"Money is not the most important thing in the world. Love is. Fortunately, I love money." -anonymous
Cold hard cash... some say It's the root of all evil, others the pathway to happiness.
However you look at it, one thing's for sure, life gets pretty stressful when there isn't enough of it. As individuals, we spend a huge amount of time and energy in acquiring, storing, spending and trying to stretch out the all mighty dollar.
As parents, we come under a lot of pressure and expectation from our kids when it comes to providing the never ending list of things they want. Finances are right up there as one of the major causes of familial bickering.
My brother-in-law is what you might call a financial wizard, the Mozart of the nickel and dime set. He makes his living trying to teach the economically impaired how to manage their assets. Not an easy job, I can assure you. Take the couple from Reno, who couldn't understand why their two income family kept running into the red each month.
"We spend 30% of our income on the mortgage," began the wife, "and probably 25% on food. I'd say 30% goes to utilities and another 20% for medical expenses."
The husband nodded in agreement, "Plus there's the15% for the car, 15% for babysitting and daycare, 10% for internet service and satellite TV and another 25% for clothing, gym membership and other incidentals."
It didn't take a genius to see that this couple was spending over 150% of their income. No wonder they were having problems.
The term creative financing can be used to describe more than nontraditional mortgage loans. Everyday people like you and me who are trying to make a small paycheck stretch to cover a whole month of bills, have come up with some amazingly inventive strategies to accomplish that feat.
Two sisters, both single moms, shared an apartment and their family expenses; however they made a point of opening separate checking accounts at different banks. These two knew the banking cycles as well as any full time banker. They could tell you to the day, how long it took for a check to clear from each of the local grocery stores. And when things got really tight, they could pass checks back and forth between accounts for days to cover the same $50 that they wouldn't get until the 15th.
Silly as their methods sound, the idea behind it caught on quickly and a whole industry has been built up on that very concept of temporary money. Check advancing business's help people bridge the days between when their bills are due and when their paychecks arrive, for a fee.
Again, it doesn't take a math wiz to see how quickly one can dig themselves into a hole using these types of services each month. But not all their customers get the concept of payday type loans.
One young man became quite irate when a clerk informed him that he couldn't get a short term loan on his pay check due to the fact that he didn't actually have a job. "But eventually I will," the guy insisted, "And when I do I promise I'll pay you back!"
We laugh when young children believe that money is made in ATM machines and that all one needs is the right card to access cash whenever the need arises. But it's sad when adults use the same idea to manage their own checking accounts.
One elderly woman, who really should have known better, never balanced her check book. She handled her banking with the theory that if the money was in the account, than it was available. She would write checks, use debit cards and pull out cash, all on the same one hundred and fifty bucks, and then become angry and resentful when checks bounced and her account became over drawn.
There are a lot of reasons people choose such foolish and sometimes dangerous methods of managing their assets. Sometimes they don't make enough money to meet their needs (or perceived needs), sometimes they're just lazy, and sometimes it's lack of education.
Parents can do a lot to help keep their children from falling into questionable money managing habits. And it's never too early to start.
Last summer, my six year old daughter and her friend wanted to set up a lemon-aid stand one warm afternoon. They had visions of filling their pockets with the quarters they would get as neighbors flocked to their stand in droves.
Lemon-aid stands are as traditional with kids as Christmas and Easter Egg hunts, and I decided to use this opportunity to teach the girls an important money management lesson.
"What will you need for your lemon-aid stand?" I asked.
The girls came up with the obvious answers; lemon-aid, ice and cups.
"Good, and where will you get them."
"From you," said my daughter with a cute toothless grin.
"So if I'm providing the drink, what do I get out of it?"
That set both girls into deep thought. "A thank you?" suggested the other child.
"That would be nice, but I think I may need more. How about if we split the money you make between the three of us? I provide the materials and you girls do the work."
This idea was met with a certain degree of hesitancy, but eventually we agreed. By the end of the day each of us had an extra dollar in our pockets, and the girls had learned an important lesson in business management.
The future of this country's financial system is walking around our kitchen in tutus or capes. If we don't prepare them to manage that economy, who will?
