The Financial Life Skills Blog for Families by Nancy Phillips

Teens and Money: I Am 13, Saving For A Jeep Wrangler At 17!

Posted by Nancy Phillips on Sun, Jul 31, 2016

 

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Today's exciting post is by Natasha, age 13, who is enthusiastically saving for her first car. Do you have teens in your house saving for a car or another big purchase? If so, please share your stories below. It's helpful for them to know there are other people out there the same age working hard towards their goals.

Enjoy the post!

 

 by Natasha JH:

"One of the most important steps to buying your first car is to start saving as young as you possibly can. You also need to plan on how you can cut back on non-essential items – wants.

I didn’t start with any savings, but I have been saving 25% of my allowance since last year and now I have $300. I will be volunteering and working more in the coming years with the hopes that my volunteering will help me find some great opportunities while I’m helping out.

I will be honest, it’ hard not spending my money on things like clothes, makeup and sweets. One tip that has really helped me save is to automatically take 25% of my allowance or any other money I get and put it in a separate jar - and now a bank account. This way the temptation is gone as I consider that money untouchable – I want my Jeep!

My dream car is a white four door Jeep Wrangler. My mom took me for a test drive in one last month. I’m so excited to drive it somedayJeep_image.jpg myself.

I am definitely going to buy a car that is two to three years old because it costs so much less and can be just like new. I will research to find the best price offered. I have done some quick calculations on how long will it take me to get the car. It will depend on how much can I save each month. Here is what I noted down:

If I save $100 a month and the Jeep I want is $25,000, it will take me 20.8 years. Yikes, that’s too long! My goal is to buy it when I’m seventeen.

If I save an average of $750 a month (I’ll be working a lot in the summers!) it will take me 2.8 years. That’s more like it, I can do that!

If I'm saving as much as I can and I'm working 4-5 days a week, that's $100 - $150 savings and four weeks a month which will be $400 - $600 per month. Take that times twelve months and I will save $4,800 - $7,200 per year. In three years I'll have between $14,400 and $21,800 just from my savings from work. 

It all depends on the hours I'm working and the place and hourly wage. Don't forget if you're a waitress you get tips on top of your pay and that can really add up! 

If I get unexpected money for my Birthday or Christmas, I’ll try to save it for my Jeep instead of just going out and having a shopping spree.

The best thing is to plan. If you work hard at whatever you do, cut down on spending and find as many extra ways to make money, you can reach your goal."

 

 

 

5 Money BRULES (Bulls**t Rules) Parents Pass on to Their Kids

Posted by Nancy Phillips on Thu, Jun 09, 2016

400_pxls_np_0559_whitecropx22efa3a8.jpgI was really excited when the Mindvalley team as me to write this article. It was a very thought provoking, interesting experience, and brought in many aspects of the research I have been doing the last eight years. I hope you find the information beneficial to your life.

What is a BRULE? Coined by Vishen Lakhiani, founder of Mindvalley and author of Code of the Extraordinary Mind.  His definition is: "A Brule is a bulls**t rule that society adopts to simplify its understanding of the world."  Problem is, sometimes the simplification gives us the wrong beliefs. Research has shown money beliefs and attitudes are created during the formative years of childhood and developed by the age of seven. Conscious awareness of these programmed beliefs is critical to identifying the BRULES we have around money. Only then can we change what isn’t working for us in our current situation.

  1. It’s rude to talk about money, it’s private: A belief still common in many families today; this programming has been passed on from generations past. Unfortunately though, if we don’t discuss financial life skills with our kids in today’s world, it puts them at a real disadvantage because they are growing up in a much more complex situation than when we were young. Money is spent much more quickly and with less emotion due to technology. Kids only have the information they observe each day and may not interpret everything correctly - or the way parents would want.
  1. You can’t be wealthy and spiritual: Underlying message, “we’re not supposed to want or have money if we’re spiritual, we’re bad if we desire it.” Money is a magnifier of whoever you are, be it spiritual or not. If you have clear values and good intentions, financial well-being will allow you to do more good in the world, be more generous. The opposite is true as well for someone who is self-serving. Struggling financially month to month doesn’t typically allow a person to fully develop and share their talents and passions. That’s not doing any individual or society any good, regardless of their spiritual beliefs.

