Poll: How Often Did You and Your Parent(s) Discuss Money?

National surveys indicate that the majority of parents across our country have never spoken seriously with their children about money. In our own surveys done with high school students, we also find that a majority of parents are not fulfilling their responsibility to raise children to understand how money and credit work and how to stay out of consumer debt.

More than half of the students we survey indicated that they’ve had, at most, two conversations about money in their lifetime with parents. And these were high school seniors!!!

What about you? Interested in describing your own experience about money conversations with your parent(s) from your formative years? In your teen years, how often did you have discussions with your parent(s) about money, credit and/or debt?

Thank you for your participation. Have a wonderful week!


Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: Day2DayMoney


Raising Financially Savvy Kids-Part 1

April 6, 2011

Some of the inherent responsibilities of parents include protecting their children and preparing them to be responsible adults in our society. Teaching children the proper management of their financial resources helps to accomplish both of these goals.

If the children in your family are similar to my own (and I would bet there are far more similarities than there are differences), they probably do not enjoy being lectured by their parents, nor do they learn much thereby. So how else are they supposed to learn to be financially fluent if they don’t listen to what we tell them? Well, we show them.

Further suggestions will follow today’s blog, but here’s an easy, fun and effective way to teach children that money does NOT grow on trees and that it must be properly managed and controlled:

  1. Pull out the game of Monopoly or any other board game that has play money in real denominations. If you don’t have such a game, you can print some play money from www.printableplaymoney.net.
  2. Gather the kids around the table to “play” a game. Count on spending anywhere between 15 and 45 minutes for this activity. This game is best for children 8 or 9 years old or older, since they’re getting to the point of being able to grasp abstract concepts. You can tell them you’re going to play a game to show them how Mom and/or Dad makes and spends money every month.
  3. Explain the rules, such as, “We’re going to count out how much money Mom and/or Dad make every month and put it in the middle of the table. Our goal is to spend it on everything we need and then on things we want without running out of money.”
    At this point, you may choose to explain your feelings that you are sharing information that is only meant for your family, and that you are trusting the children not to talk to their friends or to extended family about how much money Mom and/or Dad make.
  4. Teaching children the realities and the value of household budgetingEnthusiastically and dramatically count out of the bills how much money your household makes every month. This should be gross income (before taxes and other deductions). Enjoy the look of astonishment on the children’s faces while it lasts. For many, any amount over $100 might lead them to think that the family is RICH!!!
  5. Explain that the first thing that comes out of the monthly income is Taxes. Remove from the pile of money in the middle of the table the amount of taxes you pay each month. To raise a financially responsible child, you should explain the benefits that come from paying taxes, including security provided internationally by our armed forces, security provided locally by the police and/or sheriff,  transportation infrastructure, schools, laws, health and human services, public transportation, and more. Avoid complaining bitterly about taxes, though it may be educational to explain how we have the right and responsibility to vote for representatives in our government who we hope feel the same way we do about how taxes should or should not be used.
  6. Next, explain that other amounts come out of your paycheck before you receive any money, including Medicare and Social Security (FICA), in addition, possibly, to insurance premiums and retirement account contributions. Remove the amount of your monthly deductions from the pile of money in the middle of the table.
  7. Teach children the importance of committing to saving for emergenciesNext, explain to the children that you have committed to paying yourself first, in case of emergencies, so that there is a specific amount that you put into your savings plan right off the bat. Let them know that this amount is non-negotiable, and that as they grow up, you expect them to do the same. Many children, even fairly young ones, may take comfort in knowing that their parents have a plan in place in case anything unexpected happens. Remove your monthly savings contributions from the pile.
  8. Then, ask the children if they think you should next pay for things you need or want? Explain what your survival needs are and remove that money from the pile. Typically, needs include shelter and security (rent/mortgage and their corresponding insurance and utilities), food and water (NOT including dining out), protective clothing (the very basics), and possibly medications or medical procedures.
  9. The next expenses to come out usually include things that make life comfortable and convenient, like transportation costs, child care, additional clothing, school activities, air conditioning in the summer,  etc. You may also include other obligations and loan repayments (credit card, student loan, signature loan, etc.).
  10. Continue to remove money from the pile until you’re left with “extra” money (usually pretty scarce). Remember to calculate the monthly amounts to set aside in order to take care of periodic expenses like vacations, car and home repair, holiday and birthday gift giving, etc. You may also consider including the children’s allowance or amounts they can earn through chores.

