Some parents provide their children with pocket money to teach them its value, to be responsible and develop important skills such as learning to budget and save.

Teaching Children to Save

Teach your child to save part of their pocket money each week. For young children a piggy bank is a fun idea or for older ones, a bank account. Learning to save for purchases teaches the basics of life - the need to save for things.

Parent’s examples and decisions are also an excellent teaching aid. If you’re always spending, children will automatically to do the same.

Young children do not realise the financial commitments you have and these need to be explained. Shop with your children - let them know why you decided not to buy a certain item that tempted you. Explain that after considering having to pay for the groceries, rent or mortgage and petrol, there was not enough spare money left. You have taught them the valuable lesson of budgeting and delaying self gratification.

Talk with your children about advertisements on the TV and in the junk mail. Teach them the purpose of advertisements - to get you to spend money. Reason with them that they can’t always have everything they see.

How much Pocket Money?

Some psychologists suggest $1 per year of age but this is excessive for large families or low income earners unless you expect your child to pay for certain things.

Teenagers are often paid an allowance by parents but are expected to pay for their bus fares, clothes, toiletries, mobile phones and entertainment for example, teaching them financial skills. Their spending needs to be monitored by the parents and when they overspend let them know you’re not always going to bail them out - therefore teaching them very valuable lessons.

When your child is old enough, open a bank account and encourage goals to save up for something. Kids in their late teens may want to save for a car.

In a Nutshell

Many young people have no concept of money or very low financial skills with debt becoming more prevalent amongst them.

Ultimately it’s the parent’s responsibility to teach children the most important skills in life - the value of money.

About the Author
Jennifer Steenland is the Director & Manager of Savings Mart, a money savings tips website for Australia, providing Bargains, Discounts, Cheap Holidays in Australia, Eating Out in Australia, Affordable Accommodation and much more. Find out more at www.savings.mart.com.au

Making a habit of budgeting money (and time) is a great idea because both are resources that are generally limited. As my father realized, it is prudent to carefully manage resources that are limited. Furthermore, it is wise to emulate winning strategies.

A budget is a success tool. It is also a money plan and a measuring tool. Ideally, it tells us where our money is coming from and when it is coming in. It also tells us where our money is going and when. Corporations use budgets. So do governments. And so do individuals who are serious about success. In fact, they all insist on using them.
  
Budgets are a part of a structure for success. Budgets help us achieve goals and dreams by informing us at any moment in time whether our chosen earning and allocation actions are moving us closer or further from our goals and dreams. Budgets also aid in anticipating, avoiding and eliminating problems and inefficiencies.
  
Budgets offer other benefits: (1) they encourage and focus thinking; (2) they give purpose to actions; and (3) they create organization and control.   
  
Budgeting is fun when we realize it helps us create and engineer success. Budgeting is fun when we realize it puts us in the drivers seat and creates control. And budgeting is really fun when we achieve a goal or a dream and gain confidence that we can duplicate that success.
  
The ability of everyone - regardless of income – to use a budget makes it a fantastic tool. Anyone who likes to win and is willing to pay the price to win can create a budget. All anyone needs to develop his or her budget is a pencil, paper and a desire to get what they want. Because most people do not use budgets, those who do create an advantage for themselves.
  
If the term budget turns your stomach, then think game plan, strategy, list or journal.
  
How do we teach kids to budget? (1) The absolute best way to encourage kids to budget is to budget yourself. There is no getting around it. Setting a strong example is an incalculable gift to children and speaks volumes about what we truly believe (as opposed to what we say). (2) Start with small steps. Begin by encouraging your children to develop either a daily or a weekly budget or spending journal. Using pencil and paper, an excel spreadsheet or specialized software have your kids list their sources of income and anticipated expenditures. (3) Review and discuss their entries with them. Be sure their expense entries include saving, investing, sharing and any specific goals they have in addition to regular expenses. Ideally, saving, investing, sharing and other personal goals should be at the top of their respective lists. This will help reinforce that these activities are priorities. (4) At the end of the day or week have your kids list their actual” income and expenditures. Compare and discuss the differences with them. (5) Repeat the process.
  
Like adults, kids love games and incentives. So periodically, consider giving your kids special rewards or matching bonuses for exceptional performance. The idea here is not to be overly rigid or stress perfection, but to introduce kids to a tool that will set them up for success.
  
