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Young people usually don’t have the spouse to walk through decisions with. You need to talk out big decisions with somebody. Probably a few somebodies. Parents are usually good for this, and so are life-long friends (as opposed to those friends you really aren’t that close with), but whatever you do, make it a point that you talk out any major purchase with someone who cares about saving for the future AT LEAST as much as you do. This will help keep you on track, and may even save you a few lumps for making a really bad decision.

I was reading through some of my favorite blogs, when THIS came up. I liked the post, and some of the points were great. When I was reading the comments LAZY MAN made a fair comment about not seeing men talk about the designer suit they didn’t buy.

So I had to.

A couple of years ago, my wife and I were asked to stand up for our nephew as Godparents for his baptism. Of course we were honored, and said yes. My wife got a nice outfit and I decided that, since I had put on a LOT of weight since the last time I wore a suit, it was a good enough excuse to do so.

Now that I was HUGE, I was kind of limited to the places I could go. I could go to the local fat-guy store (that’s what I call them since I have yet to see a tall guy walk into a big and tall) and get something that I was okay with, or I could go to the high class Fat Gentleman store and have a suit custom made. On a lark, I chose the latter.

I went to the Fat Gentleman store, and tried on this suit that felt like butter. It was easily the nicest suit I had ever worn, and I would have thoroughly enjoyed wearing it. I would have worn it EVERYWHERE. So, I get the guy to take my measurements and write up an order. The cost was $900.00 after everything. My wife and I make good money, but we are both frugal and have both agreed (if I knew what was best for me) that she manage our finances since I have a lot of other things on the table. We made a deal where I tell her about any expenditures that are over a certain amount. I forgot.

When I got home and told her the good news, she flipped out! She couldn’t get over the fact that this suit was well worth the amount of money, since it didn’t come with a bike or something. We had a big fight, I cancelled my order, and never forgave her.

The aftermath:

First, we get to the baptism, and if I would have worn the suit, I would have been woefully overdressed. In fact, I wore a tie, put decided to take it off when I saw that the father wasn’t even wearing a tie.

Second, I needed to get some work done on my car. Anyone guess how much that cost me?

Third, I recently started losing a lot of weight, and the amount of weight would have made the really really nice suit useless.

The lessons here are simple: First, never buy something on an impulse, especially if it costs more than what you have in your pocket. Second, if you have agreed to have someone manage your money in a certain way, stick to it. Third, think ahead before you make any large purchases. When you do this, more often than not you will see that you don’t need to buy as many things.

I’ve got one of those stupid VISA commercials going through my head where they show how great using a debit card can be. There is one guy who pays cash for something, and he stops the well-oiled machine dead while the clerk gives him his change.

Are debit cards that great?

Sure, there is a convenience factor of being able to use them wherever VISA (or MASTERCARD) is accepted. But that also lets in some badness when it comes to young people and finance.

I love my debit card. I rarely use anything else. But when I’m going to a fast-food place, or any place where it is too easy to make impulse purchases, I prefer to use cash. I only carry a few dollars on me at any time, and I don’t like to make multiple trips to the ATM. I know the availability is there for using the debit, but there is always something that I think would be really cool to have, that is usually slightly more expensive than the amount of cash I have on me. At these times, I’m glad to use cash.

There is another downside to a debit dependence. Every time you use your debit card, you are opening yourself up to possible fraud. If you use cash when you can (and without carrying too much), you are limiting that risk.

At the end of the day, the debit card is an awesome thing, and there may be a day in your lifetime where it replaces cash completely, but I still contend that cash is king, especially for those small purchases.

Is leasing throwing money out the window?

Let me say that I’ve never leased a car in my life. Maybe it’s a throwback to my parents who would keep cars forEVER, or maybe it’s just the fear of making a bad financial choice. But that’s really the question here, is leasing a bad choice?

Let’s take a look at the major alternatives as they relate to young people.

Every PF’er will tell you that CA$H is the way to go. Of course, I agree with that wholeheartedly, and wouldn’t go any further in this post. But let’s face it. Most people won’t do that. Most young people just can’t do it. Here are a few reasons to do it:

- Zero (0%) per cent interest.
- No monthly payment
- You have title (complete ownership)
- More relaxed insurance requirements.
- You can “Pimp your Ride”. Many people don’t know this, but if you are financing your car, the bank owns your car. They usually don’t like people putting on lift-kits, expensive rims, or TV monitors. In fact, doing so could void your loan agreement, making the total amount payable on demand. If you pay your car in cash, this is not a worry.

So why would people NOT want to pay cash for their vehicles?

- They don’t have the money
- Some people finance their cars to help build, establish, or re-establish credit.

