Bank On Yourself Round-Up for Week of May 25, 2011

Here are summaries of four of the most interesting and thought-provoking items that have crossed my desk this week…roundup

Is a “look out below” stock market crash looming?

By some key measures it is – corporate profits have only commanded as large a share of national income twice before – in 1929 and 2006, and those years preceded the past century’s two worst  financial collapses.

Knowledge is power, so I encourage you to read this article on The Invisible Stock Bubble1 from SmartMoney.com.

Want to eliminate market risk from your financial plan?

It’s easier to do than you might think. Find out more about an asset class that has increased in value every single year for over 160 years.

Pamela Yellen interviewed on NPR:  Teach teens how to manage money

[Read more…]

Mission Not Impossible: You Can Teach Teens Financial Responsibility

Executive Summary: While teens can be hard to reach, the teenage years are the perfect time to teach kids the saving, spending, earning and investing habits they’ll require to enjoy a lifetime free of financial strain and worry.

teenager withdrawing moneyThese days, money in and money out is mostly electronic, meaning the speed at which our children must make the right or wrong financial decisions has accelerated.  Launch your teens’ money management education by explaining to them why most adults fail.

Let children know that the solution can be found in the proven strategies of fiscal self-reliance that are embodied in the Bank on Yourself system and help your teens create their own vision of a secure and rewarding financial future.

There are plenty of practical steps you can take to make the entire subject matter more interesting to teens. By Pamela Yellen and Dean Rotbart

Russ Bragg has a higher financial IQ than most parents. He started out as a credit analyst for an international bank and began offering comprehensive financial planning services in 2000.  He is an expert at helping clients define and then achieve financial independence.
Teenager saving
For Bragg, you might imagine, educating his teenage son and daughter about proper money management would be a no-brainer.

If, on the other hand, you have teens of your own, you already know better

Enticed by credit card solicitations with low interest rate come-ons, Bragg’s independent-minded son was in credit counseling by the time he was 18.  Bragg’s daughter, on the other hand, while still a student, applied for and received a prestige credit line that even some of Bragg’s agency clients are unable to qualify for.

“Same mother, same father, same food, same air” and two very different outcomes, observes Bragg wryly of his children’s money management styles.

Many otherwise more-than-adequate moms and dads – those who’ve mastered subject matter as sensitive as teenage smoking, drinking, and drugs – have found their skill sets sorely lacking when it comes to the topic of money.

Welcome to Survivor: Teen Money…

A sprawling multi-year marathon and obstacle course that pits a tribe of well-intentioned parents, grandparents and other adults against the strong-willed, often perplexing sensibilities of the untamed adolescent mind. The challenge? One of modern family life’s most difficult: teaching teens to handle money responsibly.

I remember writing once that as a society we are more comfortable talking about sex and those other issues than we are about money”

[Read more…]

7 Steps To Set Your Teens On a Lifelong Path to Financial Success

Here is a list of 7 steps that you can use to help prepare your teens to be financially successful and responsible adults.  Feel free to adapt these suggestions to your individual family dynamics.

teenager mowing lawn

To truly value money, teens need to
earn their own income

1. Start Bank on Yourself policies for your teens (if you have not already) and/or help them purchase their own policy.  You can get a referral to a specially trained Bank On Yourself Authorized Advisor who will work closely with you to customize a plan that’s designed specifically for your family.

2. Share details of your own Bank on Yourself policies with your children and review both your and their policies every six-months.  Show them how you are utilizing your policies to predictably retain and grow more of your own money without paying interest or exorbitant fees to banks, brokerage firms and others.

3. Expose your teens to your full family financial picture – including what you earn, what you spend, what you borrow, and how you invest and save.  You may wish to have your children participate by writing checks, reconciling accounts and helping to set and monitor your family budget.

4. Put your kids to work. To truly value money, teens need to earn their own income, whether through outside jobs, entrepreneurial ventures or by getting paid for family chores.

5. Don’t forget charity.  Encourage your kids to set aside a regular portion of their earnings and income for a good cause, be it church or other worthy nonprofits.  Such gifting will be returned to them many times over in terms of the character it builds.

6. Paint a vibrant picture of your adolescent’s fiscal future – one free from the money worries that envelop so many young adults and their parents.  Help teens formulate their own vision of what a life of financial self-reliance and freedom will mean for them.

7. Allow kids to make mistakes and even fail when it comes to managing their own finances.  Few adults get it right the very first time, either. Remember, we all learn a great deal from our mistakes.

©  2011 – Hayward-Yellen 100 Ltd Partnership