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  1. Wealthy people are greedy, deceiving, dishonest (fill in the blank): Underlying message, “they’re bad if they have a lot of money.” This can come from a position of “we’re an honest hard-working family and we’re not rich, therefore people who are rich must be dishonest and care only about money.” This is a powerful BRULE important to be aware of. Anything you negate and deeply believe is “wrong” or “bad” will not allow you to acquire it and feel good in the long-term. This BRULE can cause people to literally push financial success and life happiness away.
  1. Money is the route of all evil: Underlying message, money is bad, dirty, destructive. This is one of the most common BRULES passed on through the generations and one of the most commonly misquoted verses in our society. The correct statement is, “ for the love of money is a root of all kinds of evil.” Money is currency, it isn’t inherently good or bad, it only has the emotional value of what we place on it. However people can, and have done, evil deeds because of a controlling desire for money.
  1. It’s their fault if they are poor: A self-focused and destructive belief system based on a superiority complex, this BRULE prevents positive societal change. No one really knows the challenges other people live through, the subconscious programming they have from childhood or the social and economic circumstances they have come out of. Gratitude for what you have and respect for another human beings’ journey is of utmost importance if we are all to learn the financial and life success skills we need to achieve our own unique and individual potential.

*Bonus * Money doesn’t make you happy. Just work hard, it doesn’t matter of you make much money, at least you’ll be a good honest worker: This BRULE can combine two beliefs; “having a lot of money won’t make you happy and you aren’t meant to enjoy your work, you are meant to work hard to earn your money and forget about having fun.” In reality money is needed to survive and thrive, and while money alone won’t normally make a person happy in the long-term, people don’t have to choose between wealth and happiness. In today’s world more and more people are destroying this BRULE by doing work they love and achieving great success financially while creating a very meaningful life. Passion and purpose fuels and motivates - thus providing the foundation for the perseverance necessary to achieve the big goals and dreams we are capable of.

What BRULES have had the biggest impact on your life?

Nancy Phillips, BSc., MBA. Creator of the Zela Wela Way - accredited kids, teens and parents financial life skills resources. http://www.zelawelakids.com

 

The Zela Wela Way

Creating a life of meaning and financial well-being

Tags: kids and money, Vishen Lakhiani, parents and money, BRULES

GISS It: Financial Life Skills for Our Children

Posted by Nancy Phillips on Sun, May 15, 2016

400_pxls_np_0559_whitecropx22efa3a8.jpgThe fantastic team at the Real Estate Investment Network (REIN) asked me to write about the importance of teaching our youth financial life skills. They are all about sharing knowledge and education, and this is definitely a topic I'm passionate about! I hope you enjoy it.

 

As parents, we are automatic educators, and we want our children to learn the skills they’ll need to thrive and reach their full potential in life. This is true for parents around the world. With the financial industry and global culture changing as rapidly as they are today, it’s easy to see that our children need guidance; current, effective, honest information, that has their best interest and future well-being at heart.

 

The Lessons Must Have These Key Elements

These core financial life lessons must involve a combination of information, beginning with inspirational and motivational messages, so children understand how the information can affect their individual lives. The messages must also be simple, and effective – so the lessons are implemented and become habit. Beneficial learning only occurs if the new information is implemented, thus creating positive decision-making skills and behaviour.

Why Financial Life Skills Must be Taught at Home and at School

Financial and life success lessons need to occur both at school and at home. Why? Because ... (read entire article)

The Code of the Extraordinary Mind: 10 Unconventional Laws to Redefine Your Life & Succeed on Your Own Terms by Vishen Lakhiani – Book Review by Nancy Phillips

Posted by Nancy Phillips on Mon, May 09, 2016

 

400_pxls_np_0559_whitecropx22efa3a8.jpgI have to say I was pretty excited when the Mindvalley team contacted me to write this book review, and when I saw the title I couldn’t wait to get my hands on it! For those of you who know my work, I’m extremely passionate about learning the intricacies of the mind, and how we use it to positively impact our life. I literally had just finished reading Super Brain by Deepak Chopra when the email arrived.

The author of The Code of the Extraordinary Mind, Vishen Lakhiani, is the founder of Mindvalley. His company is a virtual education platform now teaching over 500,000 students and 1.5 million fans the things school never did about happiness, success, effective goal setting – you get the idea.

I knew Vishen did incredible work. I had watched many of his presentations online and am a big fan of the Philosophers Notes book summaries I learned about through Mindvalley.com. This is Vishen’s first book but I had high expectations and wasn’t disappointed. The Code of the Extraordinary Mind expanded my knowledge and inspired many new and big ideas, which is exactly what I was looking for.

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The content is divided into four main parts. The first two addresses our “culturescape,” how we are shaped by the world around us, and the “awakening,” or how we can choose our version of the world. These sections really dive into why we think and do what we do, even if it doesn’t make sense. He discusses the importance of challenging our beliefs in order to really live an extraordinary life. Thankfully Vishen also goes into detail about how to enhance and optimize our “systems for living” after becoming aware of what is and isn’t serving our best interests and happiness.