Going through this exercise every couple of years or so will help your children to realize that money is not an infinite resource, that it doesn’t grow on trees, and that their parents are in control of their finances. It generally has the added benefit of stemming the continual flow of the “gimmees” and the “buymees.” “Give me this” and “buy me that.”

Finally, letting our children “see” how important budgeting is to us will lead them to value it as well.

Have fun with this activity, and let me know how it goes.


Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: Day2DayMoney

Perpetuating Myths about Poverty

March 28, 2011

I’ve said it before, I was not the brightest financial light in the bunch when I was younger. Oddly enough, I come from a wonderful upbringing in a home where financial responsibility was expected and demonstrated, if not discussed openly. So, according to the philosophy that well-to-do and financially savvy parents beget children with the same financial smarts, I should have known better. But I didn’t.

Yes, balancing a checkbook and making a dollar stretch were two skills I was taught and which I have carried with me ever since. However, the wise usage of credit what not taught, most likely because I came of age at about the same time as the explosion of the consumer credit card in the 1980s. Before that, receiving a credit card while in college was not only uncommon, it was next to impossible.

So, when I pulled my first credit card offer from my apartment’s mailbox, the only thing I saw was the $2,000 credit limit. To me, that was like shouting, $2,000 of “free money.” WMaxing Out Credit Card was NOT Goodithin 36 hours of receiving that card in the mail, I had maxed it out and would, for a decade thereafter, carry a balance and pay interest (initially to the tune of 19% APR or more).

It took years to dig out of the credit card hole. In the meantime, I dabbled in a couple of payday loans, bounced a number of checks, and continually treated my savings account as a “deferred spending” account rather than an emergency fund.

I share this lengthy history to make the point that my troubles where not actually from a lack of education or from ignorance. I quickly learned how credit cards worked, but I continued to rely heavily upon them to subsidize the lifestyle I felt I deserved. What kept me in the cycle of consumer debt was my attitude, what I termed PovertyThink in a recent blog. I had conditioned myself to believe that this was the only way to look at my finances.

So here is a synopsis of a few of the myths that lead many of us to subsidize our unsustainable lifestyles through credit, thus keeping us from building true financial net worth (aka wealth):

  1. We prefer to blame others rather than take responsibility for our own financial mistakes. Banks and creditors, in particular, are the major targets of our frustration. They, after all, charge ridiculous fees for bounced checks and late payments, right?
  2. We seem to believe that lifestyles, income and effort should all be fair and proportional. That is to say, the harder we work, the more money we should earn and/or the more money we “deserve” to spend. We compare our efforts and lifestyles to those of our friends, neighbors and acquaintances, and say to ourselves, “I work just as hard as they do, so I deserve to live as well as they do.” For example, I saw friends and classmates back in college driving new(er) cars, purchasing season ski lift passes, and living in expensive condos. Some might call it impatience, but I felt I worked just as hard as they did (harder, I would argue, since I was an early-morning janitor at my school’s science center), and that I was consequently entitled to anything they had just as much as they were. Credit cards allowed me to initially satisfy that feeling but lead to long-term troubles.
  3. We choose immediate gratification over long-term security. “Living in the now” may be a popular catch phrase in movies and among a few philosopher wannabes, but it’s a terrible idea for financial security. Of course we can enjoy life each day, but this catch phrase ignores the absolute necessity to prepare ourselves for long-term financial survival. Spending money now that should be going toward savings and investments means we’re spending tomorrow’s security for today’s gratification.

