Bloggy Business Today

A lot has changed when you talk about family finances. These days, you have to be wise for each penny spent. And along with that comes the change in lifestyle, consumer buying antics and of course manner of living. In short, the situation that most families find themselves right now is totally different compared to how the economy was a couple of years ago.

Most of these things were not inherited by choice. The whole world is suffering from these turn of events and while many try hard to defy the downpour of economic gloom, the task just becomes harder to go by. Financial management is something that has made its way towards families whereas it was something we heard of before for companies and businesses trying to compete in the business world. Without financial management, people find themselves walking on the walls of possibly facing debt issues, something that has pulled down even the wealthiest people due to the wrong approach in forecasting and managing their financial obligations.

But if there is one thing that many families should also consider is that they are not alone. The whole world has to step back for now, try and take each day as it comes. There is no sense in spending and investing if the opportunity is not promising. If before the stakes were 50-50, today the odds seem to favor failure and potential losses. You can just look at businesses who have tried the wait-and-see option. Most of them have faltered and found themselves in bleak holes.

Sacrificing lifestyle choices is not something to be ashamed of. Pride and luxuries can wait and will always be there. It is just the time where families have to embrace the idea that life is getting harder for all of us. There is no easy option out although the name of the game at the moment is surviving and making sure security of living is covered. This is no longer a time where we can take it easy because if that were the case, then perhaps a lot of us may not be worried about the cloudy future we see beyond us.

Everything around us is depreciating. We may be diminishing as far as lifestyle values are concerned but so is the rest of the world. It is practically a chain reaction and something we cannot stop from happening. The only thing left right now is looking out for ourselves and our families and see if we can make it through these hard times of crisis.

It will not be easy sailing but once all of this is over, most of us may be surprised at how we were able to weather the storm and come out what is deemed as the worst economic crisis ever to hit the human race. Patience and wise decision-making is what we can do for now and hopefully the whole world can pull through.

This is basically a post aimed at the younger generations to start wising up with the financial management in their everyday chores. The current situation we are in right now is perfect to show them how hard life is and if they are not wise in managing their finances, they may as well find themselves scampering for financial aids and burdened with debt in the process.

“Youngsters have no real concept of where money comes from and many college-age children can’t even balance a checkbook. While students continually learn and relearn American history, few are educated about its financial systems. With these severe limitations, it is important that parents start early in teaching their children the basics of financial literacy”

Here are some financial tips for parents:

1. Lean to say “no.” There is no need for you to buy your children everything they want. If you do, they will never learn the value of a dollar. If you need an excuse, tell them that your financial advisor advised against the expenditure. It’s hard to argue with an outside advisor.
2. Cash, not credit. According to the 2007 Charles Schwab Teens & Money survey, one teen in three (33%) would prefer buying things with a credit card than cash. This represents a 61% increase over last year (18%). In a world that hypes credit cards on TV and makes getting credit sound easy, it is often difficult for parents to teach their children that “cash is king.” Teach your children that if they don’t have the money for it right now, then they can’t really afford it. Teach them the value of paying off the full credit card balance each month so as not to accrue high monthly fees.
3. Make them work for it. If your children get an allowance it shouldn’t be just because they exist, it should be for their contribution to the household. Explain the differences between household chores that are routinely expected of them, like clearing the table and making their beds, and services for which they can expect to be paid, such as bathing the dog or helping their sibling with homework.
4. Refrigerator finance. In her book, It’s All About The $Money, Honey!, Ms. Woods advises to let your children know what paid-for chores they have been assigned for that week and what the monetary value is for each one. Then, post the list of chores on the refrigerator and let your child check off each chore as it is accomplished.
5. Cash, please. Pay your children immediately for their work in one dollar bills placed in their “pay envelope.” They will value the lesson of actually counting out the dollars they earned.
6. Open a savings account. Try to make savings fun for your children. Each time they deposit either birthday money or allowance, show them their statement and explain how they are accruing monthly interest. By making the process interactive your children will feel like they have more responsibility, which will make savings more fun and appealing.
7. The rule of 3. Once your children are paid, now it is your responsibility to educate them on how to divvy up the proceeds. It is important to teach them the “rule of 3″ — first they give 10% to charity, then they should save 10% in a savings account and what’s left over, they spend. It’s a powerful life lesson.
8. Enter the stock market. It’s never too early to learn about the stock market. What’s their favorite company? By virtue of their lifestyle children are already familiar with some of the biggest and most successful companies on Wall Street. How about McDonald’s, Apple or Nike? On each birthday, buy your children one share of their favorite stock and check the prices monthly so they will see how their investments are doing.
9. Encourage part-time summer jobs. Taking that first step into the job market can be scary, but with a little parental guidance, it could be the first step towards financial freedom for your children. A part-time job will not only help your children learn the value of money, it prepares them for understanding the real financial world. They will learn that Uncle Sam is their partner and that FICA is more than just a silly acronym.
10. Learn the basics. Since most of our school systems do not teach financial literacy, it is up to us to go elsewhere to learn the basics. The www.themint.org is packed with fun financial literacy activities, games, challenges, quizzes and tests for students and teens, tips for parents, and entertaining programs and lesson plans for teachers. The Internet and library provide great teaching tools; you can find helpful information on financial web sites such as www.finance.yahoo.com and www.money.cnn.com/pf as well as books such as It’s All About The $Money, Honey!, available at www.Amazon.com .

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