Kids and money…

Keeping money in perspective.

One simple idea to help your child to put money into a healthy  perspective is to:

• Ask your kids to close one eye and hold a quarter a few inches in front of their eye.
• Now ask them what they can see out of that eye.
• Next ask them to hold the quarter as far away from their opened eye as possible (still holding it level with the single open eye).
• Next, ask them what they could see when the quarter was close (the typical answer is just the quarter).
• Now ask them what they could see when the quarter was held farther away from their eye (the typical response is that they can see both the quarter and  all the other things in front of them).

So, as you guessed, this object lesson is intended to communicate that if all you pursue in life is accumulating money and wealth, that will block out everything else in your life.  However, if  you keep money in a proper perspective, you will enjoy a more balanced life.

Here are some great ways to teach you kids about money

1. When your kids are young,  consider setting up a weekly allowance for them. There are several considerations that you may want to think out  before offering the allowance.  For example:
   • Do you want the allowance to just be automatic, no strings attached?
   • Do you want to the allowance to be tied to work that they do around the house?
   • Are you willing to consider paying your kids a little extra when they choose the save some of their allowance (paying interest on savings)?   Likewise, are you willing to charge them a little extra money when they ask for an advance on their allowance?
   • Do you want to encourage  (or require) your kids to set aside some money to share (with those less fortunate than them)?
2. Ask your kids where they think money comes from.
3. Ask your kids if they think it is a good idea to save money (and why)?
4. Sit down with them and try out this “what if “calculator to show your kids how fast money grows when invested  (the lesson of compounding).

The follow is an interview with a six year old child regarding their views about money.  You may be surprised by the responses.   Try asking similar questions to your children and you may be surprised as well:

(Q)  What is money?

It’s tender.  A dollar and coins.

(Q) What  do you do with money?

Spend it save or share it.

(Q) What happens when you only have a little bit of money?

You could end up with no money if you keep spending.

(Q)  What can happen when you have way more money than you need?

You can get greedy or rich.

(Q)  How do people get money?

They work at work.   If you’re like a kid you can have an allowance.

(Q)What’s an allowance?

Money that you can either save or spend.

(Q) Can you be happy with just a little money?

Well, kinda, well if you save or spend?

(Q)  What do you do with the money you share?

At church we have like this little bank.  We put money it and give it to people that need it.

Cashing in on coupons…

Many people don’t realize how much money they can save by using coupons from the newspaper, web, direct mail, etc. Here are some of the ideas that we tried out recently.

• Ask yourself if the product associated with the coupon is something that you really need.  Sifting out the coupons that don’t make sense for you and your family is a good way to control spending.
• Start a coupon trading club with your friends and co-workers.  This is a win win strategy that may allow you to double dip on the savings.
• Sort your coupons by:
  • Expiration date (earliest to latest expiration date)
  • By major categories (e.g. food, dinning, clothing, crafts, entertainment, travel)
• Check store ads and clearance racks to see if you can combine a sale with your coupons.
• Try keeping the coupons with you whenever you leave the house.   So, if  for example, you or your family decides to dine out, you can consider the coupon savings opportunities before deciding where to dine.
• If the store is out of stock of the item(s) that match up with your coupons, ask the store manager if you can get a rain check on the coupon.

Secret tricks used to convince you to pay too much.

When you look at TV, radio and print ads,  there are several little understood marketing tricks that are used to get people to pay more than they need to.  Here are just a few of the popular tricks:

1. Advertising products as FREE or at  ridiculously low priced and making good money by:
   • Charging  jacked up Shipping and Handling (or Processing) charges to customers.
   • Offering a return policy with required jacked up return shipping and handling charges.
2. The old “Priced as Low As” trick:
   • When you think hard about this, it becomes crystal clear what they are really saying. We translate it as something like “We may sell you item(s) no cheaper than this price”.  Hey, what does that really mean anyway?  Most folks don’t think to hard about it and assume that they are selling stuff at fantastic prices. As you can image, this is often not the case.   Maybe we should ask them to advertise using this phrase “Priced as HIGH as…”.  Hmm, that probably would not sell as good.
3. The old, if it’s sold at auction, it must be cheaper trick:
   • In reality auctions can bring out the competitive nature in people.  Some people need to win at any cost. Since most auctions have a fixed minimum price set before the auction start, the seller is protected and may make more profit in less time using this approach.
   • So, you really need to do your homework before putting that bid out there on ebay.  Make sure you know what the item is really worth before you bid.
4. The “If we call it a Factory Outlet store, people will assume that the prices are less than the mall” trick:
   • In reality, you may actually pay less at the mall if you catch a good sale.  Also, don’t be surprised if you end up paying the same prices than you can find at the mall.
   • When you think about it, it is brilliant to setup factory outlet stores (that have less overhead cost than being in expensive mall space) and pricing them at the same or higher prices.  Also, many outlet shops are closer to upscale residential neighborhoods.  Someone really thought this one out.
   • Of course you may be able to find lower prices at the outlet stores at times.  Our point is, don’t assume that outlet store prices are cheaper before doing your homework first.