The third and fourth sections then beautifully explain the platform through which to define and live your own extraordinary life, along with numerous thought provoking examples. These are the sections that go deep into providing action steps as to how to experience what I would call personal enlightenment, overall happiness and awareness through enhancing the meaning in our lives - and how best we can personally contribute to the world now and in the future.

It’s hard to choose my favorite part; the content was very rich. I would have to say Vishen was very successful in providing that feeling of “you can do anything you dream of. Define it and here’s how...” I greatly appreciate this as a parent, and because it’s what I am passionate about sharing when talking to kids and teens in my presentations. I love to hear messages that will be helpful in inspiring people to have the courage to go after their biggest visions, along with tools that will help provide the framework to take those essential, challenging first steps and beyond.

A couple of my favorite segments are: the three most important questions, the profound act of not attaching your current happiness to the completion of your goals, and how the kensho and satori moments of your life propel your personal growth (you’ll have to read it to find out).

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This book will positively affect the life of anyone who takes the time to read it and implement some or all of the activities into their daily life. I would love to see The Code of the Extraordinary Mind be required reading for high school seniors and first year college/university students. Imagine what our world would look like if all people had access to the knowledge and framework of how to successfully pursue inner happiness, and achieve their full potential in life. That’s what The Code of the Extraordinary Mind helps provide.

 

 

 

Thank you for the commitment that went into creating this book Vishen, I have no doubt you will achieve your goal of impacting a billion lives.

Nancy Phillips, creator of the Zela Wela Way financial and life success resources for kids, teens and parents.

Buy The Code of the Extraordinary Mind: 10 Unconventional Laws to Redefine Your Life & Succeed on Your Own TermsHere

* I do not receive any commission or monies for the sale of this book

Why It's Critical to Teach Your Children Financial Life Skills and 3 Tips to Get Started

Posted by Nancy Phillips on Sat, Apr 23, 2016

400_pxls_np_0559_whitecropx22efa3a8.jpgIt's the weekend and I'm excited! Excited to celebrate my kids, time off together, good weather and being grateful for it all. But that's not what we're here to discuss right now. I thought of how I am feeling because I was also very excited when the great team at the Real Estate Investment Network asked me to write this blog.

This is an extremely important topic for parents. I hope you find it valuable,

Nancy

Today’s world is moving faster than ever, and that includes the exchange of money. How often do you make financial decisions per day, 10, 20, 30 times? Whether it’s the decision to buy organic food, new sports equipment for the kids, or gas for the car, financial decisions are a huge and fundamental part of our everyday life. Would it help if our kids had some guidance on how to make all those little decisions effectively, so they can create a solid financial future? You bet; there is an epidemic of adult children staying in their parents’ homes or moving back home because read more

Teaching My Kids the Value of Real Estate Investing through GISS, By Mai Lee

Posted by Nancy Phillips on Thu, Apr 07, 2016

 

400_pxls_NP_0559_whitecropx22EFA3A8-1.jpgThis is a guest post by Mai Lee, a real estate investor in Calgary, Alberta, Canada . We recently met when I was speaking at the Western REIN (Real Estate Investment Network) All Generations event in Edmonton, Canada. I immediately wanted to capture and share Mai's enthusiasm for teaching her children financial life skills – including  the value of real estate investing! Mai's twitter handle is @yyc4rent.  

I hope you enjoy it.


 

What was the trigger that got you started teaching your children financial life skills?

As immigrants to Canada, my loving family had very little and taught me two lessons about money; one was purposeful, the other, more valuable, was unintended. Lesson #1: go to University, work/save, get a good job, work/save, buy a house, work/save and pay it off in 25 years. Lesson #2: my mom invested money into a university fund that matched her contributions and paid for my first year at university. This taught me that I can work hard physically for money, like my parents, but also, that I can make money work even harder for me.

How did you start and at what age?

Today, Gabriella is 9 and Atticus is 7. A year ago, an allowance through chore cards were given for helping around the house. The first goal was to fill the chart so that they could “cash out” their cards for money (the most popular choice) or choose to save it. Since they understood “work” involved an exchange of physical labour and time, the value of saving money and making it work for them through compound interest was taught: 

Allowance Chore Cards                                                          Compound Interest Staircase

allowance_chart2.jpg compoud_interest_22.jpg

 

By not “cashing out” their cards, 1 compound interest card worth 25 cents was earned weekly. Next week, the 25 cents had been compounded to 50 cents, so long as the cards were not “cashed out.” I sped up the process to show how they made money without engaging in a physical task. Their compound interest is arranged in a staircase shape so each step is added weekly. I slowly phased out their “allowance” but still maintained the expectation to help out around the house.

What is working for you?

