When to Break Up With Your Financial Advisor

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An important indicator of your overall financial wellness is how well you balance spending with saving and investing. You should always keep the end game (retirement) in view while simultaneously being able to enjoy life while saving for your children’s college education, if applicable. In order to coordinate all of the pieces of your financial puzzle most effectively, many people choose to work with a financial advisor.

Unlike many other professional partnerships you may form, your relationship with your financial advisor or financial planner can become more like a friendship. Because many people stay with the same financial planner for years, you can easily feel connected on more than a professional level. This feeling increases if you are also in the same circle of friends or live in the same town.

No matter how much you enjoy the company of your financial planner, if your needs simply aren’t being met, you have some decisions to make. You’ll either have to explain to your advisor exactly how he’s letting you down and what he can change to retain your business, or you can start looking around for someone new.

Reasons to consider leaving your financial planner:

  • Distrust – Being able to trust your financial advisor with your money is extremely important. If you’re asking questions and not getting answers that feel authentic, that’s a red flag.
  • Poor communication – While it’s true that financial planners are often very busy, if your phone calls and emails go unanswered for lengthy time periods, you’re paying for a service that’s sub-par.
  • Unclear expectations – The best financial advisors will lay out a plan when you first team up with them. The plan should include input from you regarding your specific goals for your assets and what you’d like to see happen. If your advisor never created an investment policy statement for you – it could signal that he’s skimping on his other duties as well.
  • No contract – As with any professional who provides you with a service that you will be paying for, your financial planner should present you with a clear contract at the beginning of your relationship that outlines his duties to you and what he needs from you as well. Without a contract, you have no way of knowing what to expect.
  • Distance – If you’ve been working with a financial advisor from afar and have recently decided to take a more active role in your finances, letting go may be your only option.
  • No fiduciary standard of care – In other words, if your advisor (or his firm) doesn’t put your interests ahead of their own, you have a very good reason for finding a new firm.
  • Fees – If you’re currently unhappy with your advisor’s fee structure and this is set by his firm, you may not be able to get the arrangement you’re looking for without finding someone new.
  • Additional services – Many people today are interested in working with a financial advisor who goes above and beyond making sound investments for them. Tax planning and basic budgeting advice are two services cited by clients who were unhappy with their current financial planning firm.

At Veitengruber Law, we pride ourselves on our vast network of professionals and we attend networking meetings every month to stay immersed in the financial, legal and real estate markets. We are more than happy to assist you in finding the NJ financial advisor that meets your needs. Give us a quick call [(732) 852-7295], or fill out the contact request form on our website. We’re always here to help!

Image credit: Nicolas Raymond

How the Business of Debt-Buying Affects Consumers

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Collectively, American consumers are currently over $12 TRILLION in debt. Out of that $12 trillion, more than $400 billion has been deemed ‘seriously delinquent.’ Outside of a library fine I once racked up because a book that fell into the crack of my couch, I get pretty panicked if someone tells me I’m seriously delinquent. Just the sound of the phrase rolls off the tongue in a negative way, doesn’t it?

As it should: debts don’t get earmarked as seriously delinquent until they are 90 days or more overdue. That may not seem like a long time in the grand scheme of life, but in the world of debt, three months of failing to make a payment is long enough for lenders to get good and fed up.

What is debt buying?

Because of the whopping trillions of dollars of consumer debt in this country, an entirely new industry has spontaneously developed, and it’s more than a little shady. Lenders don’t want to wait to get paid. Seriously delinquent debts are often sold by lenders to companies whose sole purpose is to buy debt for pennies on the dollar in order to make at least a tiny bit of money rather than none at all. This process is part of the dubious debt buying industry – where debt is bought and sold, bought and sold ad infinitum, potentially transferring hands a veritable profusion of times.

Astoundingly, debt buyers can collect on the full amount of an original debt, even though they will have paid a supremely small fraction of that amount when they purchased it from the lender.

What does this mean for indebted consumers?

The debt buying blitz in the United States is problematic for several reasons. Firstly, many original lenders don’t supply debt buyers with much information about the debts that are switching hands. Compounding this issue is the fact that debt buyers are often unscrupulous about whether or not the debts they purchase are even valid. That means that they may purchase debts with missing or incorrect data that can lead to them harassing you for money you don’t even owe.

Ruthless debt buyers and collectors typically don’t care whether they’ve got the right person on the phone or whether the debt has been discharged via bankruptcy. They don’t even check to see if the statute of limitations to collect on a debt has passed. They’ve got a list of names and contact information, and often times millions of dollars they can potentially pocket if they can convince enough people to fork over the money.

