3 Tips for Maintaining Your Resolution

Happy 2012!

Research shows that 40 to 50 percent of Americans make New Year’s resolutions. If you’re among them (I am!) then I bet yours had something to do with either money, career or health. In that spirit, I thought I would share a few tidbits on maintaining those resolutions.

Money/Shopping Believe me, I completely understand the adage, “The clothes make the (wo)man.” With The Magnificent Mile out my office window, it’s easy to be drawn in by the beautiful clothes and sales promotions. But most people (myself included) simply can’t afford to go clothes shopping on a regular basis. And when it comes to the latest trends, you don’t need to go all-out with a new wardrobe in order to look in style.

If you’re trying to trim your clothing budget this year, follow this favorite tip among wardrobe stylists: stock your closet with high-quality basics then use your clothing budget to update with one or two trendy items each season. For example, a scarf in the season’s color or a flattering dress that you can wear for a client meeting, networking event and an evening out will make you feel brand new without feeling broke.

Career Perhaps one of your goals for 2012 is to figure out your career path and make changes where needed. No matter where you are on the career spectrum, it’s always good to have choices. And by choices I mean that you don’t feel stuck in your job because you can’t afford to make a change. If that’s you, it’s time to get started on that rainy day fund.

Research shows that the reason people don’t save is because they don’t think they can afford to – “saving” means putting away big chunks of money, and they figure they’ll start that when everything else settles down. Guess what, it doesn’t. The key is to start small.

I save 5% of my income to cushion me in times of slow business. If you have a regular paycheck, start with $25 per pay, then tack on $5 to that amount each month. Before you know it, you’ll be saving $100 per paycheck and you’ll have a nice cushion built up for that day you decide to leave your job to start a business, go back to school or try a new industry.

Health To me, good health is an investment in itself. Barring an unforeseen illness, many of the diseases that bog down Americans like high blood pressure, heart disease and diabetes are preventable by maintaining healthy habits. Investing time and maybe a little money while you’re still healthy will pay dividends for years to come.

If your resolution has to do with losing weight, don’t forget the other aspects of maintaining your health. Make time for your annual check-ups and even if you fall off the wagon with your diet or exercise plan, keep trying to get that exercise in. Even a 30 minute walk will reduce your risk of many heart-related ailments. Also, try skipping the chips at the deli – you’ll save a little bit of money AND you’ll contribute to your health, saving you money in the long-term on health-related expenses.

Above all, join me in celebrating a chance to start another year anew. I wish each of you a ridiculous abundance of happiness, health and prosperity in 2012! Please share your resolutions in the comments below.

 

Kelley C. Long, CPA is the owner of KCL Financial Coaching, a member of the National CPA Financial Literacy Commission and a tax accountant. She moonlights as a BodyPump instructor and believes that the true meaning of financial security is having choices in life. Learn more about her at www.kclmoneycoach.com.

 

5 Year-End Tax Tips for 2011

Time is running out to take steps to lower your 2011 tax bill. Here are 5 ways you can do so, but act quickly!

1. If you’ve been putting off energy-efficient improvements to your home such as replacing your roof, windows, exterior doors, upgrading your furnace or hot water heater or adding skylights or insulation materials, time is running out to claim the tax credit associated with qualified improvements. There are lot of limitations to this credit, but it expires at the end of this year, so get cracking if you want the credit.* (and remember a tax credit is a dollar-for-dollar reduction of your tax bill, so you can knock the full dollar amount off what you pay)

2. Are you planning to make a big purchase like a car or other high-ticket item in the next couple months? If you itemize, you might consider making that purchase this year – it’s the last year you can elect to deduct total sales tax paid instead of state and local income taxes. This isn’t an excuse to go shopping, but if you’ve budgeted for it and it’s almost time, it might be worth it to get shopping before December 31.

3. Go ahead and prepay 2012 college tuition (for the first 3 months at least) while the higher education above-the-line deduction is still in effect. This provision expires at the end of this year, which allows you to deduct up to $4,000 in qualifying education expenses. Income limits apply, so if you make more than $80,000 (or $160,000 if you’re married) you don’t qualify. If you make between $65,001 and $80,000 ($130,000 or less if married) then you can only deduct $2,000. Not sure? Ask me!

