I’m a firm believer that there’s a strong correlation between the behavior of adults based on the habits and behaviors of their parents during their formative years.  This applies to everything from work either and scholastics to respect for others and interests.  So, why wouldn’t it apply to money?  That being said, I can at least look to some anecdotal accounts of people I know (and my own upbringing) for examples.

We were raised to be very frugal.  Granted, my mom worked odd jobs and my father didn’t make a ton of money, especially when we were younger.  So, a few memorable money-saving tactics I recall included the following:

• My parents always drove older cars.  Like REAL old.  Rust-old. As I grew older they got nicer used cars.  But they NEVER bought new.
• We never had the “in” thing, you know, chasing fads.  Parachute pants didn’t even get consideration. Cabbage Patch kids, Atari, all the stuff the other kids had, we didn’t bother getting.  As it turned out, most of it was just a fad that passed quickly, but when you chase fads, you pay a premium for a short-lived experience.
• We conserved utilities.  I remember taking a shower and after about 3 minutes, the banging on the wall from the kitchen would start.  It’s funny, the first time my then-fiance had stayed over my parents house for a holiday, she took a shower and they pulled the bang-on-the-wall move and she came like, “Seriously?  Is someone banging on the wall?”.  It was so foreign to her, but the norm in our house.  On top of conserving hot water, my dad used to get logs from new developments where they’d chop down lots on leave trees laying around.  He’d then split the wood and use it for our wood-burning stove.  And our bedrooms were still cold since the stove was in the basement.  This was life, but it was a good life as I recall.
• When I reached my teen years and especially in college, my dad gave me various books on finance and investing, including the usual Rich Dad Poor Dad, the Millionaire Next Door, and also a book on George Soros.

What I’m Doing for My Kids:

I’ve been fortunate enough to make more money than my parents made when I grew up, and I also married a woman who came from a family that didn’t have the same habits so it’s been a little give and take as far as how frugal we can agree to live.  It’s a decent mix that works for us, but we’re definitely more on the consumerism side than when I grew up.  That being said, I still want to instill the same sense of financial prudence and frugality in my kids.  As soon as they were born, I researched the best bank accounts available for kids and started routinely bringing them to the bank to deposit some money while saving some other for spending.  I showed them the interest accruing to get them interested in saving.  Aside from the banking experience, I’ve also sought to instill a bit of an entrepreneurial interest in the kids by teaching them about how business works, how they can create/sell things themselves for money (like pictures they drew, origami, etc) and I’ve explained to them why I’m a landlord and how that works as well.

What Money Lessons Do You Recall as a Kid and Which Ones were Most Helpful?

As a parent, especially early on, cash can be tight at times.  We’ve always been a bit paranoid about what might come our way and kept an emergency fund on hand, but many people can’t get there since it’s month to month or bad luck and unanticipated events keep coming their way.  Therefore, if you’re not in a position to build an emergency fund and you have an emergency come your way, here are a few ways to raise cash quickly:

• Massive Budget Cut – While this isn’t necessarily the same as a revenue inflow, the result is the same.  Have you considered how drastically you could cut your budget immediately if you needed to?  Could you cut $1000 out of your monthly budget today by eliminating all recurring expenses like gym memberships, newspapers, Netflix and things along those lines?  Probably not just on those categories, so next, is groceries, going out to eat, etc.  If you add up all the “discretionary” spending outside your bare necessities you may be able to come up with a nice sum in a jam.
• Sell Stuff – If a massive budget cut isn’t in the cards (perhaps you’re already there!), then there’s always the opportunity to raise cash selling stuff.  Garage sales can be moderately successful, but for scale and efficiency, online seems to be the best way to go.  Personally, I sell stuff on craigslist.com all the time and have used eBay sporadically.  Gold and silver prices are still high so perhaps there’s some old jewelry laying around or even things you never thought of selling but don’t mind parting with.  Go around the house and take inventory – maybe it will generate some ideas on stuff you could sell now if you’re not even in a jam!
• Loans - There are various loan options out there from a number of loan lenders such as peer to peer lending platforms or short term payday loans. Which option makes sense depends on many things ranging from how quickly you need the money to how quickly you think you can pay it back.

I was pretty annoyed by a recent 60 minutes “expose” on what they call redshirting, which evidently, refers to starting your child in Kindergarten a year later than they would normally be eligible.  They paint a portrait of these helicopter parents who are altering the flow of the timing of their child’s education to give (usually their sons) a leg up by starting a year later.  They go on to cite that especially for boys, starting school a year later conveys benefits ranging from being bigger than other boys in the class to doing better in sports to driving earlier in high school.

