Should A Summer Job Signal The End Of Allowance?

I recently received the following thoughtful question from a FamZoo parent (slightly edited to ensure anonymity):

Parents Don't Need To Be Perfect To Teach Kids Good Money Habits

“Perfect is the enemy of good.”

So goes the aphorism popularized by Voltaire. Translation: you may never complete a task if you fixate on doing it to absolute perfection. Worse, you may never even start.

That’s why I have a big problem with the common admonishment: “Get your own financial house in order before teaching your kids about money.”

The 5 Things I Want To Teach My Kids About Money Fit On A 4 By 6 Index Card

Keep it simple, stupid. Keep it short too.

I was reminded of the famous KISS principle while reading Ron Lieber’s recent New York Times Your Money column about distilling your financial to-do list to a set of bullet points that fit on a 4 by 6 index card.

The examples in Ron’s article inspired me to produce this variant: a “Money Mentor Index Card” listing the key things I want to teach my kids about money. Here’s the list.

I want to teach my kids about:

81 Money Lessons Your Kids Will Wish You Had Taught Them 25 Years From Now

How can we as parents know we’re teaching our kids the right things about money? That’s a tough question. There’s lots of potential ground to cover, and it can be hard to cull out what’s truly important.

What if you could jump in a time machine, set the dial forward 25 years, blast into the future, and ask your children — now grown adults — what they wish they had learned from you about money? Answers in hand, you could just travel back in time and make sure you carefully covered those bases.

Obviously, that’s not going to happen, but I might have the next best thing for you. What if you could corral a whole bunch of thoughtful, accomplished, even famous adults and collect their answers to the following question:

Young Parents Earn Baby Bucks for Learning Life Skills

We’re always delighted to work with non-profit organizations who help families develop critical life skills. The Family Resource Centre on the Island of Grand Cayman is one of those wonderful organizations. Through its Young Parents Services program, clients bring their babies with them to the center four days each week where they participate in presentations, take educational online classes, learn about helpful parenting tools, and receive interactive parenting advice. The program promotes healthy lifestyles and habits to help equip the young parents with the skills they need to have a successful, well-rounded family and professional future.

Personal finance is clearly one of those valuable life skills, but how does FamZoo fit in when the kids involved are just babies? It’s not for the kids. It’s for the parents. Carlie Rowell, a program support worker, explains:

Positively Parenting and Personal Finance for Kids

Roxanne Lochridge is a “Mama” to 3 youngins, a positive parenting evangelist, and a “family scientist.” In a recent interview, Roxanne grilled me on the following topics:

• [00:00] Who the heck are you?
• [01:24] How did you get involved in helping parents teach kids personal finance skills?
• [04:03] What is a virtual family bank?
• [05:50] When should kids start learning about personal finance?
• [07:55] Should parents pay their kids an allowance, and if so, should that be tied to chores?
• [10:47] Do you have any tips on teaching kids to budget?
• [15:55] How do you teach your kids about planning for and paying bills?
• [18:01] Are prepaid cards a good idea for kids?
• [19:45] What are your thoughts about giving your child a loan?
• [23:02] How do you encourage your kids to save when their saving and investment options have such tiny returns?
• [26:47] What are some good ways to introduce kids to philanthropy?

Want to know the answers? You can listen to the interview here or click on the links above to jump right to the answer in the transcript below.

You Should Teach Your Kids About Money This Way...Or Not

Parents, do you cringe when you hear a sentence beginning with “You should...” coming your way? Someone is about to hit you with their sage advice on how to raise your kids. Oof. No matter how well meaning the intentions, such assertions are inherently presumptuous about your family’s unique situation. Christine Bader wrote a wonderful post about “You Should” encounters today. Stick with stories instead. Tell a mom (or dad) what you did in your situation, not what she should do in her situation. As Christine says:

“Stories are much more powerful than recommendations.”

Let the recipient decide how to apply or adapt your story...or not. Amen. That’s something we can all keep in mind when talking to others about teaching kids good money habits.

So, how should you teach your kids good money habits? I don’t know, but here are some good stories to consider:

Cigars? Beer? Try Dad Rules Instead

So your best buddy just became a dad, and you’re looking for that special guy-centric something to commemorate the monumental event. Of course, you could go with one of the classic standbys: a box of cigars, a six-pack of beer, or something else to dull that vague sense of foreboding. Instead, maybe you should try something that will actually help your buddy successfully navigate his new-found responsibility, rather than blunder through it blindly.