Can Extended Warranties extend your current bank balance?

Generally, we’re not big fans of paying  for extended warranties.  However there are times that they can make good economic sense.  So, here are a few things to consider before purchasing an extended warranty.

• Does it make dollar good sense?
  Take the purchased  price of item and divide it by the number of years that you expect to own it. Next determine the difference between the price that you pay for each extended warranty year you would pay for the warranty and multiply it by the number of years that you expect to own it.   Finally, do some number crunching using the information below:
  • Determine the length and coverage of the free warranty that came with the purchased item
  • Will this warranty fit your needs?  If not
    • Subtract  the number of years of coverage you have  under the free warranty to determine how many years of extended coverage you will want to buy to arrive at [A].
    • Take the annual dollar price for each year of extended warranty coverage and multiply that by the number of years of coverage you want (See A)  to arrive at [B].
    • Take the purchase price of the item and divide it by the years that you expect to own it past the free warranty coverage period  that came with the item (see A) to arrive at [C].
    • Determine the difference between B and C (above) and this will reveal if the extra coverage  makes sense.
    • If the difference between the above two calculated numbers reveals an annual warranty cost that is unacceptable to you, then you may want to consider skipping the extended warranty.
• You may already have free extended warranty coverage and not even know it!
  • Many credit cards automatically cover items purchased with that credit card.  Call up your credit card company and as if  you card is already equipped with this coverage.  If so for the details (preferably in writing).  Read the fine print to know how to jump through the hoops.
• Your automotive insurance company may offer you very reasonable prices on your automotive extended warranty (if you choose to purchase one).  That being said they have vehicle age and mileage requirements to qualify.  So, it couldn’t hurt to give your insurance company a ring.

• Automotive extended care warranties. Are they worth the cost?
  You really need to read and understand the fine print and limitations to these types of warranties.  Many sound good, but when you need it you could be very disappointed when you need to use it.  We would start by assuming that all auto warranties contain catches to them.  So, here are some of the question that you may want to ask before signing up:
  • What isn’t covered?
  • Are there any limits to coverage based on mileage and or age?
  • What do you have to do to file a claim?
  • On what basis can they deny your claim?
  • Will your rates go up in the future?
  • Is the warranty transferable to another owner?
  • Can you take your vehicle anywhere for the repair work (including the dealer)?
  • Are both parts and labor covered?
  • Is the drive train covered (engine and transmission)?
  • Are you able to stipulate factory replacement parts on your repair?
  • Are they highly rated by the Better Business Bureau and also from independent reviews that you can find on the internet?
• Some items that it may make since to purchase  extended warranties on:
  • Expensive electronics that can cost a bundle to repair (e.g.  laptop computers, hi-end televisions, hi-end printers, large appliances).   Home warranties can be handy to help you sell your home as well.

Cheap and smart ways to eat out for less…

These days if you work at it you can actually eat for substantially less that you thought.  We have identified several ideas to help you get started.

Coupons can be a great way to save on food at restaurants.  However, it is important that know which ones are really a good deal.  Here are some tips.

• Do the math first – Calculate your saving ahead of time.  For example, if the coupon is a buy one sandwich get one free deal when you purchase one fountain drink, make sure to check the price of the required fountain drink.  Add the regular price of the sandwich and the fountain drink price.  Next, subtract the price of the regular price of two sandwiches and there is your saving.  Some establishments have been cleverly raising prices and marketing coupons.
• The fine print – Make sure to check the expiration date and other requirements to redeem the coupon.
• Saving $ off of what? – Some establishments will jack up their prices and then offer awesome discounts off inflated prices.

Money saving strategies for dinning out for less

• Fast Food
  • Stick to the real deal -Lately they have been offering great deals (e.g. value meals).  Remember, that the restaurants are probably barely breaking even on their cheap deals.  So, they hope to make money on the higher priced extras like fries, soda and deserts. Lately McDonalds figured out that they can make a decent profit by selling fancy coffees similar to what the expensive coffee chains offer, but for less.
  • Home base for saving – Save big by skipping the fries and snagging the soda at home.
  • Double up on that 99 cent burger, sandwich, baked potatoe (wendy), salad, etc and make a meal out that.  Skip the fries and soda and your eating cheap.