Taking Personal Responsibility for Our Finances MUST Be Our First StepUntil we take personal financial responsibility for our own choices, stop expecting life (and especially financial affairs) to be perfectly fair, and we learn to delay gratification, we are destined for financial insignificance. We do not find long-term satisfaction in living paycheck-to-paycheck. We’ll find no honor in unearned positions or possessions. We’ll find no lasting peace of mind in expenditures for the pleasures of today.

In summary, for those who continue to blame others, demand financial equality (which is not the same as opportunity), and live only for today, the future may only bring more disappointment, greater financial inequality, and the dreariness of debt and financial ruin.

If you or someone you know is stuck in this rut of PovertyThink, it’s time to reconsider your situation. Do some reading about how financially successful people accomplished their goals, and follow their examples. Here’s a nice site to see read some real life financial success stories (without all the blinding glitz and false glamour of the lottery and get-rich-quick sites): Get Rich Slowly.

Have a fantastic day!


Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: Day2DayMoney

Published in: on March 28, 2011 at 1:33 pm  Leave a Comment  

7 Tips for Keeping You in the Black this Black Friday

November 23, 2010Keeping your own finances in the black this Black Friday

If you’re a Black Friday junkie, before you head out the door this Friday morning (likely EARLY Friday morning), please consider the following 7 suggestions for keeping your own finances in the black:

  1. Have a simple financing plan in place. There will be WAY more cool and attractive stuff on sale than you could possibly afford, so you’ll need to decide AHEAD OF TIME for whom you are purchasing the items, and how much you’re willing to spend for each person on your list. Create a simple chart with the names of gift recipients down the left hand column and the amounts you’re planning to spend on them in the right hand column. If you want to be more detailed, you could split the “Amount” column into two, with “planned amount” in the middle and “Absolute Maximum” amount on the right. Aim to spend no more than the middle amount, but commit now NEVER to exceed the right hand amount.
  2. Leave the cards (credit and debit) and the checkbook at home. You can’t overspend if all you’ve got is cash.
  3. Take a shopping buddy… but NOT JUST ANY shopping buddy. Go with the friend, family member or neighbor with whom you enjoy spending time but who will also keep you on financial track. Verbally commit to each other to stay within your stated spending limits.
  4. Budget for your Black Friday breakfast or brunch. Many make this meal part of their holiday traditions (in fact, for many, if may be the first time since consuming the Thanksgiving meal 20 hours or so earlier that they’re even able to eat). Just make sure you have a limit, you know restaurant’s price range, and you stick to your plan.
  5. Compare prices online: Make sure you know how much competitors are listing the items on your want list for. Check out their web sites. Of course, you have to take shipping and handling costs into account.
  6. Think in dollars, NOT percentages. Forget the sale signs. “75% off” doesn’t mean anything to your purse or wallet. The reality is NOT how much you’re saving but how much you’re spending. Remember that sales come and sales go. What’s “hot,” “in” and “cool” this year will be next year’s forgotten fad. However, you only get to spend the dollars in your wallet once. After that, they’re gone, and they’re not coming back. Make sure you’re spending them on your own priorities and not what the stores are telling you your priorities should be.
  7. Make your Christmas about the people in your life rather than the “stuff” you’re buying for them. We all know that relationships are more important than things, yet too often we get caught up year-after-year in buying and consuming. This year, get creative by spending MORE TIME with the important people in your life and spending LESS MONEY for stuff that will sooner or later likely end up in the attic, garage, or, worse, the dump just taking up space.

I wish you all a Happy Thanksgiving, Happy Holidays, and (although still a few days early by my standards, but if you can’t beat ’em…) a very Merry Christmas!

Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: Day2DayMoney

Entitlement Spending

Picture this: You’ve had a lousy day at work. You’re exhausted. You’ve worked your tail off for your boss, and he/she can hardly remember your name let alone express appreciation for all your hard work.