Stumped? Puzzle no more. I’ve got just the answer: Treion Muller’s new secrets-of-fatherhood handbook: Dad Rules: A Simple Manual for a Complex Job.

Treion (pronounced “tree-on”) nails the requirements for this tricky genre geared toward an often reluctant audience:

• Blissfully short: It’s 81 quick pearls of wisdom, each of which fit easily on a single page in big type no less.
• Simple to understand: Each nugget of advice is easily digested. No big words. No fancy concepts — unless you count the occasional pithy quote from some old dead wise person, but those are optional.
• Room for disagreement: Treion acknowledges that your mileage may vary. He grants you license to skip the rules that you feel don’t apply or that you just plain don’t like. It’s still handy to have them around for reference, though. That way, you can skulk back and adopt them when you realize you were wrong...
• No required reading order: Skip around. Read one rule here, one rule there. Re-read a handful from time to time. They’re largely independent, and cross-referenced when related.
• Immediately actionable: That’s the best part. You can read a simple rule, take it to heart, and go make it happen with your kids right away. No assembly required.

FamZoo dads (and moms!) will dig Dad Rules because it shares a number of core principles that FamZoo also holds dear. Here are just a few I jotted down along the way:

• Every family is different. Pick the “best” practices that work for yours. Both FamZoo and Dad Rules offer a toolbox of potential solutions culled from the experiences of everyday parents, or as Treion puts it, “the combined wisdom of many dads who have faced similar challenges and survived.” Treion echoes the experience I’ve had just within my own family and underscores why we’ve worked so hard to keep FamZoo so flexible: “Each child is different. What works for one may not work for another.”
• Maintain consistency between your thoughts, words, and actions. One of those pithy quotes Treion passes along is this gem from Gandhi: “Happiness is when what you think, what you say, and what you do are in harmony.” It feels so right and so good when you actually say what you’re truly thinking and, further, when you actually do what you say. You know you should be a good dad. You say you want to be a good dad. Dad Rules helps you do just that. Similarly, in our life skills niche: You know you should teach your child good money habits. You say you want to teach your child good money habits. FamZoo helps you do just that. Following through effectively does indeed bring great happiness.
• Mastering basic life skills requires practice. In Rule 70, Treion reminds us: “There are some basic skills that every functional human being, including your children, should know how to do. Don’t assume your kids will just learn how to do these things by osmosis.” Yes, it’s so easy to take for granted what we already know — to forget the process that got us to that level of understanding. Don’t leave your kids to struggle through learning the hard way when the stakes are higher. Be an explicit life skills mentor. That’s why the FamZoo tag line is: “Preparing kids for the wild.”

So what are some of the rules? It was tough to choose favorites, but I picked out 5 that really resonated for me:

Rule 44: The answer to, “Dad, can I show you something?” is always, “Yes!”

This question is the precursor to some of the greatest moments in your life. Don’t miss out. And, remember, one of the most valuable things you can give your child is your undivided attention.

Rule 45: If you feel the urge to lecture, stop and think about it first.

Kids learn by doing, not lecture. ’Nuff said.

Rule 55: Raise children, not clones of you.

It’s OK to reinforce your core values, but embrace and encourage your child’s natural diversity along the way.

Rule 68: Establish a healthy dose of family traditions.

Traditions are such a key part of the family fabric. And, I agree with Treion when he says "the best traditions are the ones that involve serving others.”

Rule 70: Make your kids work for their rewards.

Ownership. Responsibility. Work ethic. Self-reliance. I love all those concepts. And, I loved Treion’s cautionary comments for this rule:

I call this is the “anti-entitlement” rule. In a world of excess and limitless material possessions, our children are sometimes victims of overindulgence and feelings of entitlement. “I want” and “I get” are often synonymous. They ask, and we give. Beware! This seemingly innocent practice just feeds into an already growing culture of entitlement. If you love your children, make them work for their rewards.

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That rounds out my top 5 favorite dad rules. I’m sure you’ll find a bunch that hit home with you and your family. You’ll also undoubtedly find a handful that will give you pause and make you think: “Man, I really need to start doing that with my kids!” I did, and I’m no spring chicken when it comes to the fatherhood gig.

So, if you have a buddy who is taking the plunge into parenthood, grab him a copy. He’ll appreciate it. Who knows? Someday Dad Rules may even unseat beer as the most popular baby shower present for dads. Well, OK, no reason you can’t get him both. I suspect they go pretty well together.

How to Keep Your Kids on Task Without Hovering

It’s almost the end of summer.