As a real estate investor, I am a proud a member of the Real Estate Investment Network (REIN) and through REIN, attended Nancy Phillips’ Zela Wela Kids’ financial literacy event and was introduced to the GISS (give, invest, save, spend) method. Using the money the kids received for the Chinese New Year, I visited the bank for different coin and dollar combinations to help them divide up their money:

Gabriella's GISS bank  - Give, Invest, Save, Spend

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Forging ahead with the concept of teaching my kids to make money work hard for them, I had an idea to meaningfully teach real estate investing at their level. Using an old advent Kinder Egg Christmas calendar shaped as a house, the kids used the “I” part of GISS - invest - to buy their first rental property:

Atticus' Investment House

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Their GISS investment funds was their down payment to “purchase” their rental property. All 24 doors were labeled with “January Rent 2016”, “February Rent 2016”, etc. “Rent” is collected from “tenants” on the 1st of the month (I simply give the kids one loonie to tape inside the compartments):

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Notice that the doors start off small but eventually get larger on the bottom and are purposely named to teach the concept that:

  • 24 doors = a 2-year mortgage term.
  • The rent collected by the tenant is used to pay down the mortgage.
  • As a mortgage pay down progresses to a bigger door, the kids will receive a tooney (then $3, etc.) as more principal vs. interest is paid down.
  • When the last door in December 2017 is reached, the tenants will have paid the mortgage. Now the house is owned free and clear. As a positive cash-flowing asset, all the initial down payment from GISS has been paid off, resulting in an infinite rate of return on their money.
  • As they get older, we can potentially discuss:
    • Growing the portfolio: refinancing the property to pull a 75% loan-to-value to purchase additional rental properties
    • Attracting Joint Venture partners - consider joint venturing with mommy or daddy for a 50% capital buy out and use the funds as seed capital to purchase additional house(s)
    • Simply let the house continue to earn money to fund their purchases, such as toy stuffies and Pokemon cards.
  • Future points is budgeting for items such as vacancies, repairs for costly items such as a roof replacement, getting the kids to help write the rental ads, discuss how a property appreciates in value, consider different asset classes such as multifamily, and so on.

I feel it has been very successful so far because it is a tangible and age-appropriate way to teach my kids about real estate investing.

What do you hope to achieve? Goals for important life lessons?

I hope to teach my children to value real estate investing because I know it will create a future in which they will be comfortable, have everything they need and be confident that their real estate investments will fund a life that they can architect on their own terms.

What are some of the most inspiring and rewarding things you seen your children do or say? What is it you want to share with other parents?

When visiting their aunt who recently purchased a house, my 7 year-old son asked, “Auntie Anra, how much are your property taxes?” To which she replied, “That is a very good question, Atticus. I don’t think I even know!” Overall, what surprises me most is my children understand that they can grow their money with real estate and have internalized that they can work for money, but it is much more fun to make it work for them!

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Wow, what an incredible lesson from Mai on her use of the GISS method with Atticus and Gabriella - as well as an intro course on the value of mortgage paydown in real estate investing! Thank you for all your work putting this blog post together Mai.

The key takeaway here is the importance for kids and teens to learn that money is used for more than just spending. The GISS method teaches the concept of dividing income into different categories: giving, investing saving and spending  - and the value of each in the long-term. It will significantly impact your child's financial well-being and overall happiness as adults if they learn to manage their money effectively.

Are you using the GISS method or something similar? Please feel free to post your comments or share your stories.

For more information on resources which teach the GISS method for kids and teens, click here. The Zela Wela Kids Build a Bank story book and The Teen Steps to Success activity guide both highlight the GISS methods and provide information to teach your kids and teens during everyday life.



 

New Parent Resource: Help Your Teens Learn the Financial Life Skills They Need Now

Posted by Nancy Phillips on Tue, Nov 03, 2015


 I just became the mother of a teen last Thursday, wow. What happened to daily tutu dances and palm tree ponytails decorating the top of her head?

Just kidding, I’ve actually really enjoyed all the various ages and stages - and really tried to take them all in. But time really does "fly by."

 The reality of it is, and it's hard to believe, but there are now only a handful of years before she’s going to be an adult living an independent life. Will she be ready? It’s a question I think most parents ask themselves time and time again, and some parents are really concerned given today’s changing environment for teens.