4. If you pay estimated state or local income taxes and you itemize, mail those payments before December 31, (even though they’re not due till January 15) so you can deduct them against this year’s income.

5. Since tax rates aren’t changing for next year (they remain 10%, 15%, 25%, 28%, 33%, or 35%), try to defer income until next year so you can wait a whole extra year to pay the taxes.

Just remember: it’s perfectly legal to avoid taxes, but it’s quite illegal to evade. To ensure that you’re maximizing tax savings without violating the law, contact me for a consultation.

* If you’ve claimed the credit in the past (in one or more years since 2005) then you may be limited. There is a lifetime cap of $500 ($200 for windows). If you haven’t yet met the cap, you can claim the difference.

Kelley C. Long, CPA is a personal financial coach and tax preparer who believes that the true meaning of financial security means having choices in life. Visit her website at www.kclmoneycoach.com for more information.

Cohabitation: Your Ticket to Financial Freedom?

I recently had the privilege to write an article for LearnVest, a great website for women and finances, regarding the potential financial benefits of moving in with your significant other. Since the article that ran was a much-edited version of what I submitted, essentially losing the spirit with which I wrote it, I felt it necessary to post my original submission here. Hopefully this clarifies that my opinion is IF you decide to move in with your boyfriend/girlfriend, it can also significantly boost your bottom line. Read on for my original submission:

 

When my aunt moved in with her boyfriend in 1988 it caused quite a stir in our family. The perception was that she was “giving up the milk for free,” and he was the one gaining while she must be losing. It wasn’t until he’d put a ring on it that my grandmother was able to chill.

 

Nowadays, things are different. My grandmother still isn’t excited about the fact that I live with my boyfriend, but she understands that times have changed. It seems like young women who don’t cohabitate before marriage are the unusual ones now.

 

The thing is, rather than compromising ourselves by shacking up, we’re hoping to avoid divorce by giving it a test-run first. “Paradoxically, more people today value marriage. They take it seriously. That’s why they’re more likely to cohabit. They want to make sure before they take the ultimate step,” said University of Pennsylvania sociologist Frank Furstenberg in the May 28, 2001, issue of Newsweek.

 

Over 12 million unmarried partners are living together today according to the US Census Bureau’s American Community Survey: 2005-2007, a number that increased 88 percent between 1990 and 2007. “Today it’s unusual if you don’t live with someone before you marry them,” John Hopkins University sociologist Andrew Cherlin stated in Newsweek.

 

The decision to move in with your significant other should obviously be based on your love and level of commitment to one another, but it also offers some financial benefit if you play it right. My friend James* summed it up best when he said, “We moved in together because we simply wanted to be around each other all the time.”

 

Back when Shelby’s boyfriend moved in with her, she found that it improved her financial situation “quite a bit. We were saving his rent payment plus utilities, gas going to and from his place and we were able to cook our own meals more since we were coming home to the same place.” Shelby, who is a CPA, was appointed the CFO of their relationship and took over management of both of their finances.

 

Combining their homes and money also enabled them to become debt-free. “[Sam] did have a boatload of debt when he moved in. Combining our finances definitely helped pay off that debt more quickly. By a lot. Both because we significantly reduced expenses and because I was more aggressive in paying it off than he had been.”

 

Similarly Kaylie, a project manager from Ohio, found her financial situation better than it had ever been once she moved in with Zach. She was able to eliminate credit card and student loan debt and they “had the money to do pretty much everything we wanted to without worrying about whether we could afford it.”

 

The key is to be strategic about what you do with the money you save when moving in together. Like Kaylie says, “When you go from supporting two households (as a couple) to one, there is likely going to be a certain amount of flexibility when it comes to finances.”

 

Rather than increasing your daily latte intake or becoming a regular at Ann Taylor, sock your extra cash away to jettison any long-term financial worries you’ve been harboring. If you’re still paying down credit card debt, increase your payments till you’re debt free. And if you don’t already have an emergency nest egg of six months salary tucked away, get that going. Nothing spells financial freedom like knowing you can take care of yourself if things don’t work out.

 

When my sweetheart and I moved in together, our joint housing costs decreased by almost half. But that’s not the only perk I’ve enjoyed. Sharing a household with the love of my life has allowed me to save more toward retirement, and concern for our joint financial health has drawn us closer while offering us the chance to really improve our communication.