You’ve got lots to do. Your kids have nothing to do.

Camps and summer leagues have stopped. Schools haven’t started.

Your kids are in limbo. Arrghh!

The thought of them sitting around watching TV or fooling around on the computer all day is driving you a bit nuts, even if school is right around the corner. You can think of a list of productive things they could be doing, but you’re too busy with your own work, errands, or chores to be constantly prodding them along.

So, how are you getting something done without letting your kids turn into complete couch potatoes behind your back?

Here’s what I’ve been doing:

Make a checklist together each morning. I’m sitting down with my 9 year old son each morning and making a checklist of meaningful things to accomplish during the day. It includes:

• a little math (30 minutes in a workbook and 15 minutes of math flashcards on FactMonster.com),
• some music (30 minutes of piano practice),
• some physical activity (lacrosse in the backyard with the big bro),
• occasionally a paid job, like washing the car.

Here’s our list from today (of course, we keep it in FamZoo, but paper works too!):

We both like this because the rules and expectations are very explicit and clear from the beginning. It really cuts down on the whining and the nagging.

Check off and notify on completion of each task. My 9 year old son gets to set his own schedule (for the most part), but he is responsible for checking off the tasks and notifying me via text whenever he completes a task. I only go into the dreaded nag mode if I haven’t seen a text in a while. He seems to appreciate the autonomy. I’m able to stay more focused.

As for notifications, my 9 year old can’t text directly (no cell phone yet), but since we’re using online checklists in FamZoo, I can just set up an automatic alert to text me whenever he checks an item off his list. Here’s the Alert setting for his Checklist (my wife gets a notification as well, so she can feel connected while away at work during the day):

And, here’s what my text notifications looked like yesterday:

Yes, he’s still playing computer games, watching a little SpongeBob, and assembling Legos throughout the day, but at least I know he’s getting a nice balance of other activities in as well. I’m getting more done too. Win-win.

Do you have any tips for keeping kids on task during the end-of-summer doldrums? Share your techniques in the comments.

What's the Tooth Fairy's going rate these days? $10? Are you serious?

My friend's kid just lost his first tooth. The Tooth Fairy cometh — tonight! But how much should the TF leave under the pillow? My friend is surveying his buddies on Facebook to get some input, so I figured I'd take the opportunity to do some spelunking in the FamZoo database to get some real statistics for him¹.

Here's what I found based on credit transactions containing the word "tooth" (after eliminating a few spurious ones referring to "BlueTooth" which would have seriously skewed things!):

Min	Max	Average/Mean	Median	Mode
$1.00	$10.00	$2.63	$2.00	$1.00

$10? Whoaaa! Maybe that was for a whole mouthful. Or, maybe the parent was playing catchup for some previous missed visits.

Anyway, if we consider $10 and up to be outliers, throw them out, and re-run the stats, we get:

Min	Max	Average/Mean	Median	Mode
$1.00	$5.00	$2.31	$2.00	$1.00

Personally, I favor giving a dollar. Maybe two for a molar or even more for some sort of painful dentist extraction.

If you're looking for some additional commentary, stories, and lots of opinions, you'll enjoy the Wall Street Journal blog post "How Much Does Your Tooth Fairy Give?"

What about your family? How much (or what) does your Tooth Fairy give?

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¹To protect privacy, we only disclose anonymous aggregate statistics. So, those of you who gave in the high or low range, don't worry, your secret is safe with us!

Are Your Kids Active Online?

If so, here is a nice short post by Seth Godin that makes for some excellent family dinner table reading and conversation. Kids (and some parents) really need to wrap their heads around the consequences of a permanent digital record...

"I Do Not Know" Is a Four Letter Phrase

"Dad, I heard that you can make it rain by shooting stuff in the sky. How does that work?"

http://en.wikipedia.org/wiki/Cloud_seeding

"Dad, how fast is a speeding bullet anyway?"

http://en.wikipedia.org/wiki/Bullet

"Dad, I keep hearing about Darfur, what is going on there?"

http://en.wikipedia.org/wiki/Darfur_conflict

With the Internet in general and Wikipedia in particular, a parent never has to respond with "I don't know" again. Instead, the response can always be: "Let's go look it up" and a few keystrokes later, everyone is a little wiser. (Always a good idea to Google for some alternate information sources as well and teach the kids about healthy skepticism and due diligence - see snopes.com)

Recently, I noticed the folks at Wikipedia are asking for donations via a prominent banner at the top of their pages. I use the site so regularly and have shared so many great family "teachable moments" there, that I just couldn't resist the request. I gave this morning with the comment:

Wikipedia is a wonderful resource and a symbol of the boundless possibilities offered by the Internet. It has virtually eliminated the phrase "I don't know" from my family's vocabulary.