Fueled by a strong desire for money, when debt buyers set out on their mission to collect, they’ll frequently go to unimaginable lengths in order to get you to pay. Threats, lies, scare tactics, cursing, impersonation, degradation, and humiliation are just a few of the strategies employed by people in the debt-buying and debt-collecting industry.

If you’ve experienced any of the above and feel that 1) you don’t owe the debt in question; or 2) a debt collector has acted illegally – you have recourse. Veitengruber Law helps people like you every day, and we’ve grown quite adept at dealing with distressing debt collectors. Want to find out if we can help you? Call us now: (732) 852-7295. We will not overcharge you and we’ll consult with you for a full hour free of charge. Best of all – we’ll put an end to your debt problem once and for all.

Image credit: Pat Pilon

Frugal Friday: Memorial Day Party on a Budget

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If there’s one thing that all of us here at Veitengruber Law all have in common, it’s finding ways to save money. Often this comes in the form of us working to help a client: apply for a loan modification, get a fresh start with bankruptcy, negotiate outstanding debts and learn how to budget so that their financial future looks bright.

When it comes time for us to leave the office each evening, we then turn our attention to our personal lives, and part of that involves how to best keep our own finances in order. We are constantly on the lookout for money-saving life hacks, which we love sharing with our clients and blog readers.

As we approach the end of May, many people have started planning for Memorial Day parties. A day to remember and memorialize those who died while serving our country in the armed forces, Memorial Day has also become the unofficial start to summer. Although summer doesn’t technically begin for several weeks, the last weekend in May now sees a plethora of pool openings, family gatherings, cookouts and beach trips.

This year, if you’ve been nominated to throw a Memorial Day party at your house (voluntarily or not) – why not see just how frugal you can be while hosting an unforgettable party at the same time? Try implementing some of these party hacks to see just how little of your own cash you have to part with this year:

Avoid the “party store.” Buying pre-made party supplies and decor adds up fa$t. Making your own patriotic decorations and party favors is not only a great way to lower your party costs; it can be a lot of fun, too! Check out this site for some really cool money-saving patriotic decoration ideas.

Prepare your own food. It is undoubtedly a lot more convenient to fill up a shopping cart at the warehouse store with pre-packaged food – from burgers and buns to snacks and desserts. Just like the “party store,” however, you’ll pay a premium for that convenience. Instead of forking over hundreds of dollars at BJs or Sam’s Club, roll up your sleeves and get cooking.

In addition to putting your own culinary skills to good use, enlist the other party attendees to each bring a food item with them. This will enable you to focus only on the main dish(es) yourself, while your friends can bring sides, snacks and desserts. Consider making it into a challenge to see who can bring the tastiest goodies.

Make it a BYOB shindig. You may be thinking: “But I already asked them to bring a food dish. Now they have to bring their own drinks, too???” Well, sort of. As the host, you should have the basic bar necessities on hand (if you plan to serve alcoholic drinks). If you don’t already have them stocked, consider a visit to the liquor store for an affordable bottle of: vodka, gin, scotch and rum. Add in a few mixers and you’ll be able to stock your home bar for around 50 bucks.

Alternatively, you could come up with one signature drink for the party that fits in with a patriotic theme, and serve only that drink. For example, a drink called the firecracker settles into layers of red, white and blue. Let party-goers know that if they want to drink wine or beer, they can bring their favorite bottle(s) along. This alone will save you a significant amount of money.

BE the entertainment. The merriment of any good Memorial Day (or any summertime) cookout should center around good conversation with friends and loved ones. If you’re looking for something a little more organized – toss out some brain teasers or get several card games going. Alternatively, crank up the volume and turn your picnic into an instant dance party (talent not required).

One of the keys to living a life free from debt is to plan ahead for special events just like this. Waiting until the last minute will give you little choice but to swipe your credit card more times than you’ll want to admit in order to acquire the party supplies you need.

Proper planning, budgeting, and getting help when you need it (in this case, asking your friends to contribute food and drinks) will keep the cost of a party from getting out of hand. Aside from a slight headache from too many firecrackers or wine, you won’t have any regrets the morning after you throw a penny-pinching Patriotic party.

Image credit: JD Hancock

What is Credit Counseling? Is it Right for Me?

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All of the terms associated with getting out of debt can get so confusing that you may end up not even understanding which service(s) you could benefit from. That’s why we’re putting out a Back to Basics series, explaining many of the most common terms we use regularly. Look for a new Back to Basics post every week.