So, I’ll just say that I was born on Sep 1, which was the exact cutoff date so I was literally the youngest child in my entire grade.  In hindsight, I can’t say I ever really noticed a difference other than not being able to compete on the highschool baseball team.  Due to my birthday, I played Little League with kids n the grade below me and I killed.  But when I went to play highschool baseball, I was basically playing with kids 1 year ahead of me from a baseball cohort standpoint.  Not a big deal; school isn’t for baseball in my opinion.  Scholastically, I always did fine.

However, I’m an anecdote.  On a broader scale, there is plenty of evidence indicating that boys born in the summer are often much better off being held back a year.  They are often not as mature emotionally or scholastically compared to similarly aged girls.  Once these boys enter the system and start off at the bottom, they never recover.  They go through grade after grade at a substandard pace and end up graduating highschool as a C student or less.

We had one son that wasn’t ready when he turned 5 and we gave him an extra year.  My wife’s a teacher and it was abundantly clear that he wasn’t ready.  The pre-school teachers suggested this as well.  Aside from being born premature and having some health issues, there are still constant speech lessons and emotionally he’s just not there.  So, we held him. I never hear of parents regretting holding their kid back but I DO hear of parents regretting sending their kid early when they fail.

Are we bad parents? 60 Minutes would paint us as such.

This weekend was the annual pinewood derby race with the kids for Adventure Guides.  Lucky me, I have another car to build for my son for cub scouts in the coming weeks since he insists on doing both.  Anyway, this was the third year with Adventure Guides and our cars have been pretty bad in the past two years.  I felt bad and now that it’s third year (and his little brother has joined as well), I wanted the boys’ cars to do a little better.  Well, after talking to some of the dads who take this stuff pretty seriously and doing some trial and error, we were able to get both cars into the finals!  That was a first, so they made about top 12 out of 80 cars.  After having crappy cars and decent cars, here are a few tips and tricks to winning the pinewood derby that I can pass on:

Pinewood Derby Car Tips and Tricks

• I’ve found that the wheels matter much more than the aerodynamics of the car.  So, if you have to focus time and attention on one over the other, focus on the axles, wheels and whatnot and don’t stress if your car isn’t perfectly sanded or your son wants to put a Lego guy sticking out the top.
• Most of the winning cars end up being very thin and/or wedge-like.  They end up stacking on a ton of weights to make up for the wood they’ve chopped out.  I’m not sure why this matters, as mass is mass, but I suppose perhaps it’s more rigid that way since the wood is pretty flimsy and the weights are metal.
• I’ve found that winning cars tend to have the weights stuck toward the back of the car, as opposed to the front.  Again, I don’t why this matters, but they all swear by it and the winning cars tend to have that pattern.
• The wheels and axles!  This is huge.
• And this is a little tidbit you’re not going to get anywhere else!  I took a snapshot of all the winner’s circle cars just before the start of the finals.  You can get a look at the undersides of all the cars, designs, weight placements and perhaps look really cool in front of your son for coming up with an awesome design!  Enjoy!

The Winner's Circle!

Do You Have Any Pinewood Derby Racing Tips?

While the headlines portend doom and gloom in the housing market, the reality is, it might just be the right time for you to buy a home or refinance regardless of whether we see another slight decline in home prices or a flat market for years to come.  After all, who’s really buying a home these days for capital appreciation?  It just makes sense for people who are very confident that they will not need to move in the near-term and don’t want to keep paying a landlord’s bills for them.  Assuming you qualify from both a down payment and credit standpoint, there are many mortgage options out there and it can be confusing figuring out which one is right for you.  Very much depends on your personal situation, so using a calculator mortgage t provide you with options and monthly payments, you can make an informed decision.

• 30 Year Fixed – This is still the most common mortgage type in the US.  What I like about the 30-year mortgage is that you allow the present value of money to work for you.  You’re able to borrow money at an extremely low rate (low 4%) while inflation is around 3%, so you’re virtually borrowing money with no interest in terms of “real” dollars.  The only downside is that a lot can happen in 30 years.  You may eclipse into retirement or have to start paying for college for the kids, so that’s where the next one might make sense.

• 15 Year Fixed – This is another very common option, and given the shorter term, the interest rate is also lower (banks tend to view longer durations as higher risk, hence the higher interest rate.  You’ll always see this in the bond market as well, except for very low probability “inverted yield curve” situations leading into a Recession).  You can get a 15-year fixed for 4% or lower these days.  Many people like this option because it may coincide with retirement if they’re in their 30s or 40s or college payments.

• 5/1 Adjustable Rate Mortgage – This one’s a bit risky these days in that interest rates don’t have much lower to go – but have plenty of room to rise should inflation take hold.  So, you can probably get a very low rate for 5 years, but after that, the contracts are typically structured to allow up to 3 increases of 2% each once per year after the initial 5.  So, if you can’t refinance into a conventional loan down the road, you may well end up with a 10% mortgage rate.

