If nothing else, you’ll know you made a difference.  100% of the proceeds from donations go toward grants to those in need.

TAGS: Women and Money, Women and Philanthropy

Now here’s a deal for you.  My book, Nice Girls Don’t Get Rich, was just released in paperback  so the publisher is looking to sell the hardcover (same content) at a deep discount.  The cover price is $21.95 but I’m passing my discount along to readers of The Thin Pink Line.  Your cost would be just $7.50 per book including shipping (in the United States). 

Now’s the time to brush up on your MQ (money quotient) and maybe even get some holiday gifts.  I’ll sign each book purchased so you’ll want to let me know if you’re buying the book for yourself or someone else.  Just send an e-mail to info@drloisfrankel.com and we’ll contact you with ordering information.  Quantities are limited so, as they say, act now.

TAGS: Get Rich, Money, nice girls don't get rich, Women and Money

College students are usually (and understandably) more concerned about debt than about investing, but every once in awhile we hear from one who wants to get a head start. And we cheer.

That’s because investments made when you’re young–in your teens, 20s and 30s–have decades to grow and compound (that’s when your returns earn returns). There’s nothing like time to transfer even small sums into sizeable fortunes.

Simply put, starting to invest while you’re young is one of the easiest ways to get rich.

For example: Leah, a college sophomore, recently wrote to ask advice on how to invest. She has $5,000 saved up.

If she invested that $5,000 mostly in stocks or stock mutual funds, chances are excellent that she could earn an average annual return of 8% or better over the coming decades. That means her $5,000 nest egg would be worth more than $100,000 by the time she retired.

Where to put the money? The answer: somewhere cheap. No investor wants to pay unnecessary fees and expenses, but the damage multiplies the longer your money is invested. If Leah chose investments with expenses that trimmed just 1% of her returns each year, that $5,000 would grow to $71,000–or about 30% less.

So: look for low-cost investments like index mutual funds. And to make your financial life even easier, consider a target date maturity fund such as Vanguard Retirement 2050 or T. Rowe Price Retirement 2050.

Target date funds do all the heavy lifting for you. Not only do they pick the investments and the asset allocation (how your money is divided among stocks, bonds and cash), but they gradually adjust the portfolios’ investment risk as you age. (The numbers refer to the year or decade in which you plan to retire…Leah’s got about 40 years in the workforce ahead of her, so 2050 would be around the time she will probably quit work. If she were 10 years older, she might pick a 2040 fund).

Just about every mutual fund company and brokerage offers target date maturity funds. So do most 401(k)s. They’re a great way to get started with investing and to simplify your finances.

Here’s to a rich life, Leah!

TAGS: Investing, retirement, target date maturity funds, Women and Money, young investors

I used to teach with Betty Friedan and this week I was reading through her autobiography, Life So Far. It reminded me of all women have gone through to get the right to vote and to achieve fairness in hiring and paying of women for the same work men do. We’re not there yet by a long stretch. And that seems odd. Women my age and younger, especially younger, often think that those women did what had to be done and now it’s just a matter of maintenance. If you really look though at things like the recent Supreme Court decision in the Ledbetter case determining that pay discrimination must be noticed within the first 180 days after its occurrence, you see how easily progress can slip away.

All the more reason to be aware very early on about matters of pay and merit raise increases. Sometimes that means doing research — asking people who work with you who would know pay and raise ranges. There are laws on the books to protect women from discriminatory practices, but being aware of what is going on around you all along, from before being hired, until you leave is what really can provide protection. And then there is no need to resort to legal remedies.

This is, however, where many women feel uncomfortable. They don’t want to be seen as making trouble. Well, there’s trouble and there’s trouble. One way or the other and some time or another, there usually is trouble at work so it’s best to nip what you can in the bud. Reading the tea leaves is how I refer to this talent in “The Secret Handshake.” It’s an acquired skill. But no time like the present to start practicing!

TAGS: Pay Disparity, Political skills, Women and Money