Now, let’s assume that it’s also payday. Here come the temptation. Do you go out after work and spend money you don’t have in order to blow off some steam or do you find another avenue for relieving your frustration.

Spending money you haven’t planned for or that you just plain don’t have, all because you feel you “deserve” to treat yourself to something nice, fun or tasty, is called “Entitlement Spending.” For those who unwind at a bar after work every day, we’re talking about $400 or so a year just for one beer. For those who splurge on clothing once a month, it could be much more than that.

Entitlement spending can also work the other way around, though. Some people feel the same urge to spend when they’ve had a great day. “It’s time to celebrate!”

Here are our tips for dealing with the temptation to fall into the entitlement spending pit:

  1. Add a category to your monthly budget called “free money.” This is not “free” as in no cost, but “free” as in “available.”
  2. Set aside a modest amount into this budget category. For some people, it might be $5 per month. For others, it might be $50.
  3. Don’t think of this “free money” as something you’ll spend on anything specific. Rather, this is for those days and times when you want to spend on impulse.
  4. You may want to withdraw the cash from your bank and place it in an envelope in your glove box, purse, or desk drawer.
  5. Just remember to tell yourself that once this money’s gone, that’s all there is for the rest of the month. Try to hold onto it until the last week. By then, you’ll realize that you really don’t even want to spend money as a way to blow off steam.
  6. Seeing your emergency savings account grow can be a reward in and of itself.

Kick the Entitlement Spending Self-Defeatist HabitFinally, my favorite way of looking at Entitlement Spending, especially given that we hear a lot of people try to justify it by saying, “I deserved it,” is this:

Telling yourself you deserve to spend money you don’t have after a rough day is like smashing your thumb with a hammer and then saying you deserve to give yourself a puncture wound to go with it.

Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: MoneyDay2Day

Published in: on August 26, 2010 at 4:12 pm  Leave a Comment  

Saving or Deferred Spending?

Saving GoalsHaving read “How to Create Barriers to Your Savings” by PT Money today on WideBread, I was reminded of wish that in my college days, I had, first of all, thought of savings as savings and not as “deferred spending,” and second, that I had protected my savings from myself. I raided it pretty regularly every 3 to 4 months.

Now, in our workshops at Debt Reduction Services Inc, we teach this very concept for emergency savings. Automate the deposits into your savings accounts, but make it difficult to get to them. Unless you’re extremely disciplined, you should not even have your savings with the same bank/credit union as your checking.

Creating online savings accounts can be a good idea too, unless even transferring money from the comfort of your own home and waiting a few days is still too much of a temptation. Otherwise, you could consider using a bank or credit union that doesn’t have a branch within 20 miles of your home, work, or other area you frequent regularly. And certainly ask them to block any online or telephone transfers capabilities.

That way, if you have to actually go into a bank or credit union to withdraw the funds, it’s much more likely that it would take a real emergency to motivate you to do so.

Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: Day2DayMoney

Published in: on July 23, 2010 at 12:19 pm  Leave a Comment  
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Fun Video for Going into the Weekend

SNL Don't Buy Stuff

Don’t Buy Stuff You Cannot Afford. It may seem obvious, right? But identifying things that are obvious  but that many people miss all together is what Saturday Night Life excels at.

17th Century French philosopher, mathematician, and writer, René Descartes (probably best known any more for his popularization of the phrase “I think, therefore I am”) opens his Discourse de la Méthode with the phrase: “Nothing is more fairly distributed than common sense: no one thinks he needs more of it than he already has.” Très bien dit, M. Descartes!

This is one of my favorite personal finance videos of all time: the Saturday Night Live “Don’t Buy Stuff You Cannot Afford” segment from February 4, 2006 with Steve Martin, Amy Poehler and Chris Parnell.

SNL Don't Buy Stuff Booklet

Start your weekend off with a smile (and a few laughs) about the common sense of day-to-day money management: http://bit.ly/bLULsE

Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: Day2DayMoney