 

Walking through a financial decision together is also one of the best ways to really see someone else’s values in action. The way my boyfriend makes financial decisions shows me what’s important to him and the fact that we make decisions jointly serves to deepen our trust in each other and gives us a greater sense of being in it together.

 

In the end, if you’re considering sharing an address with your significant other, it can also be a great opportunity to change your financial picture for the better. With proper evaluation of the savings realized and honest communication with your partner, moving in together could be the ticket to long-term financial success and freedom for both of you.

 

* All names have been changed to protect privacy

 

 

 

Expect the Unexpected: Get Your Emergency Fund In Place

Would you be able to cover a large unexpected expense like a new air conditioning unit for your home or an expensive car repair due to an accident? Turns out if you couldn’t, you’re not alone.

The Wall Street Journal posted an article this week about how almost half of Americans would be in dire straits if they had to come up with $2,000 within 30 days to cover an unexpected expense. I firmly believe that this is why credit card debt is so out of control.

It’s easy to blame our nation’s consumer debt on people who are irresponsible or uneducated about how to use credit cards, but the people I work with who are struggling with their debt got there in spite of being financially aware and responsible. They aren’t spendthrifts who can’t control themselves at the mall. They’re hard-working, disciplined people like you and me who needed to cover something quickly like a trip to visit an ailing relative or their child’s traveling soccer team expenses.

The thing is, even the tightest and most well-thought out budget is going to be tested by expenses that you simply can’t anticipate. For example, I recently had my cat at the vet for a cyst she grew on her toe. More than $750 later, she is on the mend. But you can bet your bottom dollar that I wasn’t planning on shelling out $750 to fix my cat’s toe!

In anticipation of her visit, I even set aside $500 thinking that would be MORE than enough to cover the surgery. And $500 did cover the surgery. But I didn’t factor in the cost of the initial visit, follow-up meds and unexpected additional visits due to her bad reaction to anesthesia. Luckily I have a cushion fund in place and was able to tap that instead of my high interest rate MasterCard.

So how do you avoid getting further into the hole of debt due to the unexpected? Don’t wait to start saving for a rainy day. Don’t wait until you’re out of credit card debt. Don’t wait until you receive your next bonus or tax refund. Start today. Keep paying as much as you can toward your debt, but also put a little bit away, even if it’s just $25 per paycheck.

You’ll be glad it’s there when you need it.

Protecting Your Good Name: Preventing Identity Theft

Recently while giving a presentation to college students on making ends meet after graduation for Money Smart Week Chicago, I was surprised by the number of questions the students had about identity theft and how to prevent it.

While I recommend a few general things like shredding any document that has your name and address on it and choosing the ‘credit’ option when paying with your debit card, the Federal Trade Commission has an extensive page with many more specific things you can do to protect your identity. Here is a quick summary of things you should keep in mind.

1. Protect Your Information Physically: This includes things like putting away financial information if you’re having work done in your home, leaving your Social Security card at home in a lock box (I’m surprised how many people still carry it with them), and requesting to use less obvious security measures than your mother’s maiden name to protect your bank accounts and utilities. These days with everyone and their mother on Facebook, it’s pretty easy to figure out the answer to that question!

2. Treat Your Mail and Trash Carefully: Use post office collection boxes or a secure collection box at work to send outgoing mail and try to pick your mail up as soon as possible each day. And when you’re tossing anything with your information on it, including charge receipts, credit card offers and physicians statements, make sure you shred them before placing in your recycle bin or trash can. I’m often startled by the well-dressed man that regularly picks through the dumpster of my building and will confess that I go to a few extra pains to make my trash extra rank to discourage this practice. Gross!

3. Don’t Click That Link: An identity thief doesn’t even need to be in the same country as you to access your personal information if you keep any of it stored on your computer. All it takes is one click on the wrong link and a savvy hacker could have a field day with your info. I save my tax returns on my laptop to save trees, but I shudder to think that the wrong person might find that information, so I am very careful about links sent to me in emails or even on Twitter and Facebook. Likewise, if you ever list anything for sale on craigslist, you will almost always receive a scam email requesting that you “click here to give me some more information,” from a “very interested and motivated” buyer. Don’t click. Only enter your information into websites if you got there by typing the web address in yourself.