The second option is financing your purchase. In this scenario, you are buying a car, but using the bank’s money to do so. You pay a monthly payment that includes interest as well as principal, and at the end of the term, you own a car. This is what I usually do. I don’t mind making a car payment, especially since the car payments I make are very small. I don’t particularly care for expensive cars, and I like to put a hefty chunk down on the car. Some of the pros are:

- By financing your vehicle, you are building credit.
- If you are getting a really good rate, you could take money and save or invest it at a better rate.
o For young people, this is less of a benefit since you will probably not get the best rates.
- You can afford to make payments, but you might (probably can’t) afford to buy a car outright.

Some of the reasons against financing a vehicle:

- You are paying interest on something that is losing value.
- It is too easy to justify buying a car that you really can’t afford by justifying making the monthly payment.
- You are required to have added insurance on your vehicle for the term of the loan.
- In many cases, you have to get permission to take your vehicle out of state or out of the country for trips.
- You usually can’t modify your car in any way until it is paid off.

The final choice is to lease. Some people equate leasing to an extended rental agreement. I think that’s as good a definition as any, but it isn’t strictly accurate. When you lease a car, you are paying a leasing fee, and getting the option to buy the vehicle (at a reduced price) at the end of the lease or of turning in the car and getting something else. Of course, you lose any money you have paid into the car, but for some, this is not a deal-breaker. There are some advantages to leasing a car.

- The payments are usually significantly less than purchasing a car.
- You aren’t buying a car, so you aren’t buying a depreciating asset.
- If you don’t like a car, you aren’t married to it. Just turn it in.

Of course, there is a down-side as well:

- You are paying a lot of money for something you don’t own.
- You are limited to the number of miles that can be driven without a penalty.
- No matter how much money you are putting into it, at the end of the lease you have to almost start over if you want to buy the car (this is the residual or discounted price you get to buy the car at).
- Lease Buy-outs are a pain in the neck to do if you finance the buyout.
o You have to pay sales tax on the residual
o There is A LOT more DMV paperwork
o Many loan people at banks and credit union screw these up regularly.

Overall, for young people, I strongly urge to stick with cash. If that is absolutely not an option (and that is rare indeed), then I recommend financing a purchase. Leasing has its place; I just don’t think that place is with young people.

Check out MySpace to see why. Also check out the ad.

I can’t believe the strange week I’ve been having! Right around the time I FINALLY win that over-seas lottery (that I can’t seem to remember entering), a good friend (that I don’t remember ever being friends with) opens up and confides that his uncle, the Most Exalted Muckity-Muck of BFE, needs help that only I can provide. If that weren’t bad enough, the government thinks I committed a crime that may put me in prison for life! My bank has decided to help prove that I’m innocent. They sent me an email saying they need me to give them some of the numbers on my debit card so they can release my information to the police and clear my name. I think I may have to send a dollar and the addresses of 10 of my loved ones to get 10,000.00 blessings. Maybe then life will be good again.

When I was young, it was chain letters. If I remember right, the letter would have a list of names and addresses on the top. I was instructed to take the first name off the list, replace it with my name, make 5 copies of the letter, and send them to 5 friends. Because I was taking someone’s name off the list, I should send them a dollar. The claim was that this would make me thousands in a few days.

Today, there are way more opportunities for crooks to screw me out of my money. Well, not me, they figure I’m hip to their game. Instead, they go after my parents (senior citizens), and you. They figure old people are trusting, have much moolah, and are gullible (possibly even senile). They figure you just don’t know any better.

Here are a couple of really popular scams that I’ve seen over the past. Keep in mind, some details may change, but the meat of the scam is the same.

– Nigerian Prince. This one boggles my mind that it ever works. You get a letter or email from someone who has an uncle that is a prince of some tiny village in Nigeria. There is a rebellion going on, and he needs to get his money out of Africa so he can have it when he goes into exile. He wants to send you some money to hold for him, and when he gets to a safe place, you will send him his money back, keep millions for yourself as a reward, and everyone wins. Doesn’t sound too good? Wait, it gets better.

You get another email a few days later, explaining that there is some sort of problem with the transfer. Since the prince is liquidating all of his assets, you need to pay the fee, bribe, whatever to complete the transfer. Once you send a few hundred (or thousand) dollars, the money will be returned the NEXT DAY. But wait, there’s more.

You get an email from the Nigerian government. You have been the victim of a scam. They can get your money back, but you need to send them a fee (less than you lost originally). Upon receipt of this fee, they can release the money back to you, with the apologies of the Nigerian government.

In this scam, they get you twice!
The moral here is simple: You don’t have a friend. If any other stranger asked you for money for no reason, would you give it to them?
So don’t do it here either!

– Over-seas MEGA Lottery. Congratulations, you win the lottery! You have won millions of dollars. They will be sending a check to you. There are only two rules: You can’t tell anybody about this until the lottery company can make an official announcement, and you have to pay a winner’s fee to claim your prize.

