Teaching Children The Value Of Money

Teaching How To Save

I am often asked how to teach the value of money to children. There are many ways but one of my favorites is the “envelope” method.  T. Harv Eker teaches something similar to it in his book Secrets of the Millionaire Mind.  But John Nordlander, CEO of Cambiare Group, offers this great example that he used to teach his children the value of money.  When he first told me about it during an interview, I loved it so much that I wanted to share it with you:

Inger Johnson: So what is an envelope system?

John Nordlander: Well, the envelope system [started out with the use of] three envelopes [with my children].

Inger Johnson: Three envelopes, okay.

John Nordlander: Three envelopes; the first envelope was, let’s say for example, every dollar we would cut into three pieces.

Inger Johnson: Okay.

John Nordlander: And the first piece was what you can spend, the second what you need to save, and the third what you need to give.  In other words we tried to instill in them early on a sense of philanthropy or giving, giving back.  And so at that time we used three envelopes.  Now as they got older we increased the number of envelopes.

Inger Johnson: Okay, to….

John Nordlander: well, we would increase it to clothes, cars. That’s how we kind of taught budgeting, which is the old fashioned simple; okay I’ve got TV, I’ve got my public service, I’ve got food, I’ve got car., I’ve got gas, I’ve got rent, etc, etc that we moved on into as adults, at least that’s kind of the way I was taught.

Inger Johnson: So you would give them fair allowance and put the allowances in different envelopes and say, here you are.

John Nordlander: No it was their responsibility to define those amounts.  We didn’t tell them what the amounts had to be.

Inger Johnson: So how did they do that?  They had some kind of guidance?

John Nordlander: Well we kind of taught based on [our] values. What we tried to get them to understand was you’re saving now for spending later.  And yeah you want this for spending, but we wanted them to understand that savings at their age was better than spending, although, by the way, you can take from your savings to spend if you need to, if it’s valid.

Inger Johnson: And how was it validated?

John Nordlander: Well depending upon the size, we add in. My son wanted a 10-speed bike and he had saved and saved to get the 10-speed bike and what was happening is he had a tendency of spending everything from the spending envelope almost instantly.

Inger Johnson: Of course.

John Nordlander: Yeah, it’s gone and so I said ‘alright, if you cut back even some more on your spending, you’ll get to your bike quicker.’  And we would use carrots, we’d always keep the carrot out there in front of them and I would make a deal with them.  Okay, if you can get to a certain level, I’ll help you to where you can get, where you need to go.’ There was never half.  It was always like ¾. We just really thought that the earlier that they can learn that you just don’t get everything in life that you want, but you can get the things you’d like if you work at it and if you save.  And then all of us have, here’s the bonus, there’s that unexpected money that comes to us, our gifts.  Somebody gives us a gift and so we try to help them understand that life does have other aspects.  It’s not all work.

What methods have you used to teach your children the value of money?

Creating An e-Book for Passive Income

eBooks

Last December I had the pleasure of interviewing EJ Thornton, publisher and author of Secrets To Creating Passive Income.  As part of a segment I covered with her, How To Create Passive Income Strings, EJ shared with my listeners how to create an eBook.  I was surprised at how easy it really is, thinking that doing such a task could be monumental.  Not true!  Here is what EJ had to share:

EJ Thornton:

The way that the E-book business is going, Kindle, Amazon’s Kindle has just completely monopolized the marketplace.  Now, to start, you want to create several articles down a path.  It only takes 10 or 12 of those articles with a certain theme to create a small e-book.

Inger Johnson:

You were saying the Kindle is actually the number one best selling item.

EJ Thornton:

This past Black Friday and Cyber Monday, it was published that [the Kindle] was the number one [selling] item.  So, Christmas morning, everybody unwraped these Kindles and went out and looked for Kindle books to read.  This is the year [for e-books].  It’s really, really fun.

But, even just ten articles, you can collect and combine those into a small Kindle e-book.  Sell that for $2.99 on Kindle.  Kindle pays publishers a 70 percent royalty.  That’s 7-0, 70 percent royalty.