What is Credit Counseling?

Just as a marriage counselor sits down with a married couple in order to evaluate the state of their relationship, a credit counselor takes a good look at your finances. He will then work with you to design a plan of action that will see you paying off your debts faster, spending less money on non-essentials, and putting more money into savings.

Typically, you’ll be seeking credit counseling when you’ve found yourself deep in debt with no end in sight, but you can also seek this kind of help if you don’t have a lot of debt but want to save for retirement, pay for your child’s college education, refinance a loan, and more.

During your credit counseling sessions, you will essentially receive an education about how to improve your ‘Money IQ.’ This means that credit counseling is not just a temporary quick fix; you will learn how to maintain financial stability for good.

Who Provides Credit Counseling Services?

Firstly, you should know that there are many credit counseling services in business today who use unethical and often illegal methods to attempt to get you the results you want.

It is important to choose wisely when looking for help with your finances. If you have a lot of debt and need assistance negotiating with lenders, look for a certified and experienced NJ debt settlement law firm.

Many credit counseling services will claim to be able to help you settle your debts in addition to providing you with credit counseling assistance. The truth is that they usually don’t have the ability and necessary knowledge required to negotiate with lenders or to help you file for bankruptcy. All too often, debtors end up even deeper in debt after working with a so-called ‘credit counseling company!’

When you work with a certified debt negotiation attorney, you’ll be in good hands. Look for a New Jersey credit counseling law firm that also specializes in debt restructuring, bankruptcy, credit repair, asset protection and real estate matters (especially if your debt has pushed you into or toward foreclosure.)

How Much Does Credit Counseling Cost?

While you may be able to find a company that will quote you a remarkably low price for their services, remember the saying: “You get what you pay for.” Also – keep in mind that these companies are routinely engaging in fraudulent methods (scams) that have them promising results to customers that they simply cannot, and will never, deliver.

Rather than paying an uncertified company for credit counseling services that’ll get you nowhere fast, consider paying someone who really knows what they’re doing and get a huge return on your investment!

It can be a knee-jerk reaction to balk at the thought of hiring an attorney, but when you find the right certified New Jersey bankruptcy attorney, he will always have valuable experience in the areas of credit counseling and debt negotiation.

Will you have to pay an attorney to teach you how to get out of your unfortunate financial bind? You definitely will – but it will be more than worth it when your debts are either completely discharged (via bankruptcy), negotiated down to much lower amounts, or refinanced and restructured.

Do you think you could benefit from some high quality credit counseling? Would your life be less stressful if your finances weren’t constantly on your mind? If you want to learn more about our credit counseling program – call today and we’ll set up your free consultation. [(732) 852-7295]

We are happy to consult with you in our offices or over the phone, and we look forward to helping you.

Image credit: Coalition for ICC

Friday Five: Cures for Your Holiday Spending Hangover

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Today on the Veitengruber Law Blog, we bring you another Friday Five. Our topic this Friday is getting out from under all of the debt that you may have acquired during the recent holiday season. Let’s face it: every year we vow to spend less next year, but when “next year” rolls around, it’s very difficult to resist showering our friends and family with prodigious piles of presents!

It’s great fun watching the excited expressions on our gift recipients’ faces, but come January, our own features scrunch into scowl lines and frowns as the credit card bills arrive in the mailbox. Rather than simply paying the minimum balances due and hitting the mental “Ignore” button, here are five proactive things you can do to pay off your holiday debt sooner rather than later:

  1. Suspend your spending: This has to be priority numero uno. Until you’ve paid your holiday credit card balances off, spend money only on necessities. Remember all of the gifts your friends and family showered you with, and enjoy them instead of buying more “stuff.” If it helps, set a goal and reward yourself: as soon as your holiday debt is gone, you can buy yourself something you’ve been coveting (within reason).

  2. Cut up your cards: For many people, getting those credit cards out of sight is imperative. If you really don’t trust yourself not to use them, by all means, cut them up and get back to using real money only. You might also benefit from simply taking the card(s) out of your wallet and putting them someplace safe in your house. This way, you’ll still have them if an emergency situation arises, but you won’t be able to make in-store impulse purchases.

  3. Make molehills out of mountains: In other words, focus on the card with the highest interest rate first. The higher the interest rate, the more you’ll end up owing on that balance, so it’s best to get it as low as you can, and quickly. Keep paying the minimum amounts due on any other cards while you tackle them in order of their interest rates.