Sam X Renick is the author of two financial books for children: Its a Habit, Sammy Rabbit! and Will Sammy Ride the Worlds First Space Coaster?; he also produced the music CD titled Get in the Habit!; and is the founder of The Its a Habit! Company, Inc., (www.itsahabit.com), a socially conscious corporation dedicated to providing parents and educators with wholesome, entertaining and educational tools that help them encourage children to develop good habits, especially saving money.
 

It’s difficult to just stop using credit cards because we live in a credit society. Therefore, it’s important to learn self-discipline and good spending habits to take advantage of the convenience of credit cards.

Limit yourself to just one credit card, preferably one that accumulates points that can be turned in for merchandise or cash like the Chase Rewards Card, or a cash back card like the Discover Card. One credit card and a bank debit card should do you very nicely.

Record your charges in a memo book because there’s no written running balance as in a checkbook. It’s easy to lose track of how much you’re spending. That goes for both credit and debit cards.

 Spend no more than 20% of your monthly take-home income on consumer debt. (This is a general guideline. Low incomes should allow a lower percentage.) This includes car loans, credit cards, time payments of any kind for things like furniture, electronics, etc. If your monthly payments for debt exceed that amount, you’re headed for trouble.

Use savings as an alternative to credit cards. Save to establish an emergency fund equal to at least six months’ income. Use this money instead of a credit card in an emergency. Pay the money back as you would a bill.

Know your goals and budget accordingly. If you’re dying for that 42″ flat panel hi-def TV, put it in your budget and save up for it. Then pay for it in cash or, if you want to accumulate points or get money back on your credit card, go ahead an use the card but be sure and pay for the TV in full with what you’ve saved when the statement comes in.

Happy Savings,

Candee Lynn Wilson
www.101WaysToSaveMoney.com
www.SaveMoneyOnAutoInsurance.com
www.Save-Money-On-Groceries.com

Save Money On Gas

Now that we have explained what a REIT is, the rest of the article will highlight three reasons why you might want to invest in a REIT.

Firstly, owning units in a REIT allows us to gain rental exposure to large commercial buildings. Let’s face it most of us real estate investors do no have the financial ability to own large commercial buildings so sometimes it will be good to purchase units of a real estate investment trust so that we can participate in the upswing in office rental of a commercial building.

Secondly, owning units in a REIT because of its trust like structure allows for a tax flow through of the profits (this means no tax on profits from the REIT). If in doubt, spend some time consulting your tax attorney for advice on this. Another way to get some tax knowledge is to ask for a copy of the prospectus of the REIT and read the section on tax advice.

Thirdly, listed REITs are tradable like shares so you can do the normal things that you would do with shares. The advantage of this is that you can examine the usual commercial rental data to determine whether rentals are going up or not and when you should purchase the units in the REIT. Always remember the importance of value investing especially so in an investment involving real estate. Spend time researching on the REIT that you are interested and figure out the value that you think it is worth and wait for the unit price to drop and swop in to make your purchase.

In conclusion, we have gone through the basic concepts of how real estate investment trusts work and highlighted three reasons why you might want to invest in a real estate investment trust (REIT). Remember that like with all investments, do your due diligence, time your entry and exit properly and you can make money both from the equity value and the rental yield of the underlying properties.

About the Author

Joel Teo runs a real estate investing information website. Learn more about real estate investing today by visiting our real estate investment success series

Believe it or not, although real estate may be tanking in many areas of the country, commercial real estate is holding up quite well. REIT’s that invest in commercial real estate ventures are ahead of the market.

 Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnAutoInsurance.com

We all know that January has its white sales — linens, towels, etc. Furniture is usually on sale in January as well. Good buys on seasonal clothing is found at the end of the their season. Each month brings new categories of items on sale.

Consumer Reports has put together a shopping calendar that covers every month of the year. It is a general guide, and with the economy slowing as it is, more and more merchants will be putting things on sale more often. So always check your newspaper and direct mail flyers for bargains when you might not expect them.

As always, remember to ask yourself two questions before any purchase.