How about you?

Don't say "I don't know", click below!

Awakening the Possibilities on One Cheek

Here is another great video to share with your family and friends. Check it out:

I came across it today in a post on Garr Reynolds' most excellent Presentation Zen site.

World of Warcraft: A Better Venue for Practical Experience than College?

My sons (along with 4 million other people in the US) enjoy playing the online game World of Warcraft. As a homework assignment for parents at the beginning of this school year, I was asked by an English teacher to submit a bio for my oldest son. Here is a relevant excerpt:

My son is also a very avid player of the online game World of Warcraft - a massively multiplayer online role playing game. The game is actually quite fascinating to observe since it involves coordination and collaboration between many players. In many ways, I think it is a microcosm of what goes on within companies and various societal groups. I actually see my son picking up a variety of valuable skills while he is playing: leadership, diplomacy, planning, strategy, etc. The downside of the game is that it can become very obsessive (like many things in life), so we set boundaries (that are not always appreciated) like no play during school nights.

So, I was amused today when my buddy Chris sent me a link to this post which captures some of the same sentiments. Here's an excerpt:

The most challenging events in WoW requires the coordination of 25 people working closely as a team. It shouldn't come as a surprise that the same situations that occur in the real-word when organizing 25 people, occur in virtual worlds as well. Problem-solving, politics, leadership, communication, team-building… just to scratch the surface.

Here's a prediction for you – right now there are teen aged kids gaining more practical experience leading and organizing in WoW then they'll ever learn in college. 10-20 years from now someone will cite WoW as the formative experience that they built on to become political or business leaders.

I guess pretty soon, we're going to start seeing World of Warcraft character levels, guild affiliations, and raid stats on the resumes of prospective employees ;-)

Seriously, though, if you are a concerned parent of a budding WoW player, I encourage you to keep an open mind. Sit down and spend some time watching them play. It's pretty fascinating, particularly when they get into coordinated raids.

And, by all means, enforce moderation if necessary. Despite the protestations of our sons, we use the game's parental controls to define the allowable blocks of play time. The controls are convenient and help to minimize the drama and tedious negotiations around play time.

Balance is key.

Teaching and Bonding with the "Big Project"

Last summer, I blogged about an Alienware gaming PC purchase experience. These machines are indeed cool. In fact, so cool that the boys have been saving up for another Alienware for months, but progress has been very slow for them given the lofty price tag. This got me to thinking about the comment/challenge left by my buddy Paul on the original post:

"Bill, you gotta check out newegg.com. What better project than to build your own kick butt gaming computer for half what you'd pay dell/alienware for."

As I mulled over the challenge, fond memories of my college days with Chris in the digital electronics lab swirled in my head. Yeah, this could be fun! On the other hand, I can just imagine sparks and plumes of smoke streaming out of a poorly assembled home-built rig upon plugging it in for the first time. I can vividly picture the dejected looks on the kids' faces and my wife shaking her head in the background as I initiate the humiliating call to the Geek Squad to bail us out. Yeah, this could get really ugly if things go awry...

But... building a killer gaming PC with my computer enthusiast son could be a great bonding and learning experience. It's an opportunity to learn some basic project skills: planning, problem solving, "disaster recovery" and collaboration. It's a tangible way to learn the importance of patience and perseverance. It's a unique opportunity to experience the pride and satisfaction that comes with building something with your own hands to your own specifications. It's a chance to learn that the journey can be as gratifying as the result. Yes, the potential upside is huge.

Well, several weekends ago (with my wife safely out of town I might add ;-) my son and I decided to go for it. The week beforehand, my son carefully culled together a list of components from the NewEgg catalog to match his gaming requirements while abiding by our budget constraints. Those who are interested can see the bill of materials in the spreadsheet at the bottom of this post. Armed with my son's list, we made the purchase swiftly online thereby enjoying another benefit of this approach: no annoying in-store Fry's experience (don't get me started!).

Paul was right: we were able to assemble a set of components at about half the cost of a comparably equipped pre-made machine. In fact, (assuming it actually works) our machine would be more powerful. It would also be outfitted with just the capabilities we wanted and valued. This goes for hardware and software. No more annoying pre-loaded promo software from the manufacturer cluttering up a substantial portion of your hard drive - nice!

