Archive for March 2014

By Peter Andrew

Short of bequeathing them so much money ($150 million each should do it) that they never have to worry about their finances, there are few gifts you can give your kids that could be more valuable than the skills and attitudes they need to be great money managers.

By the time they reach their mid-teens, you can pretty much see how their financial lives are going to pan out: Mary and Bob are forever borrowing against next week's allowance, while Tom and Jennifer have a thriving schoolyard loansharking business and robust balances in their savings accounts.

Often you don't have to wait for kids to hit puberty before you begin to spot the signs of competent or catastrophic attitudes to cash. One day you're changing their diaper, and the next, it feels, you're either lending them a couple of dollars or raiding their piggy banks. And, sometimes, siblings in the same family have very different money habits, even though they've all been brought up with the same financial norms, advice and education.

Genes, elephants and money

We're a long way from discovering the money gene, but last year Chase published an academic study that asked whether we all leave our mothers' wombs with our financial skills and attitudes pre-programmed. In "Born to Spend?," Professor Hersh Shefrin differentiated between two types of thought processes: "Fast thinking" tends to be instinctual, while "slow thinking" is more strategic.

By Holly Johnson

People would probably laugh if they saw my checking account balance toward the end of the month. There have been times when I've had as little as $20 in it, and all I could do was count the days until the 1^st of the month rolled back around.

However strange this may seem, rest assured that it's totally intentional. That's because I purposefully spend every dollar we come across in a monthly planning and savings scheme sometimes referred to as a "zero-sum" budget.

The purpose of a zero-sum budget is to "spend down" all of your monthly earnings until you completely run out of money each month. This accomplishes several things: First, using a zero-sum budget forces you to allocate all of your money to something, which cuts down on waste. Second, zero-sum budgeting requires that you pay money to savings and your investments as if they were bills, which helps you save more than you would have otherwise. And third, a zero-sum budget forces you to commit to spending thresholds in each category.

That all sounds great, right? If you're interested in creating a zero-sum budget of your own, the following steps can help.

Get a month ahead

One strategy for zero-sum budgeting is getting one month ahead of the game. To do this, I suggest using savings for your regular bills and spending while stashing away your monthly earnings at the same time. This strategy is especially advantageous for those with a fluctuating income since this month's bills will always be paid with last month's earnings.

By Justin Boyle

I had just turned 8 years old when my mother took me to our neighborhood bank branch to open my first savings account. I had $20 in birthday money from my aunts and uncles and was about to learn valuable lessons about putting money away for the future.

But to hear my mother tell it, the only thing at the bank I wanted lessons about was the coffee machine. I walked out of there remembering my first taste of French roast much more vividly than my first taste of financial propriety.

Now, don't get me wrong. The old-fashioned "open a normal savings account with a friendly banker" approach might work for some kids. If you want to take a more creative direction though -- or if your kids are also at risk of becoming writers, who care more about coffee than practically anything -- here are a few tricks you can try.

Piggy banks 2.0

Maybe it's time we admitted to ourselves that the piggy bank has its drawbacks as a learning tool. The process of making even medium-sized deposits can be a chore, and there's no real way to check your balance without breaking and entering -- not to mention that it's possibly the worst option on the market as far as savings account interest rates are concerned.

By Georgie Miller

I used to think that couponing was complicated. Buy the newspaper, sort the coupons, keep a binder, maintain a calendar of expiration dates. Extreme couponing may be fun for some people, but I found it frustrating.

Additionally, while there are amazing deals out there, they weren't necessarily for the items I wanted or needed. Fortunately, there are lots of couponing options these days. Here's my quick and easy process for saving money at the grocery store.

1. Pick a store

The first step is to pick a grocery store. Yes, different stores have different deals, so it's hard to get the best deal on everything in one place. However, it takes time (and gas money) to drive all over town, and for what? Ten cents off eggs? No thanks. I like to keep all my monthly spending on one credit card, and all my grocery shopping in the same store.