  You Are The Most Important Financial Teacher Your Child Will Ever Have

  Eight years ago when I started my research to find out what my kids would need to learn about financial life skills to survive and thrive in today’s world, I learned some really interesting facts, many things that other parents Ishared with found interesting and important as well. Things like the fact that our money “wiring” and belief systems are created by the age of seven, and that the characteristic which best predicts financial success and well-being in adulthood is not IQ, school marks or socio-economic background, it’s self-control. Children learn their money beliefs and habits during the formative years in early childhood, so parents (you) are absolutely the most influential financial teacher your child will ever have - powerful concept isn't it?! There were many more insights I learned about how the brain and emotions interact around the topic of money - and how we can best teach our kids the key lessons they need for success and happiness in really simple but effective ways. After people began asking me to share the information I was learning, the stories I wrote for my kids to teach them the key lessons eventually became the Zela Wela Kids storybooks. They have now been successfully piloted in an academic program called Change Matters by Memorial University with over two thousand grade three students.

  During the early research phase when Natasha and Max were five and two years old respectively, I also documented and summarized the key financial life lessons teens needed to learn progressively, and I’m glad I did because now I need that information to share with them!!! These best practices and key life skills became an activity book for teens, starting off with #1: helping them identify their personal values. Identifying key guiding values is essential to help teens (and all of us) make financial decisions based on what’s important to them, not the media or their peers.

 

 

 Tasha with her favorite work out towel at the gym today

 

For the Parents

As soon as the teen guide, Steps to Success for Teens, 25 Financial and Life Lessons to Help you Achieve Your Dreams came out last year, parents, teachers and financial professionals started asking when I was going to create a guide for the parents. So here it is, Steps to Success Parents Guide to Teens and Money – How to Help Your Teens Make Financial and Life Decisions in Today’s World. Both of these guides are accredited by FINRA(the financial industry regulatory authority). The research was based not only on financial best-practices, but also personal success habits, and the neuroscience behind how we learn and make decisions. 

This parents guide helps us:

*Identify what family values we want to pass onto our children

*Understand why there is urgency to teach teens basic financial skills now more than ever before

*How exactly to teach financial life skills

*What to teach – best practices that can impact their overall mental and physical well-being

*Credit and debit tips

*The power and importance of entrepreneurial thinking

*The 12 biggest money mistakes to avoid with your teen

 



The Sooner You Start, the Better for Your Teen

This parent guide helps make discussing basic money concepts easy, and while money and finances is still the most dreaded topic of conversation in the home (more so than sex and drugs), it is essential you begin to discuss these key life topics with your teens. They will be making financial decisions numerous times per day for the rest of their lives, and they deserve to have a good foundation of information to base those decisions on.

If you're interested in learning more about how to help your teen, click here to get your copy of the new Steps to Success Parents Guide to Teens and Money.

I hope you found this helpful, as always feel free to share your stories or ask questions.

All the best to you and your family,

Nancy Phillips is the creator of the Zela Wela Way Resources for Families, Creating a Life of Meaning and Financial Well-Being.

Nancy has a Bachelor of Science degree in Kinesiology, and a Masters of Business Administration


 

Tags: teens financial literacy

Cool and Simple Ways to Save on Back to School Stuff

Posted by Nancy Phillips on Mon, Aug 03, 2015

400_pxls_np_0559_whitecropx2#2efa3a8It may be hot now but the fall will be here before we know it and school will be in full swing. Natasha and Max are heading into grades five and eight this fall, hard to believe since it seems like just a year or two ago I was waiting at the Kindy door.

Getting prepared isn’t quite the same as it used to be even five years ago, so here are some tips to help make it more affordable and simpler to get ahead.


 

Don’t Spend Where You Don’t Have To

*Do a quick check of what supplies you’ve already got so you don’t waste money on items you don’t need. Aside from a first day outfit if it’s a “must”, the same goes for clothes. Try to wait until October when the fall sales start, you’ll save a ton on your kids clothing costs.                                                              school_supplies

*If you’re kids are returning to the same school, and paying a flat supplies fee is an option, determine if that is the way to go - or if it’s better value to purchase the items on sale locally/online. Wait to see the class supplies list before stocking up. 

*Check for sales and coupons to help out as well as friends who may want to split the costs on some bulk purchases. Showing your kids how to comparison shop is as valuable as a life lesson as it is for saving you money.

If your kids are attending University or College, have them look online for used current textbooks, it can save hundreds of dollars per semester.

*Musical instruments and sports gear: try to borrow first or rent until it’s determined whether your child will be participating long-term. No point having a clarinet, tuba or trombone taking up space (or costing you big bucks) if it isn’t going to get used.

Turn It into a Valuable Financial “Daily Life” Lesson

Back to school planning is a great opportunity to involve your kids in meaningful discussions about needs and wants, saving, comparison-shopping, planning and budgeting - and overall good decision making. Studies show kids and teens want to learn how to manage money, and they can’t learn if they aren’t involved - experiential learning is critical!

