Experiential Learning for Parents

Parenting is an art as much as a science.  What nurtures creativity and responsibility in one child may breed wanton disregard in another.  What is a great instructional tool one day is seen as useless and starts an argument the next.  And while there are many helpful and well documented methodologies for parenting, the best informed parent will make some mistakes – and learn from them.  As someone who has literally written the book on teaching kids about money (The Ultimate Parenting Map for Money Smart Kids – $10 including free shipping at www.brightleitz.com), I continue to learn from mistakes when I put theory into practice. 

One of the hard learned lessons for me as a parent is that every stage of life for kids brings new lessons for the children and for their parents.  The child who saved all her allowance as a grade schooler may have spent all her pay check within three days of every pay day as a teenager.  What can be learned from this is that phases in kids’ lives are temporary.  The outlook of the grade schooler isn’t lost, it’s just on vacation.  And the teenager will learn to pace her spending if her parents resist the temptation to either lecture her about budgeting or give her extra money.

Another lesson is that most operating procedures work best when well defined. Here’s an example.  This summer my family had multiple teenage drivers as well as my husband and me sharing cars.  In the past we pretty much had a one-driver-per-car ratio, so the rule had been that each teen driver paid for their own gas.  As we started playing musical chairs with car usage, I decided to generously allow the kids to use our gas card.  We had them pay for a few more things we generally pay for.  Feeling particularly kind, I’d often encourage the kids to get a soda at the gas station store. Hey, it’s summer!  Live it up! 

Then the gas card bill came in.  OMG!  The bill for the first month of summer was literally over four times the size of our average bill for that card.  None of the kids was around when I opened the bill, so no shouting or bloodshed ensued.  But the system changed immediately.  Of course, it wasn’t entirely their fault.  My card, my decision.  So defining things up front – and thinking through potential outcomes – can make for less painful learning for everyone.

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Picking A College

I’m fortunate to have intelligent friends.  This blog will have some guest postings from some of these folks.  Rob Reed is a financial planner in Ohio and also has experience working in academia.  In regard to understanding how to choose a college, I literally couldn’t say it better. 

WHICH COLLEGE?

 Parents spend more time thinking about how to pay for college than what kind of college their children should attend. Yet the kind of college students attend affects not only what parents pay but—much more important—their children’s educational experience and chances for success.

The issue is not how smart a child is but where a child has the best opportunity to succeed. The relationship between students and their professors is the basis for that success. Therefore, I classify colleges by what they pay professors to do.

NOTE: This list focuses on general education institutions offering undergraduate degrees. It excludes technical schools, military institutions and strictly sectarian schools.

At Community Colleges professors are hired and promoted based solely on their teaching. These schools are an excellent start for students who feel they need extra preparation or who are unsure about attending college. Community colleges are inexpensive and offer a solid grounding in college basics. They have small classes and highly personalized instruction.

These schools offer unique advantages. For example, if a student discovers he has little interest in a general college education, he can transfer directly into one of the school’s vocational programs. This training offers a solid preparation toward a well-paying career. If on the other hand a student discovers an aptitude for college-level academics, she can transfer to a four-year college or a state university and thereby save several years of higher tuition cost.

At Four-Year Colleges professors are hired and promoted based primarily on their teaching, though they are also expected to do research. These mid-sized schools (10,000–15,000 students), have mostly regional reputations and typically grant only undergraduate degrees. Most classes are small and taught by full-time faculty who are expected to personally mentor students.

These are good schools for students who are ready for college but have not settled on an interest area or who need personal attention from professors. There are many schools in this category and consequently there is much variation in quality and character. Tuition reflects this variation. Some strong Ohio colleges include Dennison, Kenyon, and Otterbein.

A university is a collection of colleges (humanities, medicine, law, etc.) under one banner.  At Large State Universities professors are hired and promoted based primarily on their research. These schools have a national reputation, student populations of 30,000 or more and boast a world-class faculty. Especially in the freshman and sophomore years however, your child will probably be taught by the professor’s graduate students. Indeed, typically at these schools there is minimal interaction between full-time faculty and undergraduate students.

Unlike smaller schools, university professors are so overloaded with research demands and responsibilities toward their graduate students that professors do not have the time to seek out undergraduates to mentor. While this sounds grim, engaged undergraduates with initiative can find professors who are genuinely interested in working with them. Students, however, must be assertive enough to seek out professors.

In essence, Large State Universities are the Wal-Marts of education: they offer a tremendous selection of courses at rock-bottom prices but there is little personal service unless the consumer (student) actively seeks it out. These schools offer the greatest educational opportunity for each tuition dollar but students must be able to take advantage of it.

Many Large State Universities have branch campuses throughout the state. These campuses offer the advantages of small class size, personalized professional instruction and often a more relaxed admission policy. Later transfer to the main campus is typically a straightforward process and, in any case, students receive the university’s diploma regardless of which campus they attend.

In Elite Institutions professors are paid and promoted based on outstanding teaching and research. These internationally known schools boast small classes taught by renowned scholars. This is the ‘best of both worlds’ and tuition reflects this fact. Admission is highly competitive but for many bright kids with strong high school records attendance is a life-altering experience. Attendance is a serious commitment though, both for the parent who pays the bills and for the student who strives to succeed in this high pressure environment.