Aside from the ones listed above, there are several others, as well as combinations of the above, but these are the primary ones buyers are entering into at the present.  Depending on which country you live in, there are other numerous types out there and tools to help, like this buy to let mortgages calculator for UK residents.Thankfully in the US, we’ve very much seen the demise of the “option ARM” mortgage which got so many people in trouble leading up to and during the housing collapse.  With those mortgage, people were able to start off with “teaser” payments that then reset into much higher payments (with interest!) after just a few years, causing many people to just walk away from their mortgages when they realized their mortgage amount owed actually INCREASED while their home values declined, leaving them with 6 figures in negative equity.

Well, here we are with another Halloween just around the corner.  Last year, my wife came up with the idea of dressing the whole family up in the Wizard of Oz theme.  We had a new baby girl, so she was Dorothy.  My wife was the witch (totally fitting).  I was the scarecrow and my boys were the tin man and lion.  It was pretty funny; we definitely have pictures from last year.  This year, we’re going with a bit more of a random theme.  After having 2 boys donning mummy and gremlin costumes in previous years, now with our girl, (and my wife’s Wizard of Oz dream out of the way) the attire is taking on a whole new direction.  My wife started taking inventory of what the other little girls in the neighborhood will be wearing for Halloween.  This year, there seems to be a trend toward fancy dress outfits.

Our one friend’s family is doing the retro thing and going with a 70s fancy dress theme for Halloween.  Another one is doing the roaring 20s.  In our house, we were kinda leaning toward a witch for our daughter, because that’s how she acts sometimes.  She’s only 2, but she’s real good at the “hee-hee-hee” expression.  So, torn on whether to go with the trend this year on fancy dress outfits or do our own thing – or whether it even matters.  The boys always seem so much easier – while even stranger.  Out of nowhere, my one son wants to be a warlock, which I’m not even sure if he knows what that means.  And even stranger, my other son is insistent on the Swamp Monster.  I don’t know what that is really, or where he got the idea, but that’s his dream costume for the year – the Swamp Monster.  So, he’ll be green with stuff hanging off him.  I think after last year’s getup, I’m off the hook for dressing up.  I’m sure by next year my wife will think up a family theme again though; until then, I’ll enjoy a Halloween in normal clothing.

What Are Your Kids Doing for Halloween This Year?

This summer, we finally gave in and let our son get a hermit crab at the shore while on vacation.  Each year, we found some excuse to disallow based on his age, his behavior or otherwise.  This year, he’s grown more mature and responsible and was a great kid during vacation, so we said fine.  It’s turned out well so far – he plays with them every day, feeds them, cleans them and he’s very compassionate toward his little buddies.  During casual conversation with some parents of kids in his class, we became aware of a rather bizarre and cruel practice IMO.

Apparently, all kinds of parents do the hermit crab thing each summer, and they do it EACH summer because come spring, there’s no more hermit crab in the house.  Where do the little critters go?  Well, these parents (and this is more than 1 family, and not in a coordinated fashion, so I don’t know where this bizarre ritual came from) wait until Christmas each year and go and put the crab out in the snow to freeze to death.  Aside from the fact that this is cruel and unnecessary, what kind of message is this sending to children?  It’s OK to torture a small critter to death?  So, it’s also OK to stomp a cat or light a dog on fire?  As kids grow up and engage in more reckless behavior, if they don’t have the right baseline on how to treat other people and animals, later in life, the swings in how they behave toward others grow wider and wider.  While I did a lot of stupid, risky stuff as a teenager, I never exhibited any form of animal cruelty, I wasn’t raised that way.

Even though they’re “just hermit crabs”, there were a pet.  It’s not like killing a spider; these were purchased domesticated pets that children cared for and played with and then were killed for no apparent reason – then purchased again to repeat the cycle.

Can anyone enlighten me on whether this Christmas ritual is an American tradition and where it came from?

And do you think this is acceptable?

At this time every year parents throughout America are all constantly hearing the same requests from their children ahead of the new school year.

Often, it is for new school items, such as bags, books and laptops or the latest designer trainers so they can make an impression come the new semester.

The cost of these items, especially during these difficult economic times, can mount up. On top of everyday living, it’s often a real stretch for most families.

If you find yourself in this situation, don’t despair! There is a middle ground where both you and your children can be happy. Firstly, it is a good idea to take stock of your financial situation.

With the hectic pace of everyday life, you may not have looked at your income and expenditure for a while. Use a mortgage calculator to help double check whether you can access a better rate of interest.

A mortgage calculator may help you free up other money to purchase much-needed items, such as new shoes or bags. However, don’t feel that you are obliged to buy the highest priced goods.

Children do not really understand the value of money, so the difference between a good and great pair of sneakers to them may be the money for the fuel bills for you.