Ideas to save on a daily basis:                                                                                       lunch_pic_for_blog

* Make lunches and drinks at home. This can easily add $5.00 - $7.00 a day to expenses, or $100.00 to $140 per month (yes, that’s $1,000.00+ per year!) An added benefit is that the kids are less likely to have high sugar and caffeine drinks which are very toxic to our system long-term, especially for youth.

*Have your child walk, bike or bus to work instead of driving them. It’s healthier for their body and brain if they get some exercise before sitting all day, and it saves you money - it’s a “twofer”!

*Technology has clearly changed the way we live our lives. Your child's desire for to own it can provide a great opportunity to have them begin taking on personal financial responsibility when it comes to saving for tech “wants” and paying monthly fees. This is something they will likely be involved with the rest of their lives. Get them started young, so they begin to learn what it takes to manage their money in adulthood.

*Create an overall spending plan that shows exactly what you will be spending on fees, supplies, clothes etc. so you know exactly what you’ve spent this year and plan more easily for the years ahead. A simple spreadsheet like this one will do.

 



CONCLUSION:

Planning for the school year is a big picture event with many details. Involve your kids and use this list to help you determine exactly what you have and what you may need to budget for, and then use it each year in the future so there are no surprises.

Hope this helps, let me know if you have tips that have helped you either here or at nancy@zelawelakids.com.

Enjoy the rest of your summer!

Nancy_sig-1



 

Top 3 Financial Life Tips for College Students

Posted by Nancy Phillips on Thu, Jun 25, 2015

 

400_pxls_NP_0503_goldcrop_march_2011The folks over at Credit Card Insider asked me to write a blog with 3 tips for College students, along with at least one personal financial disaster. Credit Card Insider teaches students about student credit cards and how to manage their finances.

This list of three tips isn't your typical "earn, budget, save" list. This one is much more personal, emotional and "human," I wrote it from the heart for students.  Managing money is emotional, and we need to have some basic understanding of how our mind, and literally our physiology, affects the way we think about and handle money.

Extensive research has shown our basic money beliefs and underlying habits are formed by the age of seven, so developing good decision making skills and ultimately long-term financial success is something we definitely need to learn about and practice.



1. Clarity – Decide What You Want

Be clear what you want and set a goal you’re passionate about – this will help motivate you to make good decisions with your money and prevent you from blowing it on things you’ll throw out or give away next year.  You can’t hit your goal if you don’t have one. This is the most important first step towards being successful in any area of life. A great question to ask yourself when making a decision is, “what will my life be like in five years if I chose this?” This question comes in handy for many different areas of our lives!

When a financial goal is big it may appear unattainable, and thus it could seem justifiable to buy “little” things, thinking you’ll never be able to afford that “big” thing anyway. In fact, that’s just the mindset that will prevent you from ever affording it. Just think, $5.00 a day adds up to $1,825.00 in a year. It’s important to understand that your desire and goal must be compatible with your beliefs in your ability to attain it. Why? Because your subconscious mind is about one million times more powerful than your conscious mind. No matter what your financial situation is now, you absolutely can be financially successful in the future, there are plenty of examples of rags to riches stories to prove it. The results are all about habits, and what you do with your money day in and day out week after week defines your outcome. Step by step you can get where you want to go, believe it and you will be able to do it. Set your clearly defined goal, a timeline for it, and take the first step to get your momentum going.

2. Set Up a Process for Simple Success 

One habit that will really help you get where you want to go is to divide up your income – don’t put it all in one bank account, it’s too easy to spend.

GISS_bank_Tasha

The four main purposes high net worth individuals divide their income  into are: giving, investing, saving and spending, I call it the “GISS Method” for short. There are many benefits to separating your income into the GISS categories including:

 * it prevents overspending

 * it allows you to build your savings for your big goals

 * you can build your investment bucket bit by bit so you have money to live on when you’re older

 * it allows you to give to organizations to change the world in ways that matter to you

The easiest way to set up this process to work for you, and your long-term financial well being, is to set up your bank account with different sub-accounts. Then when you deposit your checks, they can be automatically divided into the different categories. This takes the emotion out of trying to save at the end of the month. You can clearly see the balance in the account your bills are coming out of so you’ll have a better understanding of your cash flow, and enjoy piece of mind knowing that you’re building your savings and investing buckets slowly but surely.

You may be saying, "but I can’t afford to save anything, I’m a starving student!" I totally understand and remember that stage of life like it was yesterday, but it’s all about creating good habits. Your daily habits will define your future financial life. Even if it’s $5 a week, start putting something away in a separate account so you begin to take action in the right direction. This exact habit is how I bought my first home, paid off my student loan, and took a trip to Australia for a month – all in my late twenties.