Inger Johnson:

That’s a lot.

EJ Thornton:

That’s huge.  So, for that $3 book, which is your 10 articles, you’ll make $2 dollars for every $3 dollars that Amazon sells.

Inger Johnson:

I can hear people saying, “Yeah, $2 dollars, big whoop.”  Okay.  So, you sell 100 a month.

EJ Thornton:

What would you have to do in your job to get an extra $200 dollars a month?

Inger Johnson:

Exactly.

EJ Thornton:

It’s very, very easy to do that way.  Once you’ve gotten a collection of 10 articles, do it, then, do it again, and then, do it again.  Usually, if somebody is well versed down a certain niche, or certainly, if you have a practice, a chiropractor could come up with a dozen articles quickly and do it again and do it again and do it again and he could end up with a series of E-books.  After a series of three or four E-books like that, just based on articles, or problems, or even case studies, you could throw that into a physical book.  It would probably be about 150-page book, at that point and just very easy to put together.

You don’t have to sit down and think, “I got to write my magnum opus right now.”

Have you written an e-book, how easy was it for you to put together?  How did you choose your subject?  What did you do to market your book?

Protecting Our Children From Cyber Predators

Protecting Our Children From Cyber Predators

It’s all over the news, children falling victim to cyber-bulling or experimenting with “sexting”.  To monitor all aspects of a child’s interaction on the web can prove exhausting and even then, you’ll most likely miss things that you didn’t know to look out for.

Fortunately, there are software and applications available to help parents monitor their child’s interaction on the Internet.  This Wednesday I will be discussing this topic of monitoring our children’s interaction with the Internet on my radio show Let’s Talk Dollars With Sense.  I will also introduce a software tool that parents can use to protect and manage their children’s privacy and reputation while at the same time “teach and reinforce healthy online and mobile phone habits”.

Be sure to tune in Wednesday, March 2nd!  Meanwhile, here is a video for you to view on this topic.

So, the Allowance Is No Longer Enough?

As kids get older, their needs change and they may feel that an allowance isn’t enough money and they would like to earn some additional money.  Also, one day, your child will need to earn a living.  Kids can get an edge on the work world by starting early and in doing so they will gain valuable experience working with different people, learning about managing money, have some money to spend once they get older, and/or save for college.

At this point, you child is ready for a job.  Sometimes this transition into the “job” phase of life runs smoothly.  However, often there are some bumps along the road.

I gained some insight into this life-stage in a recent radio interview I did with Doug Root, the owner of Jungle Quest.  Since 1988, first through the YMCA and later through Jungle Quest, Doug has processed thousands of teenage job applications and has hired many, many teenagers.  I’m going to share with you some of his words of wisdom.

Kids:  Why do you want to work?  The answer better not be, “because I need the money or because my parents want me to.”

Parents:  You are not responsible for getting your child a job.  Now, I know you want your kid to get a job.  But that doesn’t mean your kid is motivated to get a job.

So, parents.  How do you make sure your kid really wants a job?  Again, let me say, YOU are not responsible for getting your child a job.  I don’t care how much you want your child to want to get a job.  Unless, they are motivated, they won’t get one and, if they do, it won’t be for long.

The answer:  Dry up familial resources.

Here’s an example. if I’m a kid and I’m 16 years old and I’m getting a $20 a week allowance, what do I need a job for?  If I get a ride to the movies every time I want one, what do I need a job for?  If I get a clothes allowance, what do I need a job for?

So, we’re back in the trap of, well, just pretend to apply for jobs and then mom will yell at me and then, I’ll apply for a job and then, I’ll tell her that I probably got a job, and then, I’ll get another 10 days of not having to mess with it.

Parents… here is what you do.  You basically share their pain.  It’s a lesson out of tough love.  You dry up familial resources.  So, you could say, “starting in 30 days, when you want a ride to the mall, you’re going to have to pay for the gas.”  “In 60 days, we’re going to cut your allowance because now you’re 16 or 17.  Well, “How can I get any money?”  “Well, get a job.”