1. Do I want it? (If you only want it, you shouldn’t be buying it if you’re trying to save money.)

2. Do I need it? (If you need it, only buy it if you can afford to pay cash for it.)

Happy Savings,

Candee Lynn Wilson
The Saving Lady
www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnAutoInsurance.com

I guess the primary question becomes, “Do you need to refinance?” By need, I mean is there a pressing financial situation. If not, there probably is no “need” to refinance. If, however, it is a matter of saving money — and it has to be a significant amount of money — that’s another story altogether.  But even saving money doesn’t necessarily justify a refinance.

Here is what one person wrote about the benefits refinancing:

Saving on interest

If you refinance your residential mortgage loan to a lower rate, you can save thousands of dollars on interest alone. If you have a high rate, you can refinance to a lower rate. If you have an adjustable rate mortgage (ARM), you can refinance to a fixed rate. Changing your terms so that you pay less in interest is one of the most basic ways that people can save money on their home loans. Additionally, in most cases, the interest from your residential mortgage loan refinance is tax-deductible, meaning that you save money when it comes to paying Uncle Sam as well.

When you refinance to save interest, there are a number of things you need to consider.
    1. How long will you be in the house? If you only plan to live in it less than 3 years, it probably won’t pay to refinance.
    2. How many years do you have remaining on your mortgage? If you’ve been paying on your mortgage for 12 - 15 years, be careful. At 15 years is when your equity really starts to build. So unless you refinance to a 15-year mortgage with a lower interest rate and you plan to be in the home at least 3 more years, refinancing may not be a good idea. 

Many financial experts suggest that unless you can shave 1-1/2 - 2 percentage points off your interest rate, refinancing doesn’t pay because the cost to refinance is to high.

Getting a shorter term

One thing you can do to save quite a bit of money in the long run is to refinance your residential mortgage loan and change the term length so that it is shorter. The shorter the loan term, the less you pay in interest. You will, however, likely pay more money each month on your payment, since you are not spreading the loan payments out over 30 years. Many people, however, find thats a small price to pay to save thousands by refinancing their mortgages to be paid off in 15 years.

Money in your pocket

If you refinance your residential mortgage loan to a lower rate, you will probably find that you have a lower monthly payment. This can be very beneficial in that it frees up some money each month for you to use on other things. So, not only do you save thousands in interest over the course of many years, but you also experience more money in your pocket in the here and now.

Getting rid of debt

If you have too much debt for an unsecured loan consolidation, you can still get a debt consolidation loan if you refinance your residential mortgage loan. Most people, when they refinance, have enough equity that after the old mortgage is paid off with the refi, there is money left over to pay off the bills and try to be in great shape.

This is one of the poorest excuses for refinancing your mortgage. Time has shown that most people who are heavily in debt due to overspending do not change they’re spending habits and continue to build up new debt after paying off the old.

Sometime, however, things happen that are beyond our control. A job loss is one such circumstance. Many times, the equity in your home can carry you through rough times. This doesn’t mean you’re a spendthrift. Most people in this situation bounce back and put themselves on track as soon as they are employed again. Unfortunately, it’s almost impossible anymore to refinance without a job.

So, if you’re thinking about refinancing, do stop to consider the financial aspects of the move. Loan officers are starving today, so they will find a dozen reasons why you should refinance. They are looking out for their own welfare — not yours.

 Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.SaveMoneyOnAutoInsurance.com
www.Save-Money-On-Groceries.com

Today’s article compliments of:

Visit Refinance Smarts to find more information about a Residential Mortgage Refinance Loan.

Forget 7-Eleven or Subway. Take advantage of lifestyle trends. We have an aging population that hungers for services and a working population that is crunched for time. Travel and home healthcare services appeal to the older generation, while lawn care and residential cleaning services can be marketed to working singles or couples.

If being your own boss floats your boat, two of the best sites for franchise listings and information are www.FranchiseOpportunities.com and www.franchising.com .

Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnAutoInsurance.com

If you had a credit score of 680, you were considered a good risk for a conventional mortgage with the lowest interest rate. Today, your credit score needs to be above 720 in order to avoid additional fees that lenders are adding to their loans in the form of higher interest rates. And even a high score doesn’t guarantee that you will get the best rate. The location of the home you want to buy, the amount of your down payment, the total amount you own on credit are only a few of the underwriting criteria being scrutinized by lenders.