Explain to them that there is a limited pot of money and that you have to purchase so many items. If they are older children, make it a challenge for them.

Getting them involved with the process can help them learn valuable life lessons, that you can’t always have everything you want all the time. This may help them avoid excessive debts in the future.

Allow them the choice to purchase the sneakers they want but ensure they know this will leave less for a good school bag. This will help them to understand how budgeting works.

Other ways of cutting back on school spending include taking advantage of special offers from retailers who offer deals such as 2 for 1 on clothing ranges.

If you have more than one child, this will be of valuable help. If you have one child, use this offer to buy items in the bigger size for the future.

Also, check the retailer’s website and local free papers for money-off vouchers. These coupons may only be for small amounts but these will add up and make great savings if you use them wherever you can.

You may even wish to join a coupon site, which gives details of all the promotions, discounts and money-off coupons that are available. Many parents have found these to be very worthwhile.

Additional ways to cut back on spending include swapping and recycling items within your network of family and friends who, rest assured, are facing the same issues as you!

You can reduce the back to school spending spree with some smart thinking around money and resources. Check your finances, use the mortgage calculator and help your children understand the value of money.

As the end of summer looms before us, countless parents across the country are struggling to obtain back to school supplies for their kids. When classroom supply lists are long and bank accounts are coming up short, buying your child’s back to school needs can be a problematic.

To stay within your back to school budget, create a school supply shopping list and don’t deviate from it.

Don’t succumb to impulse purchases; no matter if you find a great bargain on the clearance rack or your teen swears she absolutely needs the more expensive jeans. Stick to your guns.

If you can, shop earlier in the summer to spread the purchases out. You may not know all the classroom requirements ahead of time, but you know your child needs pencils, paper, pens, a notebook, etc.

Take advantage of any tax-free weekends. These generally occur toward the end of summer around the beginning of August. While not all areas participate, you want to shop during this weekend if yours does. Tax adds up.

Look for back to school coupons in your weekly newspaper or on store websites. You can print them out directly or use mobile coupons to save money.

Shop for trendy clothing at discount stores instead of department stores. Trends are always more expensive when they’re hot, but discount retail chains usually have their own versions and nobody will know the difference but you.

Take advantage of your neighborhood thrift store. Some consignment shops only accept gently used, like-new clothing, so get more for less money. You can also find backpacks and other items at thrift shops.

Look for online deals and shop from home. You can avoid the traffic and crowds by taking advantage of online store sales. Most offer free shipping around back to school time and you could end up saving as much as 25% compared to shopping the brick and mortar store.

Keep those supplies simple. It may be cooler to carry a zip-up notebook with hidden pockets to school, but a standard three-ring notebook will be significantly cheaper. The same goes for generic-looking notebooks and pencils. Never pay more for a design or brand name if you can have something just as functional for half the price.

f you’re still pressed for cash, shop with a credit card. Keep the balance under your budget to avoid racking up the debt.

For those with less-than-perfect credit, consider applying for bad credit credit cards. Almost anyone can qualify and even bad credit credit cards make buying back to school supplies easier on your wallet.

If you have more than one child, take them shopping separately. It’s easier to keep track of purchases without a crowd and it gives you a better chance to spend some quality one-on-one time.

Don’t forget to reuse any leftover supplies from last year, or any second-hand supplies from an older brother or sister.

You can even ask friends and family for leftovers or make exchanges to help everyone save money.

If you need to buy new back to school clothes, hold off doing so until after school starts and the Labor Day weekend sales begin.

Our 7 year old was finally released from the hospital today after a bout with viral meningitis.  There are stark differences between the bacterial type and viral one.  Bacterial is more rare but often deadly.  The viral type can be caused by any number of initial viral infections.  So, today when his spinal tap revealed no presence of bacteria, it was clear to them that it must have been viral.  He’s running fevers still as well, which indicates viral since a bacterial infection would be expected to see fevers decline with continued IV antibiotics.

How To Know If Your Child Has Meningitis

Kids get fevers all the time, so it’s tough sorting out why they have a fever and whether it’s a cause for concern.  In our case, our son was complaining of a sore neck.  This is a tell-tale sign, especially in children.  Immediately, my wife brought him in to be checked out and they confirmed he had the symptoms of meningitis, which is a swelling of the meninges which is the sack surrounding the brain.  Often times, with bacterial meningitis, a child can be brain damaged or killed within a day, so it’s critically important to spot meningitis quickly.  In the case of viral meningitis, there isn’t really much they can do since viruses don’t respond to any existing treatments.

Another sign pointing toward viral meningitis for our case was the fact that our other children had coxsackie flu the week prior.  Even though our 7 year old showed no symptoms, upon researching further, we read that “enteroviruses” like coxsackie flu often result in viral meningitis later.

So, he’s home, we’re glad.