Another way to add motivation to your teenager is to  offer to give them the allowance back once they have a job.

Let’s say they get $10 bucks a week as an allowance.  Well, come a month from now, no more allowance.  But, if you get a job and your paychecks are $30 dollars, then, I’ll give you your $10 allowance.

So, dry up the allowance.  You can give it back once they get a job.

I’m going to highlight something here.  There are two very different things:

1)    Looking for a job

2)    Getting a job.

A teenager ought to be able to get a job in a month…at the most two months.

Now, its might not be a great job.  In fact it might be a lousy job.  But, that can create motivation too…

All in all, the stage in life when it is time for your teenager to get a job can be trying.  The quicker they get motivated to do it, once they are ready, will make your life and theirs so much more enjoyable.  To hear more insights, click here to listen to the archive of this show.

Have you had experience with this subject?  I’d love you to share it with me.

When My “Why” Left Home…

My life-time goal is to always be the best mom I can possibly be to my son.  I know many of us parents feel the same way.  My son is everything to me.  He is my “why” in life.  I think one of the hardest things for a parent is to have their child transition into adult life and leave home.  This is such an emotionally charged time for us.  Recently, Nora A’Bell of the Crankset Group came on my show.  And she gave me a new and novel insight into this… and I absolutely LOVE what she said; so I thought I’d share it with you today.

Inger Johnson: So, your daughter Julia was a freshman and sophomore in college. At that time, were you thinking about when she’d leave home?

Nora Abell: You know, no.  You don’t really think about it like that way.  I had a really hard time as you’ll be able to tell, with the transition because, first of all,  Nobody really talked about it and I had no idea what the different stages were.  It occurs to me that it is something like building a business.

When you’re building a business, you don’t ever say to yourself that one day that business is going to grow up and run without you needing to be there all the time.   Even so, the business can still be a part of your life and serve you or be a blessing to you. That’s what it felt like with Julia.  You don’t think of the time they are going to move out of your home.  And then, all of a sudden, it’s their Senior year and they’re ready to go.  They feel like they’re all ready, “Hey, you know, Mom, I’m 18, I can do what I want.”

Inger Johnson: You know, I love the way you put that because again, I love business, and business is part of finance and I grew up in the finance world.  But, one of the things you think when you start your own business is “I’m always going to be a part of that business.”  I have to be in the know and I’ve got to be in there cranking and making chairs.  I’ve got to be doing that because that’s what I enjoy and nobody can do it better than I can.

But, at some point, you have to let that business go and let it grow… And just like with a business, we have to let our children grow, and mature, and take on their own life…their own wings.  It is important not to consider this stage in life as moving away from the pain.  Instead, it is moving toward a future that has some resemblance of me in it.

Click here to hear more about transitioning your kid to “adulthood”.  What has your experience been?  What is your advice to parents entering this phase?

STILL DON’T HAVE A JOB?

Networking

Last year I interviewed Aimee Cohen of Cohen Career Consulting and she was telling me how often she hears “I don’t know why I don’t have a job”.  She then followed up wit some great advice.  Here is what she said:

Aimee Cohen:

I cannot tell you how many times clients come to me and they say, “well I don’t know why I don’t have a job? I’m on that computer 12 to 14 hours a day”. And whereas the computer and the internet a fantastic resource to research companies, find job openings, getting on Linkedin and connect with other people, it’s still only has a 4 to 6 percent success rate as far as actually securing an actual position.

Inger Johnson:

Say that again, because that’s important.

Aimee Cohen:

Okay, so the internet with all the major job boards [like] Monster, Ladders all of those fantastic resources [listing]  job openings. But when you do apply, it is like sending your resume often to a black hole in cyber space. And it only has a 4 to 6 percent success rate versus the number one job search strategy, which is networking. Networking is 75 to 80 percent successful, 90 percent if you’re an executive.