A great variation of this is when they actually send you a check with an “overpayment”, and then contact you to have you send them the difference.

The moral here: If you didn’t ENTER a contest, there is no way you won.
If you ever win a contest, and they ask for money to collect your winnings, instead offer that they send you the money, and keep the fee from that amount.

– Oops, I overpaid you. The great e-bay scam. People will bid and win on something you are auctioning. They will send you very real looking (but very fraudulent) postal money orders for way over what they owe you. When you contact them about the mistake, they tell you to just send them a check for the difference and everything works out. Oh, and by the way—the postal money order was either stolen or counterfeit. You lose your item you sent to them, and the money you sent them back.

– What a helpful bank!! Your bank will send you an email saying you are under investigation by the Federal government. They want to help you against the federales, so they ask you to enter some information into their ‘secure’ web site. The information they need? Your account number, PIN number, the numbers on the back of your card, or your bank routing number. If you refuse, they will threaten that you WILL go to PRISON!!

This scam is really bad, because they will often send you email from “spoofed” email addresses, provide a link that looks authentic to a website that may even have the bank brand. It may even provide a phone number for you to call to ‘verify the authenticity’ of the email.

Here’s the truth about all of these scams. People who fall for them look really stupid AFTER the fact. At the time, most of these will seem perfectly legitimate. That’s the hook. Criminals will prey on your fears, your dreams, your desperation, or anything else to part you from your money. This is not a comprehensive list of scams out there. There are new variations of these and others that come out every day.

SNOPES talks about some of these, as does RIP-OFF REPORT. Also, get to know your bank or credit union’s customer service numbers. One standard is they will never ask you to provide personal information in response to an email.

Yesterday I talked about how insurance premiums are calculated. After reading it again, I thought to myself, “Wow! That sucks. Isn’t there something that can be done about this?” Well, there are several options that will help you maximize your savings.

1. Think about your car. When you are shopping for cars, think about the effects on your insurance. Talk to your agent and ask them what this new car will do to your insurance. This may make a difference in whether or not you should buy the car, or if you are even ready to buy a car.

a. Just so you know, the sportier the car, the higher your premiums will be. There’s something really cool about driving the granny-mobile.

2. Choose a higher deductible. Okay, here’s how deductibles work. If you need to make a claim, you will pay a certain part of the total up-front. This is a deductible. We’re going to hope that you don’t get in an accident or get your car stolen (who wants to steal the granny-mobile anyways?), so you will have time to save for that deductible. You need to save that deductible and put in an account that you won’t use except for insurance (car) purposes. If you never, ever make a claim (my dad went about 40 years before he had to make a claim), you just have some extra savings. Nothing bad there, right?

3. Talk to your insurance agent about what discounts are available. Since you are young and possibly still in school, ask if there is a discount for good grades. Of course, this means you have to actually GET good grades, but the savings make it worth it. Some companies just make you take a class. Once the class is over, you get a discount!

4. Be a smart shopper. At least once a year, shop insurance carriers. If you can get a better deal somewhere else, consider moving. Ask your carrier first if they can beat or match, but understand they are a business, and they won’t take it personally if you go somewhere else.

4a. Don’t follow this advice if you have a long and positive history with your company. Example: I’ve been with my same insurance company for well over a decade. My parents are with them, many people in my family are with them. These people really take care of us. They will call us to let us know about potential discounts, problems that might be coming up, or anything else that may be important. They have also given me absolutely exemplary service when it came to claims I have made. Quick service, no hassle with getting paid, not getting low-balled on payment. They don’t need to do this, and most companies don’t, so I’ll pay a little extra because they do.

5. Limit the miles. Do what it takes to drive less miles per year. Carpool when you can. Got a quick errand down the street? Walk. Live close to work or school? Ride a bike. Plan your errands out so you make the least stops and the least driving. You will save money, you will save your health, and you will save the world.

6. Slow down. Wear your seat belt. If you are a more careful driver, you won’t need to file as many claims. As you get years of experience, your insurance premium will go down.

7. Take care of your credit profile. Check your report annually for errors. Pay your bills on time.

The law says we need insurance. The law doesn’t say we need to pay through our blood to have insurance. Look for ways to minimize your premium. I have long believed if you can do something well, and save money doing it, that is a good thing.

I have a 2 year old nephew, and when I go visit his parents, they will sometimes put a movie in for him to watch. He’s got a few favorites: “Toy Story”, the Thomas series (trains with faces), and “Cars”. I have to admit that I really didn’t think I would like Cars. I thought the concept of talking cars (after Knight Rider) was stupid. So one day, I went to my sister in-law’s house, and guess what was playing? I sat down to watch the movie, and it wasn’t bad.