Cold hard cash... some say It's the root of all evil, others the pathway to happiness.
However you look at it, one thing's for sure, life gets pretty stressful when there isn't enough of it. As individuals, we spend a huge amount of time and energy in acquiring, storing, spending and trying to stretch out the all mighty dollar.
As parents, we come under a lot of pressure and expectation from our kids when it comes to providing the never ending list of things they want. Finances are right up there as one of the major causes of familial bickering.
My brother-in-law is what you might call a financial wizard, the Mozart of the nickel and dime set. He makes his living trying to teach the economically impaired how to manage their assets. Not an easy job, I can assure you. Take the couple from Reno, who couldn't understand why their two income family kept running into the red each month.
"We spend 30% of our income on the mortgage," began the wife, "and probably 25% on food. I'd say 30% goes to utilities and another 20% for medical expenses."
The husband nodded in agreement, "Plus there's the15% for the car, 15% for babysitting and daycare, 10% for internet service and satellite TV and another 25% for clothing, gym membership and other incidentals."
It didn't take a genius to see that this couple was spending over 150% of their income. No wonder they were having problems.
The term creative financing can be used to describe more than nontraditional mortgage loans. Everyday people like you and me who are trying to make a small paycheck stretch to cover a whole month of bills, have come up with some amazingly inventive strategies to accomplish that feat.
Two sisters, both single moms, shared an apartment and their family expenses; however they made a point of opening separate checking accounts at different banks. These two knew the banking cycles as well as any full time banker. They could tell you to the day, how long it took for a check to clear from each of the local grocery stores. And when things got really tight, they could pass checks back and forth between accounts for days to cover the same $50 that they wouldn't get until the 15th.
Silly as their methods sound, the idea behind it caught on quickly and a whole industry has been built up on that very concept of temporary money. Check advancing business's help people bridge the days between when their bills are due and when their paychecks arrive, for a fee.
Again, it doesn't take a math wiz to see how quickly one can dig themselves into a hole using these types of services each month. But not all their customers get the concept of payday type loans.
One young man became quite irate when a clerk informed him that he couldn't get a short term loan on his pay check due to the fact that he didn't actually have a job. "But eventually I will," the guy insisted, "And when I do I promise I'll pay you back!"
We laugh when young children believe that money is made in ATM machines and that all one needs is the right card to access cash whenever the need arises. But it's sad when adults use the same idea to manage their own checking accounts.
One elderly woman, who really should have known better, never balanced her check book. She handled her banking with the theory that if the money was in the account, than it was available. She would write checks, use debit cards and pull out cash, all on the same one hundred and fifty bucks, and then become angry and resentful when checks bounced and her account became over drawn.
There are a lot of reasons people choose such foolish and sometimes dangerous methods of managing their assets. Sometimes they don't make enough money to meet their needs (or perceived needs), sometimes they're just lazy, and sometimes it's lack of education.
Parents can do a lot to help keep their children from falling into questionable money managing habits. And it's never too early to start.
Last summer, my six year old daughter and her friend wanted to set up a lemon-aid stand one warm afternoon. They had visions of filling their pockets with the quarters they would get as neighbors flocked to their stand in droves.
Lemon-aid stands are as traditional with kids as Christmas and Easter Egg hunts, and I decided to use this opportunity to teach the girls an important money management lesson.
"What will you need for your lemon-aid stand?" I asked.
The girls came up with the obvious answers; lemon-aid, ice and cups.
"Good, and where will you get them."
"From you," said my daughter with a cute toothless grin.
"So if I'm providing the drink, what do I get out of it?"
That set both girls into deep thought. "A thank you?" suggested the other child.
"That would be nice, but I think I may need more. How about if we split the money you make between the three of us? I provide the materials and you girls do the work."
This idea was met with a certain degree of hesitancy, but eventually we agreed. By the end of the day each of us had an extra dollar in our pockets, and the girls had learned an important lesson in business management.
The future of this country's financial system is walking around our kitchen in tutus or capes. If we don't prepare them to manage that economy, who will?
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