I hope that by utilizing these tips and others offered on the FTC site that you’ll never find yourself a victim of this frustrating and truly life-altering crime. If you do, the same site also offers a thorough process for you to follow to work to get your name back to good. And now, I have some shredding to do!

Kelley C. Long, CPA is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Tax Time = Tuneup Time

This recent article by NY Times writer Ron Lieber is a great reminder that tax time is a great time to check in with your complete financial picture and make some tweaks to keep you on track. It’s also a great time to organize your filing and get rid of financial clutter!

In short, the article suggests the following steps as long as you’re digging into your financial records. I’ve added my own tips to the steps as well as the author’s advice.

1. 401k checkup: First, rebalance your funds. As mutual fund values change, so does the allocation of your 401k account. It’s important to go in at LEAST annually (I recommend twice a year and help clients do the same) to reset to your target allocation.

While you’re in there, liquidate any company stock that you have accumulated. Many employers give their match in company stock, but it is risky to hang onto this. If things go south with your company, you could be out of a job AND see your 401k value go in the tanker. Diversify away from having all your eggs in that basket.

What about those old 401k accounts from former employers? If they’re still sitting in the company’s plan, this is a good time to consolidate those accounts into a rollover IRA, where your options will be greater and you’ll save on administrative fees. Not sure how to do this? Guess what else I help my clients do…

2. Saving for the Medium Term: We’ve all heard the rhetoric about saving for retirement and the benefit of saving early, and who hasn’t heard of the absolutely-necessary emergency fund? But what about the other things in the medium term, like vacations, large purchases, home maintenance or other big-money items that probably don’t fit into your day-to-day budget but that you’d like to eventually buy? Get started today by setting up a separate savings account for each goal, then make your savings automatic. Fifty bucks out of each paycheck probably won’t be missed, but it can add up quickly toward that week in Nantucket or new tires on your car. ING Direct lets you set up subaccounts and they offer great rates, compared to what you might get down the street at your bank branch.

3. Automatic Donations: If you’re charitably minded but often put off writing those checks till the end of the year, consider dividing your donation by 12 and setting up automatic monthly donations to ease the burden on your end-of-year budget. And no matter when you are giving money to charity, make sure you’re either writing a check or using a debit or credit card to provide an accurate record of the donation for your tax return. The IRS no longer allows the “I put ten bucks in the offering plate at church,” deduction. You gotta prove it.

If you’re an American Express cardholder, Lieber recommends their Members Give program, which lets you set up automatic donations or you can even use Member Rewards to make your gifts. I’m all about credit card rewards as long as they’re not incurred by debt you’re going to carry from month-to-month!

Taking these little steps should only take about an extra hour as long as you have all your financial information out, and it can make a tremendous difference in your financial health going forward, so just do it! You’ll be glad you did when you begin to reap the rewards of sound financial management.

Kelley C. Long, CPA is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

The Innocent

If you’re not already subscribed to my monthly newsletter, you’re missing out on my monthly review of the eight financial archetypes presented in Brent Kessel’s book It’s Not About the Money. For the month of February, I profiled The Innocent, which struck a chord with a lot of my friends and contacts. Read on and see if you maybe see yourself or someone you know.

The Innocent

Innocents, whether they have money or not, have the common thread of being unable to master money. Either they weren’t taught the skills, are confused by money or their natural gifts are not economically valued in our society. Innocents aren’t necessarily against money like Idealists are, they just have a hard time hanging onto it and dealing with it.

Many of the other financial archetypes develop their relationship to money in response to fear, anxiety or frustration. Innocents don’t have a coping strategy, so the pain they feel about their financial situation is often deeper and more obvious for others to see. They might feel like they should have the ability to be better with money, but when it comes down to trying, the response has historically been to shrug and say, “I guess I’m just not good with money.”

Even if they earn a high income, Innocents don’t have the know-how to secure their financial futures, so at the end of the day they find themselves living paycheck to paycheck. Innocents are far more likely to be regular lottery players and fall prey to get-rich-quick schemes, looking for a quick fix. When these endeavors fail, it just adds to their lack of confidence and feelings of inadequacy when dealing with money.

Practical Ways to Manage Cash Flow and Budgeting

Innocents usually spend everything they have and sometimes more, without any idea where the money is going. They are often people with no earnings of their own and depend on a spouse, family members or the government for support, which further adds to their financial distress. The first step of getting their financial house in order is to look at the numbers.