  4. Return and be refunded: It may not be the most socially acceptable thing to do, but if you were gifted anything that you simply don’t like or won’t use – find out if you can return it! Even if the gift-giver didn’t include a receipt, you can often find out where an item was purchased, in which case many stores will give you gift cards rather than cash. Use these gift cards to buy things you need, which will free up more of your money for paying down your credit card balances.

  5. Bang out a budget: While it may seem like common sense, it’s often the simplest ideas that succeed. As you get close to paying off last year’s holiday spending debt, look ahead to the next holiday season. Something as easy as buying one gift card every time you get paid can make a big difference. (And who doesn’t like receiving gift cards these days?)

By putting these five simple tips into action, you will be able to get your holiday debt paid off in a reasonable amount of time, freeing up that money for living life! Planning ahead will mean that next year at this time, you’ll hopefully be able to pay off your holiday spending in a much shorter time frame.

Image credit: Quint Cobb

Why Do I Need an EMV-Enabled Credit Card?

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Although it may seem impossible, credit card fraud still continues to be an ever-increasing problem, and more than 50% of the entire world’s credit card fraud happens right here in the good ol’ US of A.

Credit card companies have stepped up to address this problem by creating a technology that will make it much more difficult for your personal information to be stolen. The technology comes in the form of a small chip that is implanted into consumers’ newly issued credit cards, called an EMV chip. EMV stands for Europay, Mastercard and Visa because these were the companies that initiated the new technology.

Many Americans have heard about the EMV chip and may feel a lot more secure now; however, it’s important to know the whole story before you let your guard down. Simply having a card with a security chip won’t help you at all unless the stores you patronize have upgraded their credit card machines to be able to actually use the chip.

Swiping your credit card through a retailer’s card reader is like dangling your personal information in the face of a data thief. Magnetic stripe card readers are easy to bug and, in turn, easy to commit fraud through. It has been predicted that credit card fraudsters are in the process of targeting as many magnetic stripe payment machines as possible, while they still can.

Those retailers who have switched their payment terminals over to include a card reader will benefit greatly. If any data breaches occur in stores with card readers, the stores will not be held responsible. This is a huge incentive for retailers to get with the program and update their payment machines.

If a breach occurs while using an EMV-ready machine, the bank (who owns your credit card debt) will be responsible to remedy the situation. Luckily, data breaches are much less likely on EMV-ready machines because the consumer’s credit card is inserted into a card reader that will generate a code that is totally unique to that shopper.

This all sounds like a fantastic step toward lowering the amount of credit card fraud that is currently taking place in the US (and around the world). The problem is that stores are not required to implement the EMV readers. Magnetic strip cards will still be processed the same as before – by swiping.

What you should know:

As a consumer, you should protect yourself by using only credit cards with data chips installed. If your bank has not issued you an EMV card yet – get on the phone and request demand one. Once you have received a new card, try to do all (or at least most) of your shopping at stores that have updated their sale terminals to be able to read EMV chips. Insert your card into the card reader; avoid swiping at all costs!

Naturally, you’re never going to be 100% safe, especially if you do a lot of online shopping. The best way to protect yourself online is to limit web-based purchases to sites that have a solid reputation. We will delve into how to safely shop online in an upcoming blog post.

Image (used with permission) by Aranami

How to Recover from Identity Theft

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Although we strongly believe that the best defense against identity theft is a (virtually) impenetrable offense – if you let your guard down even for a second, your personal information can be stolen.

Some behaviors that will increase your risk for identity theft include: shopping online, using an public wireless internet connection, putting pieces of mail that contain personal info into the trash bin, and giving out your personal information to anyone  you don’t explicitly trust – whether over the phone or in person.

I suspect someone has accessed my personal info. What now?

If you have reason to believe that your private, financial or otherwise personal information has been stolen, there are some things that you can to do lessen the damage to your finances and credit report.

Remember, once someone accesses your personal information, they can then proceed to act as you, making a huge mess for you to clean up. The important thing here is to have a quick reaction time.

In order to stay organized during this stressful time, start writing down  everything you do that relates to the identity theft. Write down phone calls you make, including who you speak to and what was said. Make note of any discussions with the police, your bank(s), and your NJ attorney.

Keep track of all of the time you spend and any money you have to spend in order to clean up the mess, because expenses related to identity theft are tax deductible.

Place a ‘fraud alert’ on your credit report with the three major credit bureaus: Equifax, Experian and TransUnion. This alerts them to the fact that any financial activity that occurs while the fraud alert is in place is not done with your permission.