If anyone has two year-olds, you know they go through phases where they can only be appeased by watching the same thing over and over (and over and over) again. This is the case with my nephew. I wound up watching the movie three times in succession. Maybe I’m suffering from some Pixar Stockholm syndrome, but I really like that movie now (the movie loves me, I want to watch the movie. The movie would never hurt…,)

Anyways, aside from talking about Disney movies I like, there is a point to this post:

Insurance.

We all have to have it, and it costs a lot of money, blah, blah, blah. But how are premiums determined? What goes into the amount I have to pay every six months? Glad you asked.

1. Age—Sorry people, but if you are under 30, you are going to be paying more for insurance than the 30-something crowd.

2. Gender—Guys, this one is your own fault. Let’s look at this logically. Women drive to get somewhere. They tend to be more timid about their surroundings, and if someone else can drive them there, they get to be the passenger. Guys however, drive to prove a point. We dominate the road, and we do it as fast as possible. Without clarifying too much, even cars with automatic transmissions are driven with a ‘stick’ when a guy is behind the wheel.

3. Car—Statistically, the more expensive your car is, the more you are going to pay in insurance coverage. That’s because it costs the insurance more money when you do make a claim. Second, there are some types of cars (sports cars) that tend to get into more accidents than others.

4. Location—If there are more cars on the road, there is a better chance that you will either hit or be hit by one. Dense cities charge more for insurance than do rural farm communities.

5. Miles driven—Much like number 4, the more you drive, the better chance there is of hitting something. The magic number here is 12,000.00. More than that, and you will be paying more in premiums. Significantly less than that and you might see a discount.

6. Driving record—Insurance companies hate to pay claims. If you file a lot of claims, they recoup their losses by charging you more. If you file a lot of claims, most companies will just drop your coverage, making you look elsewhere. Tickets come into play here also. If your driving patterns earn you tickets, you are probably not a safe driver (good risk) in other ways as well.

7. Credit Score—A lot of consumer groups have a problem with this one, but I’m okay with it. Here’s how it works. Insurance companies believe (and they are right more than not), that a person who takes good care of their finances and credit rating will also be better insurance risks. To give an example: A person who doesn’t pay their credit cards on time probably doesn’t care about their credit rating. If that’s true, why would you believe they care more about their insurance rating?

In a nutshell, this is how insurance works. You are betting that you will get into an accident, and the Insurance company is betting that you won’t.

I’ve never been so happy to lose a bet!

Okay young people, this one is for the parents out there. Go get a soda or something.

Parents:

You want to do good things for your kids. You want to take care of them and teach them to take care of themselves when you can’t. We all know that, you’re good people.

Let’s say you have some questions about teaching your kids about finance. So you go to your friendly, neighborhood finance “professional”, and ask for some tips to help them out.

The first thing they tell you is to sign your kids as authorized users on some of your credit cards. They will tell you that this nifty little trick will allow them to benefit from your strong credit rating. They will tell you about how much this practice will save them over the years.

The second thing they will tell you is that it is okay to buy their car for them, because you don’t want to negatively impact your kidlet’s debt to income ratio by saddling them with a car payment that (frankly) might be a little more than they can afford.

Here’s a little truth that you need to know:

First, FICO is well aware of this little trick, and as of September of this year, it won’t work anymore. The real truth is, most lenders never put too much stock in this. What this really did was to help your kids get into more debt than they could pay off. The good news is that they won’t be able to after September.

The second item is a little more tricky, but the result is pretty simple. Don’t finance a car (or any other vehicle) for your kid under your credit. Sure, you may save a few dollars, but you aren’t benefitting them at all. About five years from now, they will be in the same predicament, but just five years older. If there is no other option (call me. I know MANY MANY alternatives), co-sign for them, but you want to negotiate this in such a way that the child is “first”, or “on-top” of the registration. Will they pay a little more in interest up front? Sure, but after about a year or so with a great payment history, they can usually refinance the car into their name alone, and take advantage of better rates. This way, when they are ready to buy their next car, you aren’t going to be asked to be on the hook.

Just as in many other aspects of life, sometimes the tough answer is the right one. You don’t want your kid to harm themselves, so the best way to avoid this to make them shoulder more responsibility now, when you are still able to help them. They may not like it at first, but they will eventually “get it”, and that is worth so much more than you may know.

It is freaking hot outside.  My landlord, in an effort to really piss off some previous tenant, must have wrapped this house in aluminum foil, because it is always about ten degrees hotter when its hot, and 10 degrees colder when its cold.

A few years ago, before anybody else had them, my wife and I bought a portable air conditioner.  That is a story in itself, and one for later but it is pretty funny.  Every year, we put it up in our family room and stay cool.  It is pretty efficient, but less powerful than the big units that sit outside a house. 

I’m thinking its about time to crank the thing out, but the electric bill has been very low for us for a while, and I’m not sure I’m willing to give that up yet.  Besides, I have places to go, and I can easily fix it so that I’m not here until it cools down a bit more.