If you’re an Innocent and you don’t know how to look at the numbers, get help. Ask a financially savvy friend or hire a financial coach. Find out where your money is going, then start living within your means immediately. Find ways to simplify your lifestyle so that you can become self-sufficient. Prepare a debt pay-off plan and stick with it. It won’t be easy at first, but ignoring your financial situation won’t make it go away.

Many Innocents are women that are divorcing after many years of being financially dependent on their husbands. They know one thing: that they want out of their marriage. But they don’t know where to start when it comes to becoming financially independent. With a little bit of planning and professional guidance, I help these women save their energy for dealing with the emotional aspects of ending their marriage so that financial concerns don’t cloud their options as they move on.

Next month I’ll be covering the Caregiver archetype, someone who regularly subjugates her needs (both emotional AND financial) to those for whom she feels responsible, leading to resentment and poor financial health. Sign up for my newsletter so you don’t miss a single review!

Kelley C. Long, CPA is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Are You “Making It?”

I finally got a chance to watch the Oprah show last month that had Suze Orman putting the smack down on “Octomom” Nadya Suleman. And let me tell you, Suze let her have it. I’m usually not a fan of calling someone on the carpet and making her feel like crap about her financial situation, but in this case it was absolutely necessary.

I could go on and on about how the conversation played out (or you can read it yourself here), but what I found most compelling about Nadya’s little “come to Suze” was Suze’s answer to Nadya saying she was “making it” financially when she decided to have eight more babies (in addition to the six she already had).

When Suze asked Nadya what she was thinking when she decided to have more kids, Nadya commented that she was getting by day-to-day just fine. Suze asked if she was “making it,” and Nadya said that yes, she was making it but things were tough. And then came my favorite part:

Suze stopped Nadya mid-sentence to inform her that she was not “making it.” Making it is NOT getting up in the morning and making it through the day to try the next day. Making it is:

• Having an eight-month emergency fund
• Not having credit card debt
• Not needing food stamps
• Putting money in your retirement

This made me really think about how many of us spend money on things we can’t afford and don’t really need, thinking that just because we are still able to pay the bills and we have a job that we are making and will figure it out in the future. I did this when I first graduated from college – I spent a summer living on my credit card, figuring that when I started my new job in the fall, I would pay off the debt right away.

Little did I know that it would take me more than five years to finally see a $0 balance on that card. And that didn’t come easily either – I threw every little “windfall” that came my way into getting that debt paid. Tax rebate check? Straight to VISA. Work bonus? In the mail to VISA. Raffle winning at a fund-raiser? Hello, VISA. You get the point.

I sacrificed quite a few opportunities to enjoy exotic travel or indulgent spa treatments or even just an extra visit with family because I knew that until that debt was gone, I shouldn’t be spending a lot of money on non-essentials. I WASN’T making it, even if I had a great-paying job, was putting money in my 401k and was still in my 20’s.

I’m not professing that unless your financial picture is perfect, you shouldn’t take a vacation or buy that new couch you need. “Making it” is a goal to be worked toward for most of us and getting there doesn’t guarantee financial peace. Just don’t fool yourself when you’re whipping out that credit card next time you know you probably shouldn’t.

So, are you making it? Please share your story or opinion in the comments.

Kelley C. Long, CPA is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Grocery Shopping Tips

One of the changes I am working to make permanent in 2011 is to plan ahead with meals and increase my cooking at home, both to prevent mindless nibbling as well as save us a little bit of money on the food budget. I’m also hoping this helps me shed a few of the fifteen pounds I managed to pack on through 2010!

Tuna casserole for grown-ups!

Inspired by my new Jessica Seinfeld cookbook (thanks, Mom!), I’ve done pretty well so far. And Sweet Pea has even expanded his pallet a little to try some new things! But when I look at how the grocery bill has ballooned, I have to think twice about how I’m going about my weekly food shopping.

To that end, I’d like to share some food savings tips from the August, 2010 issue of O Magazine . I hope they help you too with your financial resolutions today and throughout the year!

Fish and seafood: Frozen fish is a great way to save, as much of the “fresh” fish at the grocery has already been frozen (the label will tell you this). If you want to splurge, wild Alaskan salmon is worth the money and is certified as sustainable by the Marine Stewardship Council.