For bright students who cannot afford or gain admission to an Elite Institution, the Honors Program at a Large State University is a cost effective alternative. These programs are essentially mini-Elite Institutions set inside a larger university. Professors actually compete to personally teach these students who often have their own classes, dorms and mentoring programs.

This is only a general overview. Within each college-type there are good and bad schools, better and worse bargains. This classification does not single out the “best” colleges; hopefully it helps you identify the type of college best for your child. 

Putting Your Money Where Your Mouth Is

People who have a passion manifest it in how they live their lives.  This manifestation often comes in the form of deeds rather than words.

 

An example is Scott Staub.  I don’t really know Scott – just sat next to him on a plane.  But we chatted during our flight and got to talking about what we both do for a living.  Scott is Vice President of Fund Development for EMQ Children & Family Services.  His employer advocates for children to put them with good families and reunite them with their own families when practical.  It’s hard not to be impressed that someone derives their livelihood from such work.  When we chatted, we got to talking about kids and money.  Scott doesn’t have kids, but he’s active as an uncle as well as with the son of a single mom who’s a friend of his.  It’s clear that he’s a wonderful role model for these kids.  When a nephew turned 14 recently, Scott’s gift was a promise of money to the nephew as well as a donation to a charity of the nephew’s choosing on the nephew’s behalf.  And the nephew would receive his share of the money after he’d identified his charity and discussed it with his Uncle Scott. 

 

So here’s a man who’s part of a positive financial force through his career for many more kids than most of us parents are ever able to touch.  His work will have a huge impact on the lives of kids who desperately need it.  Outside work, the kids he has a personal relationship with can see the value of working in a profession that makes a difference in people’s lives and they get experience in how to make a difference for others in the world who need it.  In my chat with him, he wasn’t boastful about his life or critical of how other people live their lives.  He’s just doing what he feels led to do. 

 

If you were gone from this earth tomorrow and someone who didn’t know you was settling your financial affairs, what would they be able to see about what’s important to you?  Would they see someone who loved to eat out, had a great wine collection, and went on some fabulous trips?  Or would they see someone who supported those in need and made a positive difference in the world?  What would those who knew you tell others?  Would they comment on how big your house was and tell stories about the business adversaries you brought to their knees?  Or would they tell how you were the first person to motivate them to research a non-profit so you could make a donation? 

When to Start Allowance

Parents want to know when the right time is to pay allowance.  It’s sort of like knowing when the right time is to get married or have kids.  It depends on the family and on the individual kids. 

 

For most kids, when they are aware that things cost money, they’re ready to have some money of their own.  And the right amount is usually about a dollar per week per year of age.  So a five year old could have as much as $5 per week.  The next step is crucial!  Don’t buy the child all of the discretionary purchases you have in the past.  It’s up to her to buy those things.  And define what it’s ok and not ok to buy.  So if she can buy candy, small toys, and stickers, tell her so.  If she’s not allowed to buy a puppy or a pocket knife, tell her that.  Leave the lines of communication open so she can ask if something is an approved purchase.  Don’t bail her out and don’t reimburse her for inappropriate purchases.  So if she buys a cheap little toy and it breaks within the week, don’t give her back the money.  If it’s truly faulty, you can take her to the store and help her get a refund, but you shouldn’t be “the store”.  If she buys a switchblade (not an approved purchase), her choices are to see if the store will take the item back and give her a refund, or you take the item and she doesn’t get a refund. 

 

For families that are struggling to make ends meet, giving money to the kids should be a rare or nonexistent occasion.  But the kids can still be learning about financial responsibility.  One way is to discuss some of the family finances.  For instance, if the grocery budget is on the agenda, have the kids help plan meals around coupons or sales in neighborhood grocery stores.  One way to let kids have a little money of their own in a sight family budget is to tell them they can have a portion of money they “find” for the family.  So if your teenager finds a way to save on the electric or water bill, he gets a quarter of that money back the first month the savings hit.  Your family still comes out ahead, he’s more financially aware, and he gets some money to spend as he wants – within what you allow.

 

Keep dialog open.  Let them talk about their money with you.  Be willing to talk with them about some of your financial situation.  It’s important to remember that there’s a difference between talking about money and lecturing or criticizing. 

 

Kids will make some mistakes with their money.  But it’s easier for them to learn from those mistakes now – while you’re feeding, clothing, and housing them – than when they’re on their own. 

 

There’s lots more on this issue and others to teach kids finance in The Ultimate Parenting Map to Money Smart Kids available at www.brightleitz.com . 

Holiday Financial Lessons for Kids

Too often the holidays are the time of year when any hope of financial discipline flies out the window.  You can change that and actually turn it into a teaching opportunity for you and your kids.  Here are a few tips.

Don’t let the kids expect to get everything they want.  Let them make a list and let them know they may get items on the list, but not everything there. 

When the kids are old enough, you can tell them what the gift budget is for them.  “Old enough” usually means that they know that Mom and Dad – not some mythical being – is the one who actually goes to the store, stands in line, and pulls out the checkbook at the register. 

Don’t forget those who are in need.  Kids of all ages should spend some time shopping for and delivering gifts to charities that distribute holiday gifts.  Your children should pick something they would love to have.  Them talk to them about how much the child who receives the gift will appreciate it.   (You can actually get a receipt from the charity and include it in your tax deductions, so everyone benefits!) 

Keep the holidays in perspective.  It will save you money and teach your kids more than just dollars and sense.