 That’s the thing– every day, there are choices that you need to make that can affect your finances.  The easy thing is for me to break out the AC.  But the easier thing is for me to get out and do the things I need to do.  Of course, the things I need to do cost money, and sitting here doesn’t.

That’s why I encourage young people to think of more than money.  Money is such a small part of my decision-making process.  Not because I have unlimited money to play with, but because there are other factors that are more important, and because there can always be finance arguments made on both sides of any issue.  In short, don’t let money dictate your life!

 Now, I’m getting out of this oven and getting some work accomplished!

I know a few people that belong to credit unions that suck. They are fighting the urge to open accounts at banks because they have it driven into their psyches that banks are evil and credit unions are good.

Some of these people would gladly go to another credit union, but they think they don’t qualify for them. Having worked at several credit unions over the years, I know that there are plenty out there that will allow you to join if you live, work, worship, or go to school in a certain community. If you are a relative of an existing member, that qualifies you too.

My wife just informed me of another qualification that I had never heard of. At some credit unions

YOU QUALIFY FOR MEMBERSHIP IF YOU ARE A MEMBER OF ANOTHER CREDIT UNION

That’s right, if you are part of a crappy credit union, your membership there will qualify you for membership at other credit unions, even if you normally wouldn’t be qualified. Now, I have heard of other “alternative” methods of qualifying for credit union membership, but those involve some sort of shenanigans, chicanery, or other general shadiness (sorry, I love it when you can use an obscure big word to say the same thing as a common small word) that makes me feel a little dirty inside for mentioning. Because I sometimes like to feel a little dirty, here are some of the shadier methods of forcing qualifications;

Join the PTA for whatever community you want to join. I guess the thought here is that you must be a member of the community if you would waste the $5.00 to join a PTA.

Getting registered for a church (generic for religious building) in the area. This usually costs a few donations to the church, but still small.

In the same vein of the first one, some people also show ties to a community by joining booster clubs, lodges (Elk, Shriner, etc) and calling that work. This only works if you catch a New Accounts Rep asleep at the desk, but I’ve seen it happen more than a few times.

Setting up a buisiness account (DBA or Doing Business As) with a mailing address in the community you want to join, regardless of where your physical address is.

The point is, there is no reason why you can’t find a good credit union. I like using BANKRATE when I’m directing people to credit unions.

And to all those bank people out there, the reason why I’m focusing on credit unions here is because there is usually no “membership” requirement for opening a bank account. I don’t advocate credit unions over banks or vice versa in many cases. In fact, most of the time, I suggest a little of each.

Time after time, I read news stories about tobacco, alcohol, pre-marital sex, and the connections between youth and advertising. It makes me question whether there isn’t just a couple of people writing the same info and passing it around.

The thing that really gets me about these stories is that in all cases, advertising is blamed for young people drinking, smoking, banging, and partaking. Its as if people believe that putting something on TV will compel young people to buy it.

Alcohol companies are bad because they advertise during Supernatural. Tobacco companies are bad because they put ads in Sports Illustrated. Cereal companies are bad because they advertise during morning cartoons. Of course, nobody really cares that there are 50 times as many commercials for personal injury attorneys, trade “schools”, and check cashing places during the daytime than there are for banks (I haven’t done the research, but I have noticed that daytime TV commercials seem to be targeting the unemployed).

My point here is this- Should alcohol and tobacco companies have their feet held to the fire if they target youth? Absolutely!! But what is targeting youth? Do young people still think cowboys smoking cigarettes are cool? Does the “Most Interesting Man in the World” really make young people want to drink more beer? And more importantly, don’t your parents and your friends have more of an impact on you than the others?

Don’t get me wrong, I like to think of myself as interesting, and I don’t always drink beer. But when I do, I drink whatever is coldest. Actually, I very rarely drink beer. Don’t like the taste. I do happen to smoke, but whenever I think of cowboys, I can’t get Brokeback Mountain out of my head. Thinking of a dromedary with a stogie doesn’t make me want to emulate it.

If you are a smoker or drinker, and you are not yet of the legal age to do so, understand that you are just rushing your youth. If you are of age, understand you are wasting your money. Remember when I just mentioned that I smoke? Do you really believe that I don’t know EXACTLY how much my habit is costing me? I’m not talking about the price of cigarettes alone. I’m also talking about future healthcare, and everything else. But I’ve made my choice (and I reserve the right to change my mind when I’m ready), and I make sure that I’m not depriving my wife or family anything so that I can continue that choice.

Don’t blame the advertisers for doing their jobs. They aren’t (most of them) going after you, they don’t care who they attract. Don’t validate (some) adults view that you are stupid. Make intelligent decisions based on your own circumstances. Think of your goals, your budget, your willingness to part with hard-earned money for something that is truly a luxury you don’t need, and the cost in other ways of being irresponsible.