Baking ingredients: Skip the name-brand sugar — you can’t tell the difference between the much less expensive store-brand. But when it comes to vanilla extract, experts say it is worth the extra money to buy the real deal.

Cookware: Cookie sheets and stock pots don’t require any fancy materials or coatings, so go ahead and buy the cheapest on the shelf. But don’t scrimp on a good skillet that you’ll use for things like searing or sautéing. You’ll appreciate the even distribution of heat offered by a high quality pan.

Liquor: I know this one from personal experience: if you’re going to mix vodka with anything (even olive juice, like my favorite cocktail), no need to buy the good stuff. Vodka is like tofu — it adopts whatever flavor you add to it. Save your money for a delicious bottle of single malt scotch!

Spices and herbs: Most name brand spices don’t offer anything different than generic brands, so go ahead and cheap out there. And when it comes to buying fresh versus dried, Alejandra Ramos advices that the only time you REALLY need to use fresh is when the recipe calls for basil and parsley.

Organics: The rule of thumb for buying organic produce is that if it’s sweet, go organic. But if it is a fruit or veggie with a thicker skin like onions, bananas or avocados, you’re safe from pesticides anyway.

Olive oil: If you’re going to cook with it, regular olive oil will do just fine. And if you’re making a dressing, you can mix two-thirds cheapie with one-third fancy and still enjoy great flavor. If you’re drizzling over food though, go for the good stuff.

Fruits and veggies: If a vegetable is out of season, buy frozen without losing a lot of the nutrients. Not sure what’s in season? Check out Eat the Seasons, a website updated weekly with what IS in season. Brussels sprouts, anyone?

Cheese: I saved the best for last, one of my diet staples. The only time you ever really need to go high-end on cheese is when you’re doing a cheese plate or fondue. Otherwise, go economy when serving with crackers, in meals, salads or even when grating over food.

I hope you’ve found some information to help with your next trip to the local market. Anything I missed? What grocery store tidbits can you offer? Anyone care to disagree with any of the above?

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Kids & Money: It’s Never Too Early to Get Started

 

By the time many of us learn how to deal with money, we are into our thirties and facing a mountain of credit card debt. And while we can’t totally blame our parents for our own poor financial management, it wouldn’t hurt to stop and think what kind of message you might be sending your kids about money.

Do you cave easily when your babies want you to buy something while shopping at Target? Is receiving a special treat something that your child appreciates or expects? When your teenager runs out of money, do you replenish her supply without consequence? What do you think will happen when she “grows up” and is on her own?

The thing is, it is never too early to start raising financially aware and responsible kids. And I don’t mean you need to teach them to be tight wads or that you shouldn’t indulge them – that’s part of the reason you work so hard. But do your whole family a favor and make sure they at least learn the basics of money in a practical way.

My heart warmed last week when I saw a young child helping his mom at the grocery ask, “Can we get this yogurt?” His mom asked how much it was, and when he answered, she offered him a choice, “Well, that’s a little more expensive than the yogurt we usually get. If you want to get that, then we can’t get the granola you want.”

Not only was mom teaching about trade-offs and budgeting, she was protecting her family’s financial position by not blowing the grocery bill to buy premium treats. Yay, mom!

So how can you save your kids from suffering financial duress in their later years while still feeling like you’re giving them the life you want to give them? First, if you are giving an allowance, tie it to some household responsibilities.

Depending on age, that can be as simple as helping put clean clothes away and light cleaning to mowing the lawn and taking the trash out. When I was young, my jobs included emptying the dryer and emptying the dishwasher. My brother was in charge of the garbage and the lawn. As we aged, so increased our responsibilities.

Beyond giving an allowance, help your kids with the management of their money. I once heard of a parent who kept track of his son’s allowance on a notecard, and each payment was divided into three categories: spending, saving and charity. When the son wanted to spend money, he asked dad what the number was, and if there wasn’t enough, he had to wait. Dad added interest to the savings category, helping show how savings can grow.

And when they came across a charitable opportunity like a Salvation Army bell-ringer or a nun collecting money for a school, the son learned how great it feels to give to a good cause.

The bottom line is, if your kids grow up without any exposure to what it is like to delay spending or consider a pricetag, you could be setting them up for a lot of financial pain down the road. Start today and give your kids the gift of financial peace and savvy.

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.