3. Don’t Sabotage Yourself with Consumer Debt - The Importance of Conscious Consumer Decision Making

 Before you buy a “want” (aka something you don’t really need), ensure you take the time to consciously think about whether this item is going to get you closer to your goals, or put you further behind. Think about how many hours it would take to earn this item (after tax) and whether it really carries that much value for you. Marketers want you to spend your money whether it’s good for you and your future or not, that’s one of the many reasons why we have the “convenience” of using plastic and phones to purchase items now instead of cash. It’s proven scientifically that you will spend less if you use cash. This is because it triggers the pain mechanism in your brain, the insula, making it harder to spend. Buying with plastic, or waving your phone doesn’t trigger any pain – so it's easier to spend more.

Going into credit card debt to buy another  … (insert your vice here – shoes, purse, tech toy) is not going to get you where you want to be in life, it will get you into severe debt and potentially bankruptcy. Be aware that the exciting feeling of “newness” or “bling” is simply a chemical reaction in your brain and body, and it will go away quite rapidly. If you can't truly afford the product (meaning you have the money in the bank or your wallet), then you’re just left with guilt, disappointment and potentially paying a lot of interest on your credit card debt.

Yes, being on a tight budget isn’t necessarily how you want to be living right now, but the struggle helps motivate you to work for how you do want to live in the future, it provides the “fire” to work hard and create who you want to be.  One secret I’ll share is this, most adults who went to college or university look back at those “broke student” days as fantastic memories, - memories of camaraderie, learning, and stretching of their capabilities. You tend to forget about the stress and the exams.

Life tip – always maintain your hope and belief in yourself, even when it’s really challenging. We all make mistakes, lots of them. However people who maintain their self-esteem, visualize the future life they want in detail, and go on to “greatness” in whatever field their passion is, are able to learn from mistakes and not let it destroy their belief in themselves. This one factor will make a huge difference to your success and happiness.

The Incredible Growth that Can Come from “Mis-takes”

My financial kicker came later in life when I walked away from an exciting and challenging six-figure career, one I had worked towards for fifteen years. I left it to spend more time with my baby and toddler. Within a year my life turned upside down and I became a single mom, my career was two thousand miles away and I was in and out of traction for a debilitating and excruciating back injury. This was all happening in 2007 and 2008, during the worst global economic crash since the Great Depression. 

I’m not going to say that period was fun, it wasn’t. I questioned my choices and myself a lot. But challenging experiences force you to look at things differently and, if you allow it (and don’t swim in perpetual regret), to grow a lot as a person. It also may just put you on a new life path, one that you appreciate greatly and were truly meant for. 

Kids_throwing_yellow_ball_Aug_2014

I wouldn’t be writing this blog today if I had stayed on the path I was on, and I wouldn’t be growing as an entrepreneur or helping youth learn financial and life success skills. Most important to my values – I wouldn’t have seen and shared all the incredible moments of my children growing up during their early years – years I could never have gotten back.

Life today is inspiring and meaningful; I’m healthy and very excited about the future. I only wish I could go back and tell my 2008 self that everything is going to be OK, in fact, much better than OK.

 

                                                                                                                                                                 Photo of Max and Natasha taken by Kerry Phillips

CONCLUSION:

I hope you have found something within this blog that resonates and inspires you. You really can achieve the life of your dreams, it just may not be the exact path you thought it would be. Basic financial skills along with focus, passion, perseverance, self-control and willingness to learn from your "mis-takes" will allow you to create any type of life you want. 

Never stop dreaming.

 

Please feel free to share your thoughts or comments here or on the facebook page, the Zela Wela Way.

If you are looking for a resource to define your values, goals and begin to learn key financial life skills, check out the Steps to Success Teen Guide, 25 Financial and Life Success Lessons to Help You Achieve Your Dreams.

Nancy Phillips is the mother of two children, has a Bachelor of Science degree in Kinesiology and a Master of Business Administration. She is the creator of the values-based Zela Wela Way financial resources and author of the Steps to Success Teen Guide, 25 Financial and Life Success Tips to Help You Achieve Your Dreams.



 

Kids and Money: 10 Great Teachable Moments

Posted by Nancy Phillips on Sun, May 03, 2015


400_pxls_NP_0559_whitecropx22EFA3A8Hello parents, educators and all the great Zela Wela Way followers out there helping our youth learn financial life skills. I was just looking at the list of countries we have coming to this site. Wow, we have readers spanning from Canada and the United States to Australia, Finland and Sweden, all the way to Brazil, Botswana, Ghana, Egypt and the Philippines. I love it. Education can make such a difference for our children, and we have people here from over fifty countries looking for ways to help!