Just as important as contacting the credit bureaus is talking to your bank and any credit card companies. You must move as quickly as possible to alert your banking institution to cancel your debit or banking card. As soon as your bank knows there has been a theft of your information, you won’t be held responsible for anything the identity theft does thereafter.

If you realize your financial information has been stolen because of strange activity on your credit card or debit card, you once again must act fast to protect yourself. You’ll need to report the fraudulent activity within two business days of the date that it took place. This is why it is always a good idea to stay on top of the activity in your bank account and credit card accounts. If you check your activity online every day, you’ll be sure to spot an identity thief before much (or any) damage is done.

Next, you’ll want to make this event official by creating a report of the identity theft with the Federal Trade Commission (FTC). By reporting the identity theft, you’ll have a much higher chance of getting any negative marks removed from your credit report that were caused by the fraud artist. This action will also stop a company from coming after you for debts that were incurred by your identity thief – not you.

You may also wish to file a police report and contact a local attorney. Your attorney can help make sure that you’ve covered all of the right bases regarding the information breach, and will help you take legal action against any creditors that attempt to collect money from you that was part of the identity theft.

Image credit: Sebastien Launay

 

Preparing Your Child for Financial Success in College

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If you blinked and that little baby of yours is suddenly a junior or senior in high school, chances are good that both of you have started giving some thought to whether or not college is in the cards. If it is, there are a wide variety of fun and exciting new experiences right around the corner. Even if college is a year away, now is an appropriate time to start thinking about how your child handles money.

While s/he will most likely still rely on you for a large percentage of any money needed, college will be the first time s/he will have to make independent spending decisions. So, even though it’ll be your money, your child will be using it to form (hopefully) good financial habits that will last a lifetime.

There are many things you can do at this time that will either help or hinder your child when it comes to being financially successful. Here are a few tips:

  • Be ready for mistakes – As with anything our children do, making poor money choices in college is yet another learning experience. As a parent, be prepared to watch (from afar) your child goof up a few times at first. S/he may very well over spend and come crying to you for more money. If this happens, don’t come rushing to the rescue. Let your child feel just a little bit of the struggle that comes from making bad money choices. It is from that struggle that s/he will learn to make the right choice the next time around.

 

  • Put limits on those mistakes – While it is most definitely a good learning experience for college students to (for the most part) handle their own finances, as parents who are funding that experience, you can help them avoid utter disaster. Help your child obtain a low spending limit credit card or a debit card attached to an account that you share with him/her. Sit down with your child and review his or her spending habits periodically to go over any good and/or poor decisions.

 

  • Don’t be too generous – Although your instincts may tell you to load your college student’s bank account with plenty of money so they never have to want for anything, doing so is actually a really bad idea. Faced with open access to a large (to them) sum of money for potentially the first time in their lives can lead to an overwhelming urge to spend too quickly. Learning how to spend modestly is a skill that comes with time. Come up with a plan that will have you depositing spending money into their account more frequently, and in smaller increments. You can increase the amount of time between deposits along with the dollar amount gradually, as your child progresses and shows that s/he can handle more financial responsibility.

It’s also a good idea for your child to take on a very part time job during college, as long as s/he is able to do so without interfering with classes. While s/he will still need financial help from you, having an income of his or her own will further aid in solidifying the overall lesson you want them to learn: Budgeting is a life long skill that is just as important as all of the other information they’ll learn throughout their entire college experience.

 

Image credit: College of DuPage

Reverse Mortgage vs Home Equity Line of Credit

 

buying a houseAs we have previously talked about on our blog, there are many preconceptions when it comes to reverse mortgages. The basics: if you are age 62 or older and own a home with little to no mortgage payment, you can apply for a ‘reverse mortgage loan.’ You can present the equity in your home to a lender or bank as collateral for them to lend you money – either as a line of credit that you can use as needed, a one-time lump sum, or monthly payments. You can read more about the details of reverse mortgages here.

If a reverse mortgage sounds too good to be true, it’s for good reason. Even the most legitimate reverse mortgage loans come with high interest rates and exorbitant loan fees. Due to the 2008-2009 financial crisis that some financiers have referred to as “worse than the Great Depression,” many seniors have found themselves struggling financially in their golden years. Unfortunately, unscrupulous brokers have preyed upon some of these vulnerable retirees in order to profit from their financial strife.

