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Millionaire Kids Ezine, Issue #020 - 6 Steps on How to Help Your Kids Survive a Recession
October 31, 2008
Should You Talk to Your Kids About Recession Survival Tips?
Welcome to the 20th issue of the Millionaire Kids Ezine!
First of all, I'd like to apologize for this ezine coming out a week late. But I have a very good reason I'd like to share with you.
A producer from the Oprah Winfrey show called me! They were looking for parents with questions for Suze Orman, Financial Goddess, about kid-related money issues.
Thank you very much to those of you who responded to my last minute email with excellent questions...and some precious family pictures!
And also for your many gracious “Congratulations” and well wishing!
I was honored to help and hopefully I'll see some of you on the show!
Now on to more serious business about how to talk to your kids about surviving a recession...
How Much Should You Tell Your Kids About the Economic Gloom & Doom?With all the grim economic news lately, what should you tell your kids about the economy without scaring them? And more importantly, how do you prepare them to cope and thrive in a recession?
Of course, it depends on the ages of your kids. But even elementary aged kids can understand pretty safisticated money issues.
Here are 6 Tips for Guiding Your Kids Through Surviving a Recession:1) Have the Money Talk: Signs of a recession or an economic downturn may be an adult worry, but it doesn't mean that your kids should be left out of the discussion!
It's important to talk to your kids about finances – even elementary age children.
My oldest daughter Rachel, a Senior in High School, is taking an Economics class right now. Talk about perfect timing?! She's hearing a lot about “recession.” But she really didn't completely understand what a recession is.
The definition of a recession is: A modest & temporary decline in economic activity. Economic activity basically means the buying and selling of goods and services.
A lot of teens don't understand how credit works. Explain how interest works with simple examples. Like how you pay interest to the bank when you take out a mortgage to buy your house.
Banks lend money and charge you a fee, or interest, and they use the home as collateral in case you stop paying.
2) Show Instead of Tell: Kids learn best about money with a “hands-on” style. Show your kids pay stubs and bills to help them conceptualize where money comes from and how it is spent.
You could even have them watch when you write checks and pay bills online.
3) Lead By Example: Especially during a recession, it's important for kids to learn how to live within their means. No spending money you don't have!
Show your kids what a budget is and how you try to live within that budget.
If you clip out coupons for the grocery store, have your kids help out. It could become a fun game for elementary aged kids – kind of like a scavenger hunt.
If you're baking from scratch more to save on the cost of food, recruit your kids to bake with you. These are great ways to show your kids how to live within their budget.
Especially during a recession.
My own kids know I won't buy certain brands of cereal unless they're on sale. They make a fun game of searching for the sales or coupons on their favorite, (sugary of course!) cereal.
4) Pay Yourself First
Cash is king during a recession. It's important to stress to your kids to save up for "emergencies" during both good times and not so good times.
So save and invest religiously!
If you give your kids an allowance, instead of a $10 dollar bill, give a $5 dollar bill and five $1 dollar bills so they can set aside money for saving, spending, and giving.
But it doesn't have to be all gloom and doom!
Encourage your kids to save for something special for themselves, or perhaps help save up for family events – like vacations or a trip to an amusement park.
This way, they understand costs and limits. But they can still save for FUN!
Another way that children learn about money is by watching how you work and what it takes to make money.
Many successful entrepreneurs got their start at ice cream shops, movie theaters, or right at their on kitchen counter — and learned to be confident, self-reliant, and a team player.
I often give my kids advice on how to start a small business and make money on their own. Some times they listen – some times they roll their eyes! Starting your own business and seeing an idea through from start to finish is an excellent learning experience for children.
Plus, it helps them get in the habit of thinking creatively and being innovative — both useful skills to have in times of economic depression.
Recessions tend to weed out a lot of competitors, which leaves the field wide open for you.
Some of the most profitable businesses were started when the economy is in a slump.
5) Don't be afraid to share your struggles
Parents are not perfect. We make a LOT of mistakes. I always tell my kids that I like it when they make a mistake, because that's when the real learning begins. Share with your kids how you've handled a difficult situation or problem. And what you learned. If you're open and honest, it will help instill inspiration and confidence in your kids.
Now that money is tighter, you may not have as much money to spend on your kids, so encourage your kids to get a part-time job.
Many parents don't want their kids to get a job because they want them to focus on getting good grades.
I guarantee – kids who do not have a job DO NOT spend more time studying. Teens who have part-time jobs manage their time better.
So I hope you'll help guide and prepare your kids with these recession survival tips.
But the most important thing to tell your kids any time is how much you value them...and how much you love them.
Money will come and go...love lasts a life time.
How Kids Can Make A Little CashDoes your child like to act? Sing? Dance?
Is she a little "ham" when you pull out the video camera?
Then maybe you should consider doing some FREE casting calls for movies or commercials.
A friend of mine's 8 year old son is modeling a new clothing line for 2 days...for a cool $1,200 dollars!
There really is some fun money to be made in child modeling if you put in a little effort. Here's where you can find lists of agents and directors looking for children right now...
Or maybe you want to try on online portfolio for worldwide exposure? Here's a safe, free website to check out...
Remember, you should never have to pay an fees or upfront money for a modeling agent. They earn a commission 10% to 20% on any work they secure for your child.
And they get paid after you get paid.
Profitable Investment Idea:The stock market has sure been a wild ride lately!
As most stocks are falling, this stock actually went UP.
It's Campbell soup.
You see, during times of trouble, people turn to comfort food like good, old fashioned soup. And it's also a cheap meal in one!
Stocks to avoid during a recession are:
Big ticket items
Telecommunications - cell phone companies
Random Acts of TithingThe food shelf is really hurting right now. And during the winter, people seem to need even more assistance.
Most grocery stores have a container to donate food on your way out.
Drop in a can or two of soup on your way out. It'll only set you back a few dollars. And you'll feel good about helping someone else feel good!
It's Good to Know...Financial Terms For Kids1) A modest & temporary decline in economic activity
2) A percentage paid when you own a stock
3) You'll find this at the end of a rainbow!
Answers: Recession, Dividend, Gold
Cheap Travel TipOur family often goes on vacation with other families. There's usually a gang of about 19 of us!
Lots of aunts, uncles, and cousins!
Did you know that you can get a group rate of up to 20% to 30%? All you have to do is ask.
It really pays off if you're buying air fares as well as hotel reservations.
You have to have a group of at least 10 to get a group rate discount. The larger your group - the more the discount.
Every little savings helps!
So until next month...
Have a blessed November...
Best, Sonja Mishek
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