One of the questions I have been asked a lot lately is to give examples of great teaching moments, ones we might not think of during our busy days. Below you will find a list of ten simple examples. These are powerful teaching opportunties that can supercharge the financial life skills of the kids and teens in your house. We have to keep in mind that just because our kids have become teens, it doesn't mean they already possess financial life skills. It doesn't just "happen." They must be exposed to opportunities to learn the skills. 

If your children learn the lessons below, it will begin to create a path of knowledge that will help them prepare to live successfully on their own.


     Zela Wela Kids Caroline and Connor Vogelsang
      with GISS banks and purchased items!

Caroline_and_Connor_w_GISS_banks   ConnorAndCaroline5

Supercharge Your Kids Financial IQ with these Teachable Moments

1. When they want you to buy them something

Ask, “how could you earn the money to buy that?” You will find out very quickly how interested or committed they are to their desire for the item. If they are committed to saving for it, help them come up with a list of ways they can earn money - with ideas that are safe and appropriate for their age.

We went though this exercise in our house last year with cell phones. Natasha cut the grass, organized closets, had a yard sale and so on. She was thrilled and very proud the day she bought her first cell phone - just in time for the start of the school year!

2. At the grocery store

400_pixels_Needs_and_Wants_Cover-1Have them help you compare prices. For years I've started this by saying “your mission is …” so they feel like detectives. My kids nearly fell over when they saw the difference in price between a can of frozen juice and premixed drink jugs. The premixed drink is almost three times more! Added bonus -they like stirring the frozen drink!

fyi - the grocery store is also a great place to discuss needs versus wants. For example, milk or fruit versus cookies. Key success tip for this lesson is: don't always go shopping when you're in a rush.

3. In the car

Discuss how much it costs to fill the tank, little kids like to see the numbers on the dial moving. You can discuss why airplane tickets cost a lot, because planes use a lot of gas and so on. Create stories whenever possible, that makes the lesson more memorable. As your children begin to learn the price of things, they will be able to begin to understand relative value through comparisons their brain will now have the information to make.

4. Going out for a meal

Let your child help figure out the tip, or if they are too young, count it out the cash on the table with them. These opportunities for real-life math and counting are disappearing in our digital world. This situation makes it more and more difficult for our kids to learn even the most basic money skills. This issue will only hurt their confidence around handling money and understanding cash flow as they get older, so give them opportunities now. Using cash is extremely helpful for children to understand real-life financial transactions; otherwise it is a very abstract concept.

5. When you are planning a big purchase

Encourage your kids to help you do the online research and find the best price and shipping charge. They love a reason to go online, and teaching them the value of doing research or "due diligence" before a big financial decision is an important life lesson which will positively impact their future well-being.

6. Choosing extracurricular activities

Whether you can afford to let your kids be involved in multiple activities or not, it is worth discussing the costs so they begin to understand relative cost and value, just like the grocery store example. How many hours of ice time do we get for $300? How much do you enjoy dancing versus soccer? It is important to involve our children in the decision making process as they mature. This will enable them to become more skilled at thinking through priorities and making thoughtful decisions in the future.

7. Allowance – their weekly practice in money management GISS_bank_Tasha

 Using the GISS Method - which stands for give, invest, save and spend,  teaches your child about the four main purposes they can use their money for. This way  they learn that money isn’t just for spending. For more information click here

8. When using your credit card

Show that you planned the purchase  - if you have your list or budget, show it. Explain the money you are using is borrowed until you pay the bill. Explain that they will have to pay their credit card bill monthly or they will have to pay large extra charges called interest. 

9. When discussing vacation plans

Discuss the choices and the costs. Many families have their pre-teens and teens research the travel plans and present the best options. Then everyone discusses and makes the decision together, it’s a really fun way for everyone to share the excitement.

10. Unexpected expenses

If your fridge or car breaks down, it is the perfect opportunity to discuss why having an emergency or “rainy day” savings fund is so important as they get older. When they have a car, they need to be prepared for unexpected expenses as well.

CONCLUSION:

It's never too young to start talking to your kids about choices, understanding value and demonstrating delayed gratification. These are lessons they take into their subconscious during the formative years and the experiences will form their beliefs and habits about money as their grow into adulthood. Don't underestimate the power of these daily life lessons. Consistency and repetition plus the opportunity to learn through experience is vital for your children to learn good financial habits.

What are your favorite teachable moments? Please share with our community. Parents all over the world want to help their kids learn these skills, just like you do.

I hope you found this information valuable. If you would like to learn more about the resources available to help you teach these life lessons, please visit us at http://www.zelawelakids.com

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Tags: kids and money, GISS Method of Managing Money, Teachable money moments