If you are at least 62 years of age and have found your retirement income lacking, it’s important that you know how to avoid potential scams that could leave you in an even worse financial position. The following situations should send up a red flag:

  • It’s free money! If you receive an advertisement for a reverse mortgage that claims you will qualify for free money, throw the ad in the trash bin recycling container post haste. Reverse mortgages are definitely not free, and any lender who attempts to trick you by omitting important facts about fees and interest is not a lender you should trust.
  • No down payment. Not only are there down payments with reverse mortgages, but they can be quite hefty – sometimes tens of thousands of dollars!
  • Risk free. Some brokers misrepresent the risk involved in a reverse mortgage, which may lead you to believe that you can never lose your home, no matter what. The reality is that a reverse mortgage will become due if you don’t live in the home for 12 consecutive months, or in the event that you fail to pay property taxes or homeowner’s insurance. You must also keep the home and property in good condition. If you fail to meet the requirements of a reverse mortgage agreement, your home will be foreclosed upon, and you will be evicted.
  • Confusing language. If you don’t understand any or all of the information presented to you, do not sign anything. Reverse mortgage loans are notorious for being complicated and using tricky language. It is always in your best interest to seek legal counsel who can review the loan paperwork and translate anything that confuses you.

Because it can be easy to make a reverse mortgage sound like the best thing since sliced bread (and who doesn’t love bread?), many retirees don’t know that they have other options. One such alternative is a HELOC, or Home Equity Line of Credit.

While still using your home’s equity in order to boost your retirement income, HELOCs offer much lower interest rates. There is also no age requirement to apply for a HELOC, and there are no closing costs or loan origination fees. The equity in your home almost never gets depleted, which means your heirs will be able to keep your home without any problems.

Rather than requiring an age upwards of 62, in order to qualify for a Home Equity Line of Credit, you’ll have to have a very good to excellent credit score. You will also make monthly payments on your HELOC, and if you miss payments, you can lose your home to foreclosure.

If you need more information about how to increase your retirement income, seek legal counsel from a NJ attorney who specializes in credit counseling, elder law, or real estate.

 

Image credit: Images of Money

 

 

Raising Money Conscious Children is Easier Than You Think

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Some parents find it uncomfortable or unnecessary to speak frankly with their children about money; however, quite the opposite is true. The younger children are when they learn the importance of money and how it’s made, the better.

Think back on your experiences with money as a child and how they helped form your current “money mentality.” Are there things that you wish your parents had done differently with you? Perhaps your parents led by a great example and gave you a head start on the successful way you handle money today. Either way, it’s important to note that, as parents (or other significant adults in a child’s life) you can teach your children some very important financial lessons.

It’s easy to see by simply taking quick stock of the number of foreclosures and bankruptcies in recent years, that many adults don’t have a good handle on managing their money. That fact makes it all the more important to ensure that the next generation of children don’t make the same mistakes their parents did.

Although it may be tempting to want to give your child everything that you didn’t have, it’s crucial to tamp down that urge. Your influence over your child’s financial choices is powerful, and children will learn by the example that you lead and by the lessons that you teach.

How Can I Teach a Child the Value of Money?

As early as age 4-5, children have the ability to learn to wait. At this age range, the money lessons taught should be simple, and focused on the importance of waiting for things in life. Children this young won’t have a secure grasp on how money works yet, but they can and do learn quickly that they can’t always get what they want. In order to teach your child this lesson, reinforce the skills of patience and understanding that “good things come to those who wait.”

Around age 6-7, children gain the ability to manage their own money. It is at this age that you can begin giving your child an age-appropriate weekly allowance (in the amount of your choice) in exchange for work done around the house. At the same time, discuss the concept of saving and include your child in some of the financial choices you make for your household. School age children can learn a lot from a routine shopping trip with you. Lead by example as you shop for your family’s necessities. Practice thinking out loud as you make purchases so that your child can hear your inner dialogue and can begin to learn how you make wise purchasing decisions.

Once children reach the age of 9-10 and older, they will have the cognitive ability to grasp the concept of how banking works, including simple and compounded interest. While up to now they may have had difficulty with the idea of “off-site” savings (i.e. not in the piggy bank on the kitchen table) – early adolescence is an ideal time to introduce children to their own bank account.

Leading your children toward good financial futures will benefit you, as well. By attempting to set a good example, you’ll be more inclined to make better money decisions. Naturally, we all make poor purchasing choices from time to time, but your mistakes can also be teachable moments about warranties, saving receipts, and returning defective items.

 

 

Image credit: Carissa Rogers