For years, I have been railling against the stupidity of the education system, and the priority that is placed on things that MOST students will never need. I’ve been a strong advocate for mandatory Driver’s-ed as well as mandatory Personal Finance. In many cases, the response was the local bank or credit union sending a cheerleader to sell their products to high school students. That was in the best of circumstances.

Marketwatch has an article, “An ‘F’ for economics curriculum” that talks about the same things I have been talking about for years. Is this new to them? Probably not, but it has also never been a priority for anybody at the federal, state, or local levels.

I know more than a few parents read this blog, and many young adults. This is another call for advocacy here. We need to get this going in our schools. In California, we waste so many hours in school dealing with nonsense. We need to start preparing the next generation for the future. The article scares me. I don’t care that there are 7 states that require finance education, if 43 don’t.

Get involved, contact the local, state, and federal authorities to get mandatory finance education in schools.

The Ithica Journal, Ithica New York
“THE ITHICA JOURNAL”

The Tompkins County Youth Services board is allocating funds to be awarded as Teen Mini-Grants to support teen events or activities planned by young people with support from an adult advisor, youth agency, school, church and/or community organization.
Groups of at least three youth can plan an event and request from $100 to $750 to pay for 75 percent of the cost of a single event or series of events designed by teens for other teens.

I happened to find this while reading the news a couple of days ago, and I wanted to do a post about it then, but I just got busy with other issues.

A lot of communities offer similar services to this. I know the main focus for F4Y seems to be about making money, saving money, etc, but one of the main philosophies of F4Y is to do good.

If you are part of a youth group, or even a group of youth with some burning desire to be involved, you need to look at this. Check with your local government to see if they also offer this kind of funding. If they don’t, find out why.

Young people often get screwed out of this kind of money because they simply don’t ask for it, and some other group does. I’ll give you an example. In my city, an old elementary school was converted to a public park. A group of senior citizens asked for, and got, permission to take most of the old classroom for their own use. Now, there is still a park there, but it has become a senior citizen center. The gym was co-opted, and preference for any event goes to the grey team. Is it fair? No. Let’s face facts: the city council is run by a lot more grey hair than any other color. More of them are more closely identified with AARP than with AYSO.

I’m not trashing the old people here, they simply asked for something. Youth groups should do the same. Get involved in your community. Make it a better place, a place where companies will want to open shops, a place where they will need employees (are you getting the full picture here??), a place where you have a place.

If you have contact information for your community, email me and I’ll put the info up here so your group can easily find out who to talk to about event funding.

Okay, I’ve reflected.  While I still don’t believe that my contest is bad or harmful in any way, I don’t want the image of impropriety.  I’m going to go over the rules one more time, the prizes one more time, and then– that’s it.  For the few No!Spec people out there, I’m sorry if I gave the impression that I was trying to devalue your work.  I understand all too well that for some, work is like our children.

Here Goes

Rules:

1.  Nothing that you can’t show to teenagers.  By that, I mean nothing you wouldn’t want me to show your child or grandmother.

2.  Nothing that you don’t own.  You have to be able to transfer the winning entry over to F4Y.

3.  The entries should evoke thoughts of education, teens, finance, money, etc.  You art people know what I mean.

4.  If you win, your art becomes My cover.  If not, your art becomes my deleted file.  I won’t use it.

5.  If you think your art is too good for this kind of contest, it probably is.  Don’t enter.

5a.  If you think you are too good for this contest or this site, you probably are.  Please leave my site.

6.  I’m not telling you what I want to see.  The whole point is for you to show me what you think of finance, teens, youth, money, education.

The prizes:

1.  Finance For Youth Gear

1a.  There will be several items that aren’t yet available for purchase.  You get these free.

2.  Free copy of the book with your artwork on the cover.

3.  Toothbrush, toothpaste, dental floss.

4.  My thanks, eternal gratitude, and adoration.

5.  CASH!!!!!!!

5a.  For every entry received, I will put cash into a pot.  There is no limit to the amount of cash that can go in.

5b.  Each entry must be substantially different.  Submitting one entry with four different fonts?  Guess what, it counts as one.

5c.  When in doubt, I will ask a disinterested third party whether to count an entry as one or as more than one.  Their decision is final.

The last day to submit entries is June 30th, 2007.  Any entries received after that will be returned, and will not count.  To enter, email me at wil@finance4youth.com

with the subject line : F4Y contest entry request.  Some variation of that will probably also work.  I will send you a file on which submit your entry.

For those of you who feel that this is a slap in the face of a professional, and who compare art to medicine, I never meant to insult you or your work.  I sincerely hope you will get past that feeling.

If I receive no entries by the closing date, the contest will close, and I will go through an alternative process.

Good Luck!