• Sit down restaurants
  • Predictable prices – Stick with restaurants that have standard pricing any time of the day (as opposed to place that jack up their prices for dinner).  One example is Chili’s bar and grill.
  • Two meals for the price of one - Many restaurant serve larger portions that people could (or should) eat in one sitting.  Instead, eat half and take the doggie bag home or to work and enjoy another meal.
  • Adults eating childish - Some people suggest that you order off the lower priced kids menu to save money.  I might try that on a to go order, but I don’t think I would have the guts to order that kind of meal when dinning in the restaurant.
  • Being fair -  If you choose to eat inside a sit down restaurant, don’t skip the tip.  Waiters work hard and they should be treated fairly.  If you’re not into tipping, order take out instead.

• Take out at the buffet
  • Several restaurants will allow you to do take out from the buffet.
  • Typically, the rule is that you can take out what you can fit in their take out container (typically a decent size).
  • The price for this may not seem cheap, but don’t be surprised if you get at least two meals out that take out container if you packed it up to capacity
  • This allows you save on those expensive beverages by getting them at home or out the reasonably priced vending machine at the office.
  • Also, since a waiter is not involved, there is no need to tip.

Finding free stuff that’s actually free….

When it comes to free stuff, the saying “there is no such thing as a free lunch” applies most of the time.  You end up working for potentially  free stuff  by giving out your email and street addresses, completing surveys and jumping through several internet based hoops.    We took a look around on the internet and found some deals that are actually free.

• Earn college credits (or even a degree) by taking free online courses.  No, were not kidding.  That being said, you will need to do some leg work of your own for this to work.
  • We think that this web site is probably the best place to start.  Remember stay away from the many bait and switch web sites where free is not actually free.
• Free software
  • If don’t feel like shelling a bunch of cash for Microsoft’s office product, try the free software equivalent called  open office (Word processing (like Microsoft Word), Spreadsheet software (like Excel), a drawing application (like Visio) and even presentation software (like Power Point).
  • Free software replacements for proprietary applications running on Microsoft windows.
  • A well respected and free Anti-Virus software package known as AVG
  • Ad-Aware free SpyWare removal software.
• Free Food
  • Apparently Saturdays are the best time to snag free samples at grocery and warehouse stores (like Costco)
  • Kids eat free deals  (search for restaurants by zip code)
  • Sign up for email specials directly on restaurant web sites (only give out a trashable email address that you will check weekly.  Never give out your actual street address or phone numbers if you want to avoid unwanted spam).  Examples include:  El Torito,  Sizzler,  Olive Garden,  California Pizza Kitchen, PF Changs Outback Steak House , Dennys
• Free teacher and learning resources from the Federal Government
  • Federal resources for education excellence.
• Free eBooks  – Project Gutenberg has 28,000 eBooks to download and print free.
  • Project Gutenbert FREE ebooks
• Free Internet Radio customized to your specific artists.  Essentially, you build the station play list yourself.
  • Pandora Internet Radio
• Print your own Free graph paper (several different styles)
  • Incompetech Free Graph Paper PDF’s
• Create your own work or personal planner forms. Choose from about 100 templates.
  • Download, print and customize your own planner at D*I*Y planner
• Kinda Free stuff - There  are tons of free stuff web sites on the internet.  Most of them will require you to provide your name, email and street address, etc.  If you want to try this, I would strongly suggest that you:
  • Sign up with the post office for a local post office box ($30 for 6 months).
  • Create a new email address that you are willing to trash later
  • Never provide your real birthday, social security number or phone number (or any other private information).
  • So, when you sign up provide them with your P.O. Box Address, your new trashable email address, a fake birthday, etc.
  • Go forth and Google something like “free stuff”
  • One final word of advice, if the site suggests that you try something to win a discount coupon, etc.  Skip it and move on.   The main thing you have to loose is your time.
• More kinda free stuff.
  • 250 Business Cards for Free?
    Well, not exactly.  After going through the online setup for the free business cards,  you’re billed about six bucks for the shipping and handling.  And that is the cheap slow boat to china shipping option.  So, you figure that might make two to three bucks on the deal.  The other not so free aspect of  order the business cards online is the avalanche of  offers you need to skip (or de-select) before you can finalize your order.  That being said, it was worth it for us to sign up for the not so free cards.  If you are interested just google “free business cards”.