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The Best Family Finance Articles for September 2014

Money will buy you a fine dog, but only love can make it wag its tail.

We’ve been scouring the web for good family finance articles all month and posting them on the FamZoo Facebook page.

Here are the very best ones from the month of September:

  • Essential Money Skills Every Child Needs to Learn Before Leaving Home – Part 1 — Shannon shares a set of critical money survival skills that parents should strive to teach their kids before they leave the nest. It’s an excellent list. Check it out and see how you’re doing with your kids so far. Nailed it? Then move on to part 2.
  • 14 Wise and Witty Quotes About Money and Happiness — Cathy from WiseBread highlights 14 great quotes reflecting upon the complicated relationship between money and happiness. It includes this thought-provoking outlier from Albert Camus: “It’s a kind of spiritual snobbery that makes people think they can be happy without money.’ Perhaps true, but I still love this wonderful Kinky Friedman observation that didn’t make Cathy’s list: “Money will buy you a fine dog, but only love can make it wag its tail.”
  • The Wage Gap Starts With Less Knowledge, and Lower Expectations — Do parents have lower expectations and less communication around money when it comes to daughters versus sons? Some interesting findings and commentary from Ron Lieber of the New York Times.
  • 4 Fun Ways to Teach Your Kids About Money — Shameless plug alert! Yours truly is quoted in this U.S. News Money article with two of my favorite tips: budget-based allowances (as opposed to random ones) and parent-financed loans for big ticket items. You can find my complete list of 7 tips for the article here.
  • Allowance Advice for Well-Meaning Parents — OK, this is more of an anti-pick for the month. News flash: mindlessly doling out allowances to your kids with no thought, game-plan, or discussion might be bad idea. Duh. Like clockwork, this Mandell “research” comes up every year.
  • In Checking Accounts, the Less You Have, the More You May Pay — This little exposé in the New York Times explains why prepaid card accounts are often a much better option than checking accounts for kids, teens, and young adults (or anyone living close to the financial edge): “The general rule is that the less money you hold in a bank, the more you pay the bank in fees.”
  • Seven Investing Lessons for Teens — Teaching your teens about investing does not start (or even stop) at picking AAPL (Apple) or DIS (Disney). Manisha Thankor shares a better lesson plan on the Wall Street Journal blog.
  • How to Avoid Paying for Your Kids Forever — “Emerging adulthood” is what psychologists are now calling the years of extended child dependency between the teen years and the late twenties. We know it’s a problem when it warrants its own label. Dan Kadlec shares some stats, profiles some classic case studies, and covers strategies for accelerating the financial launch cycle for your grown up kids.
  • Why Parents Shouldn’t Take Over-the-Top Vacations — Have you ever taken your kids on an expensive vacation only to realize it wasn’t worth it? If so, you might be teaching your kids some very bad financial lessons. Some excellent points by Ted Jenkin in this Wall Street Journal post, but he gets himself in some hot water by taking on the Magic Kingdom (see comments). Perhaps a poor choice of examples...
  • The Right Way to Bribe Your Children — Is rewarding children for completed tasks wrong? Some good commentary on ownership, linking responsibilities and privileges, spot bonuses, and matching systems. Also a summary of some stats from a July chore and allowance poll.
  • Teaching Kids Through Debt — Stephanie from Six Figures Under has a wonderfully positive approach to teaching her kids about debt. Favorite quote: “Involving children in your goals gives them a chance to share in the successes.”
  • Learning How to Exert Self-Control — The man who created the legendary experiment on delayed gratification known as the “Marshmallow Test” is now 84. Here’s an entertaining interview in the New York Times and some enlightening tips for all of us on learning to exert self control through distractions. I also love his optimism: “I don't do melancholy.”
  • Should Parents Control Their Kids’ Money? — When I saw the headline, my first thought was: “uh-oh, financial helicopter alert!” But, then I read the post and the alarm bells faded. Kim is really just giving her daughter sensible guidelines like splitting earnings between spending, saving, investing, and giving. She’s still allowing her child to make decisions about money (and mistakes) with the spending component while coaching her on sound personal finance principles. Along those lines, I let our kids choose and adjust the percentages in each bucket for a little more control — as long as no bucket gets zero or a negligible percentage. Given some up front discussion, none of the 5 kids made bad choices in that regard. In fact, some even saved and donated more than I suggested. Kim describes a brilliant move on the Roth IRA too! Consider adding a matching plan to that strategy.
  • You Can’t Get this Credit Card Unless You Pass this Quiz! — Cool: A credit card that requires you to pass a quiz to get it. You have to pass a test to drive a car, why not pass a test to use a credit card? They can both do serious damage when used improperly...
  • 9 Reasons Why Saving $1 a Day Builds Fortunes — Some very compelling motivation to teach your kids to start investing early!
  • The Pros and Cons of Avoiding Credit Cards — The one down side of so many Millennials (over 60%) completely avoiding credit cards is that they often have what they call in the industry a “thin” credit file — i.e., no credit history. That makes it hard to qualify for loans or get the best rates on them. Rod Griffin from Experian suggests that people in this boat “apply for a single card and use it periodically for small purchases.” My advice goes a little further: use a single credit card for a very specific, predictable monthly expense category — perhaps gas. Use prepaid cards for all your variable expenses. That minimizes the risk of getting into debt while systematically building up a credit history.
  • Ace a Personal Finance Game, Win a College Scholarship — H&R Block is handing out $3M in scholarship money (132 $20K prizes and one $100K grand prize) to winners of this budgeting game which is a 9-16 week simulation in which players manage a paycheck, bills, savings, etc. See the Budget Challenge app page on iTunes for a description of how the game works.
  • A Saver’s Guide to Instant Gratification — Who says saving and instant gratification need to be mutually exclusive? Two of our favorite things — saving and optimism — rolled into one with this nice post on Frugal Fringe!
  • Our Retirement Savings Crisis—and the Easy Solution — By the numbers: Here’s why you need to teach your kids to start saving for themselves early if you want them to have a comfortable retirement.

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