I’ve been doing a little research for the F4Y art contest, and I found a site No Spec website. This site tells students to not enter ‘contests’ like mine. After spending hours reading, I’m not sure I blame them. It seems young, inexperienced, artists get screwed pretty hard by people who want something for nothing. While I don’t think this applies to me, I can easily understand those that do. So have you heard of this movement? Is that the impression I’m giving with my contest? What do I need to do to make sure this is not the perception, while still maintaining my desire to have this done by someone who “gets” my work? Let me know.

I usually don’t talk about finance articles from MSN, Yahoo, or other sites that are out of touch with young people. Most of the time, they are just wrong, or they come down on young people with a ferocity that is rarely justified.

MSN has an article, titled “Why Your Kids Expect to be Rich”, that is pretty interesting. In it, the statistic of 73% of teens believing they will be making more than 100k per year was brought out.

I’m not going to rehash the entire article, if you want to read it http://articles.moneycentral.msn.com/CollegeAndFamily/RaiseKids/RaiseKids.aspxYour Kids Expect to be Rich, check it out. The point is, because we are seeing our parents pretending to be made out of money, and because our parents aren’t having candid conversations with us about money, we have a screwed up view about how much money we will make.

Look, you don’t need to make 100k to have a good life. More people make less than that than make more. Individually, neither my wife nor I make that kind of money. Of course, we don’t want to have to work as hard as it would take to make that kind of money either.

If you are a young person, don’t worry about a dollar amount. No matter what number you pick, you will probably find out that its not a realistic representation of what you are going to need to thrive. Talk to your parents about money, and have an honest conversation. If you need to, come up with a premise that is sure to get them to sit down and talk to you. I’ve found that talks about pregnancy (or the pregnancy of a “girlfriend”) does the trick. Sure, it can be a little embarrassing at first, but once you get into the conversation, its usually worth it.

If you’ve ever seen “Arrested Development”, the show that was way to smart for Fox, you probably saw episodes where the father would send his one-armed friend to “lose” his arm, scaring the crap out of all the kids, in an effort to teach a lesson. The idea is that these kids would think a guy got his arm ripped off because they did something bad. The tag line was always, “And that’s why you never—”. I need a friend with one arm so I can do that to my kids, but I digress.

A little while ago, I got my insurance bill for my car. The amount had more than tripled from what it should be. I knew I had a couple of (bogus) tickets, but none within the last couple years. We went through a whole ordeal with the insurance broker, only to find out it was for a ticket that I never got, but paid for a little more than two years ago.

I have State Farm insurance. My parents have State Farm. Most of my family has State Farm. All together, we have hundreds of years with State Farm. They are not the cheapest, but the few times I have ever needed to file a claim, they never low-balled me, they never hesitated over the claim amount, and they know who I am. They treat me like a good neighbor (sorry, couldn’t resist). I am more than willing to pay a little extra to make sure I never have the hassle of dealing with a two-bit insurance agent that nobody’s ever heard of.

I called a few other companies because I really didn’t like having to pay THAT much more than I should, but nobody came close to matching or beating State Farm, so with them I stay.

There are two lessons here. (As he throws his fake arm on the desk), if you get a good company with competitive (not necessarily better) pricing that is loyal to you, be loyal to them (unless they screw you over, then ditch them!!!). The second one is to obey the laws, not only because very few of us are fortunate enough to live like Paris Hilton, so we would probably end up in jail, but also because breaking the law (speeding and seat-belt), is a HUGE waste of money!

That was the subject line I received a couple days ago. The remainder of the email was very personal and heart wrenching, even for me.

A young reader emailed me that she ran up her credit cards because she had to pay for medical treatment for her and her newborn. This was her first child, the father swore he would stay with her and help raise the child, but his parents thought better of it, and she was trying to maintain a small apartment because living with her family wasn’t an option. Her mother would secretly send her some money to pay for bills every month, but it wasn’t enough.

She said that she had been reading several PF blogs out there, and they all said the same things about how to stay out of trouble, but little or nothing about what to do if trouble came.

I’m not about to argue with her that there are, in fact several great writers out there who do give advice for getting out of a jam, mainly because that’s not what she needs to hear. She needs to hear that she and her newborn will be okay. She wanted to hear that all hope wasn’t lost.

This is a developing issue, but I started by putting her to work. I need more information about her total circumstances, but she needs a new place to live. She can’t afford to live in the same place as she is, because it took a large portion of both her and her boy’s income to pay for it in the first place. Now, she is severely limited in the income area, and she has a large expense. I sent her out to find a place that she could afford to live in, while she temporarily takes advantage of some of the programs that are designed for these situations. Its a little funny: I’m usually foursquare against programs like Wic (just as an example) because they encourage people to remain in that situation by not forcing them off.

This case is a little different.