Our excitement mounted with each new box that arrived throughout the week. By the time the weekend rolled around, we were ready to rock.

To guide our efforts, we Googled on "build your own PC" and used a collection of articles like this one to provide the high level recipe. This experience reaffirmed what an amazing resource the Web is. Every time we were confused or stymied, a set of well considered Google queries always (ultimately) led us to an answer - no matter how seemingly obscure the issue.

Almost 48 elapsed hours later (we were being super cautious and working in sporadic blocks of time - aka, "family mode"), we were ready for the moment of truth. As I reached for the power button, my son looked so anxious I thought he was going to toss his cookies. He wanted to wait out in the hall while I flipped the switch, but I convinced him that, being lab partners, we needed to witness the moment together...

It's working! Huzzah! Our machine whirred to life. We clapped each other on the back and grinned. We worked through the relatively straightforward task of installing the operating system (Vista). No problems. After lots of self-congratulation, we moved on to the next big acid test: installing and running the graphics intensive game Battlefield 2.

Somewhere in that process, our DVD drive suddenly "disappeared" - the operating system just no longer recognized it and, as a result, we could not perform any more installs. After poking around on some manufacturer web sites and browsing online manuals with decent sized pictures, we determined that we (ok, "I") had attached the cables incorrectly to the DVD drive. After a little dissassembly and minor surgery, we were back in business. The drive reappeared. We were able to proceed with the install and get to the Battlefield test. More self-congratulation.

That's where we ran into roadblock number 2: the game would start to come up and then crash. Doh! More googling and some diagnostics later, we determined that our graphics card was not Vista compatible. By this time, we were anxious to be done, so it was off to Fry's (sigh) to get a Vista compatible Graphics Card. (Note: we were able to return the original card to NewEgg without hassle.)

A little more disassembly and minor surgery later, we were back to the gaming test. This time: success! Battlefield worked like a dream: better performance and sweeter graphics. High fives all around!

The victory was short lived. Moments later after installing some unrelated piece of software, it happened again: the DVD drive mysteriously disappeared. Roadblock #1 was back again. Bummer! The cycles of euphoria and disappointment were starting to wear thin. Back to Google. Ultimately, we found the culprit and the obscure solution here. A little lesson in Windows Registry hacking and we were ready to reboot and try again. Success! Our DVD drive was back and working. Low fives this time (our twice-burned irrational exuberance was giving way to cautious optimism).

Well, it has now been over a month of smooth, satisfying operation, so we think it is safe to declare victory and launch this post. The project was everything I hoped it would be: a great bonding and learning experience for both of us. If you are a parent, I urge you to find a meaty project within your sphere of comfort (building PCs is not for everyone!) and go for it with your child. You'll both be glad you did.

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Appendix

Here is the final parts list:

Tough to Match Nature's Coding Prowess

My last post touched on how I have been tracking my development "progress" on FamZoo. On a somewhat related note, I was reminded today of how humbling the pace and scope of development can be in nature. No matter how many times I witness it (some would argue too many ;-), I always marvel at the process of cognitive development in young human beings. At the end of February, I posted a few drawings from the youngest member of the FamZoo fan club. Here's a representative sample:

Very cute, yet still very simple and crude.

He's been cranking out drawings of increasing detail and complexity since then, and here are a couple from within the last week:

It is fascinating to compare and contrast the illustrations (you can click on each to get a closer view). In just under two months, the level of sophistication has progressed by orders of magnitude. If only I could match that kind of progress in my FamZoo development efforts!

The human body is truly an amazing, humbling, and inspiring system.

Two Solid Sites for Internet Entrepreneurs; More FamZoo Art

Recently, I stumbled upon two excellent sites for Internet entrepreneurs:

• Ask the Wizard - a blog by Dick Costolo, founder of FeedBurner
• Startupping - an online community and set of resources for Internet entrepreneurs created by Mark Fletcher, founder of Bloglines (among other ventures).

I've been browsing the content and tracking the posts on these sites for the past couple of weeks and have found the material to be practical and well-written. It's a refreshing break from the Venture Capital blogs that I have been tracking for a while...

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A couple more pix from Mr. Q - the youngest FamZoo charter member:

The FamZoo Car

The FamZoo Tiger

Inspiration From the Youngest Member of the FamZoo Fan Club

While I have been furiously coding away, my youngest has been busily drawing up his own interpretations of FamZoo. He proudly presented me with the following:

I love them. Thank you Mr. Q! Very inspirational. Makes it all worthwhile.