Don't Forget About The Kids!

I recently read an article that stated only three out of ten US parents talk to there kids about money and money related matters.  This is a major issue as we need to produce more financially responsible people.

Financial literacy is a must for our children in today's society. A few decades ago financial literacy for children meant opening a bank account, showing them how to write a check, balance a checkbook and saving. Today true financial literacy for children must be more robust as the financial health of our nation depends on it.  Remember our children will be the next leaders of our nation, which has been in financial turmoil for the past sixty years. If we dont do something soon there might not be a land of opportunity to lead.

The talk about finances with our children is just as important as the "sex talk" although many parents do not see it like that.  How do I suggest to handle talking to your children about money? I am glad you asked.

Well we need to start with the basics - teach them how to save, how to give back to help others, how to write a check and balance the checkbook.  But let's add topics to our discussions - there can't just be one discussion because the topic of money or finance is just too broad - like retirement (including the benefits and drawbacks of 401Ks and IRAs), credit, creating a budget, insurance, investing, entrepreneurship, taxes and home ownership.

If you need some help to understand how these discussions should go, don't hesitate to contact us.


Tightening The Belt

With America's credit rating being downgraded it should be a clear clue to each of us that we have to make some changes.

What types of changes are necessary? There are three changes that I believe we should make immediately.

Change the way we view credit.

With the average American household being in more than $16k in credit card debt we need to see change. Many view credit as a means to access more cash when they don't actually have the cash. This is the wrong mentality to have.

Credit is designed to assist a responsible person or business to use the bank's money while theirs is being invested. The idea here is that you and I should only use credit cards if there is an extreme emergency and we don't have the cash or if our money is being invested in something that is earning more of interest than we are paying the bank. If neither of these are the case, then we should keep the plastic in our pockets.

Change our posture on needs and wants.

There has to be a clear definition for each of us as to what a “need” is and what a “want” is. Here is the way I view the two. A “need” is something that is essential to survival (i.e. shelter, clothing, food). A “want” is anything outside of a need. For instance, I need shelter but I may want to live in one of the most exclusive zip codes in my city. This is where many people get it wrong. It is human, especially in America, to confuse a need with a want.

The second part of the definition is that once the “need” has been meet and there is the financially wherewithal to afford anything else, we can then and only then, explore the acquisition of any “wants.”

Do you have a clear definition of the two? If not, you have to develop one and prioritize your needs over your wants.

Change the manner in which we spend.

This bleeds from the second point. We have to learn to live beneath our means. Typically the first step in doing this is to learn to live on eighty percent of our net income. After mastering that, the next step is to live on fifty percent of our net income. How do you do that you may ask?

This can be accomplished by following the items in this blog, creating a budget and sticking to them both.

You can do it!
Go get 'em!


Charge-offs on a credit report are detrimental to a person’s credit report.  I often notice that people don’t have their credit reports pulled very often.  Instead they rely on credit monitoring services, which is not bad, but what about the charge-off that were there before the monitoring started?  Others are many time oblivious to their credit score or any derogatory marks on their credit report.

Here is what I suggest, first pull your credit report from a reliable source.  The second thing you want to do is to review your report with alone or with a financial expert.  Then identify all of the accounts that have charge-off attached to them.  Normally you can contact the original creditor and make arrangements to pay the balance, if it is truly your of course.  Upon paying the balance request from the creditor a satisfaction letter showing that the amount has been paid in full.  Then you will want to send a copy of this letter to the credit bureau(s) which the original creditor reported the charge-off to.

In a matter of 1-3 months your report should show that the amount was paid in full and the charge-off goes away.  Your credit score should begin to rise a bit once this happen.  

Please note that the process, although sounds very easy, can be intense. If you need further assistance please feel free to contact me at