The next thing she needs to do, is to pressure, with whatever means necessary, her boy, and his family to do the right thing. Normally, that means marriage for a guy like me, but in this case it doesn’t. The guy is such a flake and scumbag, that I wouldn’t wish my worst enemy to have to wake up next to him every day. She does need his money, and if he can’t man-up and pay, then she needs his family’s money.

Once she has some income (and I strongly emphasize that she needs to get a job as soon as she is physically able to), a place to stay, and someone to help with the babysitting at some point, she can worry about taking care of the debt she ran up. Most credit card companies will work with her to make sure she doesn’t have her credit ruined, especially since she is going to make at least minimum payments. Will it take a few hits? Sure, but who cares? If there is no alternative, then she just has to live within the limitations of reality.

I’ve pledged to help her in whatever way I can, but I made it clear that she has to be proactive here. I’ve asked her for some information. If she gets it, and shows some signs that she’s doing the best she can, I will help her. If, she instead decides that doing that much work is too much, then I truly wish her good luck, and success in life. I think she’s ready to get out of the situation, and I understand that its hard with everything else going on, but I cannot undo what has been done without her total commitment.

I wasn’t going to mention any of this here, because I think some things should remain private, but this reader asked me to share some parts of the story (I adamantly refuse to relate all of it). I guess the real world has done little else but make assumptions, pass judgements, and wait for her to fail.

Shame on the real world.

With the market for home buying getting back to normal (I’m sorry for all the “flippers” out there who are experiencing a return to normalcy), a lot of people are now getting ready to buy that house they want.

Buying a house makes good financial sense in most cases. The blogiverse is filled with arguments for and against, so I’m not going to re-hash them here. But just because something makes sense in MOST cases, does that mean it makes sense in ALL cases? Does a good sale price automatically equate to a good idea? My answer is no.

I think buying a house (home) should be a goal for most Americans. I’m sure it should be for other countries as well, but I don’t know the other countries’ housing situation. One of the reasons why the market is correcting itself now is because too many people who weren’t prepared bought a house anyways. Because they couldn’t afford to make a down payment, and because they didn’t want to pay PMI, they got into “alternative” financing (scams). “Alternative” to me, means shady when it comes to buying a house. The reaction was that prices went way out of control, and the sellers rejoiced because they were making money hand over fist. The problem was, eventually people wise up.

So now we have house prices going back to a reasonable level. In some cases, even going below a realistic level. So people are out there trying to buy the house.

For my audience, teens and young adults, I think doing this is a mistake. First, I think there is a level of maturity and experience that one needs to have to be a homeowner that most young people just don’t have yet. I’m not going to go into all the associated financial costs of homeownership, but there are plenty. What I will talk about is the common sense stuff that makes a good argument to waiting before you buy.

1. If you have never lived away from home, it may surprise you to learn that Mom and Dad won’t be there to do everything for you once you buy a house. If you have rented before, there won’t be a landlord that you can call up to fix every broken pipe. Guess who that leaves? You guessed it, you are on the hook for all of it.
- Do you know how to replace a toilet? Do you know how to fix a sqeaky floor? You will have to. The alternative is to hire someone to do this for you, but many people find that shilling out hundreds of thousands of dollars on a place to sleep makes them pretty frugal.

2. I’ve done some pretty heavy work in my life, but I’ve never had to replace stucco. I’ve never had to paint the outside of a house, or replace a roof.
-You want to have some pride in where you live. This is, afterall, your home. If it starts deteriorating, you look bad as a homeowner. These are really big expenses.

3. Paying rent may be throwing money down the drain, but buying a house simply because you can afford to do so is surely more so. When I was younger, I could afford a small house in the really bad part of a really bad town, buy why would I? I would hate where I lived, and if I ever decided to make the step to become a landlord and rent the place out myself, I would only be opening myself up to a whole new world of woe. Its one thing to rent a place in a crappy part of town, because– you’re only renting. Its a whole other story to have actually bought into a really crappy part of town.

There are, of course, other reasons, but these are pretty substantial by themselves. My advice, rent a place that you can easily afford, while you put away some money for a down payment. Learn all you can about home repair and maintenance. Research places that you really want to live. Find out as much as you can about them, and when you have the experience, and the money to do so, reevaluate at that time.

Good Morning!!

Just a few minor updates out there:

1. The contest is on track, and I’m only a little upset that I won’t be able to enter myself! I’m in the process of approving the design on the F4Y gear now, and I think it is pretty darn cool!

2. A zealous friend and associate nominated me for best blog at bloggers choice (www.bloggerschoiceawards.com)! I’m greatful that he would do this, but I have no real aspirations of winning. I am hardly as popular as almost any of the blogs up for the same honor.

3. This just in! I’m adding a super secret prize for the contest. See my earlier posts to see all the things you will win, and imagine winning something else really cool and worthwhile!