So that old saying, “It’s not what you know but who you know” proves to be true according to Aimee’s experiences.

Click on Prepping For The Career Move to hear Aimee on this subject.  Have you been unemployed a long time before landing a job?  What method did you use to turn things around that proved helpful to you in finally landing that new position?

EARNING CASH NOW

Earning Cash Now

“I need work.  What is the best MLM I can get into to get cash now?”

This was a question one of my listeners asked on my show Let’s Talk Dollars With Sense.  I was interviewing Lorin and Dixie Ricker, talk show hosts and Pre-Paid Legal Associates, on the topic of multi-level marketing.  My quick response on the show was this:

“MLMs should not be looked at as a “get rich quick” scheme.  MLMs are, however, great opportunities for people that are looking to supplement their income, are looking to learn about owning their own business or want to build their personal sphere of influence.”

Looking back, I realize that MLM businesses have the tendency to give some people the perception that buying into that business will afford you the opportunity of making a ton of money fast.  I want to explore this thought further.

People’s successes in the MLM business happen for a variety of reasons.  We’ve all heard stories of people joining a business and making thousands of dollars in three months or less, right?  What most people don’t hear is the story behind that success.   That person may have previously owned a business and have already built a large contact list to sell to.  That person may have had prior experience in building websites and utilizing search engine optimization and understands how to drive traffic to his website to increase sales.  Or maybe that successful person already had a background in marketing and was able to create a successful marketing plan that propelled them into making money.  Dixie brought up another reason for success:

Dixie Ricker:

I think that the success depends on the person.

Inger Johnson:

It really depends on the person.  You’ve got to research all of [your options] and see what you’re passionate about.

Dixie Ricker:

And is there a need in the market place for that particular MLM?  If you’re looking at the nutraceuticals, any of them, you’ll be competing with local stores with your vitamins, your make-up or your juices.  You’ll want to take that into consideration too.  Who is your competition?

Click here to listen to the audio of the show.  So how you make money in a network marketing business is going to depend on you.  There are services such as RI Training that you can turn to that will guide you to MLM success.  They provide you with education and tools you’ll need to help you build a strong and profitable business.  These services can be invaluable for the rest of us that may not have previous experience owning a business or are already successful salesman or marketers.

Are you successful in a network marketing business?  I’d love to hear how you made your business success, who helped you, what training did you receive or what experience did you have under your wing that helped you grow your business?

Consequence Of Changing Major In College

Recently, a good friend and I were chatting and she was telling me about her brother who was a “career student”.  It reminded me of an interview with had with Jeff Morand, founder of JP Morand & Company back in May 2010.

Our discussion was “everything college” which led to the topic of students changing majors mid way through college.  USA Today covered this topic as there is a growing trend of incoming freshman graduating after five to six years instead of four.

According to Jeff, a member of the National Institute Certification College planners, students can spend as much as $15,000 or more on top of their full tuition as a result of changing their majors mid way through their college years.

Here is what Jeff had to say:

“Often students, young people don’t know what they want to do when they grow up.  They don’t know what they ultimately want to become.  Changing majors is certainly okay but yet if we go back to that last piece of the College Planning Wheel, how they pay for it if we know we’re falling into that 5^th year or worse, you have that 6^th year, how expensive that is.

So continuing for a Masters like you have or continuing for other advanced degrees is common but yet, what we’re referring to with these statistics and what USA Today is referring to with these statistics is the plain, old simple not completing that 120 four years worth of study within that four year allotted time.  They change majors, change schools in certain cases and then all of a sudden, you’ve added that extra year or two onto the equation.”

Jeff then shared this advice:

“The best way to plan for college is to start early certainly.  When I say early, ninth-grade, tenth-grade is a great time to start.  But start even earlier from the standpoint of getting a flavor or an idea of who your child is.

Getting an idea of what their likes, dislikes, finding out certainly in the high school grades, whether they’re people persons or things persons, whether they like things or people, and that’s a distinctive difference.”