Because of the growing number of criteria that a lender uses to assess risk, interest rates will vary more greatly from mortgage broker to mortgage broker and from bank to bank. You will need to invest much more time  shopping for a mortgage than in the past.

So if a new home is in your immediate future, you might want to get your credit house in order first. Start by getting a copy of your credit report from all three credit bureaus. The middle score of the three is what lenders use to qualify you as a borrower. If this score is below 720, you might want to think about ways to boost your middle score. CnnMoney offers  some credit boosting tips.

With home prices falling in many markets across the country, now is a very good time to buy. First-time buyers or second-home buyers are sitting in a catbird seat because they don’t have a home to sell and can bargain for the best price. You’re in luck also if you’re being transferred by your employer that offers a home buy-out  as part of the relocation package. If you have a home to sell, you may have to wait awhile.

In any case, always get your mortgage lined up before ever looking or a new home. There’s nothing worse that making an offer on a home only to discover that you don’t qualify for a loan.

 Happy Savings,

Candee Lynn Wilson
The Saving Lady

www.101WaysToSaveMoney.com
www.SaveMoneyOnAutoInsurance.com
www.Save-Money-On-Groceries.com

There are more than 285 target-date funds to choose from that now hold more than $180 billion in assets. Just seven years ago there were only 31 funds with $7.8 billion in assets. And their popularity will continue to grow since the US Dept. of Labor has deemed the investment category an appropriate default option for employers who automatically enroll employees in a 401 (k) plan.

Not only must you choose a target-fund whose investment risk suits your personal toleance level, but you need to choose a target date that corresponds to your plans and needs. For example, most people in their 50’s who are planning to work another 10 - 15 years might select a 2020 fund. But if you have a pension or other big source of income that you plan to draw on first, you might choose a 2025 or even a 2030 fund. This allows the fund to be more aggressive for a longer period of time before you start drawing on the assets.  You also might want to buy more than one target-date fund to prolong the growth of the funds so that they don’t go conservative on you all at the same time.

Three popular target-fund choices are Fidelity Freedom 2020 (FFFDX), T. Rowe Price Retirement 2020 (TRRBX) and Vanguard Target Retirement 2020 (VTWNX).

Click here to find out more about target date funds and if they’re right for you.

Happy Savings,

Candee Lynn Wilson
The Saving Lady
www.101WaysToSaveMoney.com
www.Save-Money-On-Groceries.com
www.SaveMoneyOnAutoInsurance.com

The par value of a bond refers to the returns on your investment once the bond matures. It is the amount of money that you will receive at the maturity date. In other words, when buying a bond, it is important to note that you will be receiving your entire investment plus interest only at the maturity date. This is the bond’s par value.

Naturally, the maturity date refers to the date that your bond reaches its full value. This is the date that you receive all the returns of your investment. However, when purchasing corporate, state and local government bonds, you do not need to wait until the maturity date before you obtain the money back. Such bonds can be ‘called’ before they reach the maturity date. When the bond is called, the corporation or government issuing the bond will return your investment as well as any interest your bond has earned up to that point in time. However, federal bonds are unable to be ‘called’.

The coupon rate refers to the interest rate. This determines the amount of money that you will receive when the bond matures. This is specified as a percentage. For example, a bond with a $1000 par value with a coupon rate of 10% will earn an annual interest of $100 until the bond matures. Similarly, a bond with a $2000 par value and a coupon rate of 5% will also earn an annual interest of $100 until the bond matures. This is important to note as the different bond value means a different initial investment, even though the annual interest is the same.

However, many people still do not understand how to purchase a bond. This is because bonds are not sold by banks, but rather by the government. This makes things slightly more confusing for most people. However, there are two ways of buying a bond.

The first way, is to go to a broker or a brokerage firm. The broker is able to make the purchase from the government on your behalf. However, you are likely to be charged a commission fee. Shopping around for the lowest commission fee is prudent if you want to use a broker.

On the other hand, you can purchase bonds directly from the govnerment. This process, although more troublesome is not nearly as difficult as it used to be. With the introduction of the program called Treasury Direct, all your bonds can be purchased and held in one single account that you have easy access to. If you choose to buy directly from the government, you can avoid using a broker and thus saving on the commission.

By Ryan Ginster

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