Click JMorand2010 to hear the interview.  Have you changed your major while in college?  How did you plan for the extra expense? What other ideas might you have to prevent from being that “career student” and spending more on college than already anticipated?   I’d love to hear your story.

Passive Income Ideas

Passive Income

Recently I had the pleasure of interviewing EJ Thornton, publisher and author of Secrets To Creating Passive Income.  I’ve known EJ for a year now and she never ceases to amaze me.  Every time I talk to her I learn more and more about creating passive income.  During the interview, EJ shared some examples of how to create passive income.  So, of course, I want to share one strategy that I thought was brilliant!  Here is an excerpt from the interview:

EJ Thornton:

In [my book] Secrets to Creating Passive Income, the main example that I use is a thing we call Spock Boxes.  That came from a single problem that my husband had, John.  Every time he saw a car top carrier, he would comment that it was aerodynamically mounted backwards.  The sleek end was in the front and the big blunt end is in the back and that aerodynamically is just wrong.  You need the blunt end in the front so that the air streams back down off the point.  It’s much more aerodynamically efficient.  Every time he’s see one, which is several times, every time we’d go out and he would talk about it.  I said finally, “Honey, if I give you a platform, will you be quiet?”  He said, “Okay.”

So, he wrote up about a three-paragraph argument about why he thinks Spock Boxes should be turned around.  He calls them Spock Boxes because they look like the box that Spock was buried in, in Star Trek 2 and was shot out into space.

Inger Johnson:

That’s a great description

EJ Thornton:

So we looked on amazon.com and low and behold they sold them.  We put his article in the middle of this web page and several links into amazon.com to find out more about Spock Boxes.  We called this page Fuel Efficient, How to make your car top carrier more fuel efficient, got a ton of hits right off the bat and, of course, they would read the article there and, whether they believed it was irrelevant or not, they would click on in Amazon.  If they bought a car top carrier, which is a several hundred dollar ticket item, we would make 7 percent commission off of them.

We didn’t have to make that product or even sell that product, we just had to facilitate that customer going into Amazon through our web site.  They came in because they found our article.  All it was, was three-paragraphs! Anybody can write three paragraphs and move forward.

Inger Johnson:

That’s awesome.

EJ Thornton:

Now, when I saw how successful that was, I thought, that’s pretty duplicatable.  Now, we have more than, I think, 90 websites, or so, each dedicated to a specific niche.

I wanted to share this with you because it’s the simplest of ideas that can reap big rewards.  EJ reveals that “Everybody has the raw material to create product with their experience, or dream….it just takes a single idea.  They say ideas are God’s gold coin and just to flush out an idea is really pretty simple.  You need to brainstorm and then, go forward and figure out what you want to actually accomplish with a certain message.”

EJ shared with me a few other ideas, which I will share with you again at another time.  Meanwhile, you can check out her book, Creating Passive Income, here or you can listen to the audio interview Passive Income.

What ideas have you had and acted on to pull in passive income?

A Post Christmas message from Santa

A Post Christmas Message From Santa

Earlier this year I got to sit with Santa and talk about this year’s holiday.  We talked about everything ~ fun things that I never knew about Santa like how he got started, to other things like creating ornaments for the Christmas tree.  As we talked more about the holidays, we dually noted how most families do not fully prepare for Christmas.

Santa gave me a message that I’m about to share with you right now.  And really, when I think about it, it’s really a message we’ve all probably heard before but one that we need to hear a few times over before it starts to sink in.  Santa’s message is to begin thinking ahead for Christmas so that we don’t get ourselves in a bind. He sees the stress that the Christmas holiday causes us adults and to our finances.

So, this prompted me to do a little research and I came across this great article posted on About.com titled “Set Your Holiday Budget Early and Save for Christmas: Start a Christmas savings fund and avoid holiday debt”.  You can read it here.  My favorite is setting up a separate holiday fund.

Click the link to hear Santa’s message, 01 Meaning of Christmas 1.   What other ways have you been able to keep stress down and save for the holidays?