Frugal Kids

Frugal Teen buys home

I found this inspiring article over on yahoo.. had to share!

Lindsay Binegar was 14 the first time she spent any winnings from years of showing hogs. She bought a purse. The second time, at 18, she splurged. She bought a four-bedroom, two-bathroom house with a two-car garage. And she paid in cash.

“I’ve never heard of a teenager buying a house,” said Nikki Gasbarro, spokeswoman for the Ohio Association of Realtors. “Smart girl.”

The Greenfield teenager has been saving money since she was 4 years old and won $100 showing a hog.

“I didn’t get the money; it went to the bank,” said Binegar, now a 19-year-old freshman at Ohio University’s Chillicothe branch.

And so the pattern began. She’d raise a few hogs every year on the family farm in Highland County, show them at competitions and add any winnings or sales proceeds to her savings account.

“She’s pretty tight,” said Lindsay’s dad, Gary. “She’s always been big into 4-H, and every penny she made she just banked.”

That included $15,540 for showing the reserve champion and grand champion hogs at the county fair in recent years.

By the time she graduated from Greenfield McClain High School last June, she had saved more than $40,000 for college.

But her parents had a proposition: They’d pay for college if she’d live at home and commute to Ohio University’s Chillicothe campus.

The idea appealed to Lindsay’s thrifty, practical side but left her wondering how to invest the money she’d saved.

Her dad, who runs Binegar Auction Service, had a suggestion.

“I said, ‘You should buy a house,’ ” Gary Binegar said.

“I was like, ‘Oh, Dad, that’s a lot of money,’ ” she said.

But in August, Lindsay bought a house when her dad was auctioning one as part of an estate sale. She paid $40,000.

After painting the inside of the two-story frame house and adding new carpeting, Lindsay rented the house to a great aunt and uncle who wanted to relocate to Greenfield.

Walter Molony, spokesman for the National Association of Realtors, said it’s extremely unusual for a teenager to buy a house.

Lindsay’s dad, it turns out, did something similar – but not as grandiose – when he got out of high school. He bought a house, too.

“I paid $7,000 and there was 3 feet of snow in the living room,” he said.

He fixed it up, rented it, then sold it and bought the farm where he, his wife, Mandy, and Lindsay now live.

Mr. Binegar, 44, isn’t sure why his daughter is so fiscally responsible at an age when many teens spend every cent they get.

Then again, it fits her personality. She’s always been at the top of her class academically. She volunteers each Friday at an elementary school to further her dream of becoming a teacher. She has been involved in 4-H for 11 years, was a cheerleader and was crowned homecoming queen her senior year of high school.

“We tried to lead her in the right direction and make her know the value of a dollar,” her father said.

Lindsay said she hopes to finish college in three years, get a teaching job and raise a family in her hometown.

“I would never move out of Greenfield,” she said. “I just love everybody here.”

She’s saving the $450-a-month rent payments from the house so she and her 22-year-old fiance, Heath McNeal, can buy a small house when they get married in 2011.

Eventually, the couple wants to buy land and build their dream home on top of a hill.

Her father has no doubt that’ll happen.

“She’s got a really good head on her shoulders,” he said. “She’s the perfect girl.”

Save thousands in college tuition and graduate early, here’s how.

Tuition costs for high school graduates entering college have gone through the roof, and there are no signs that this will change any time soon. What can you do to save hundreds if not thousands on college credit hours and give yourself or your kid a head start in graduating early? Below, I will discuss the numerous benefits to high school students who participate in earning college credit hours (also known as Transfer credit, credit transfer or advanced standing) and how you can go about enrolling yourself or your kids in a similar program at your local high school. Moreover, I will provide some other tips to keep the cost of college tuition as low as possible.

Before we get started, let’s look at exactly how fast tuition costs are rising with these staggering facts from finaid.org:

“A good rule of thumb is that tuition rates will increase at about twice the general inflation rate. During any 17-year period from 1958 to 2001, the average annual tuition inflation rate was between 6% and 9%, ranging from 1.2 times general inflation to 2.1 times general inflation. On average, tuition tends to increase about 8% per year. An 8% college inflation rate means that the cost of college doubles every nine years. For a baby born today, this means that college costs will be more than three times current rates when the child matriculates in college.”

By participating in the high school college credit courses you can gain college credit hours for the courses you already have to complete while in high school. There’s typically no additional work! However, some of the courses offered are Advanced Placement courses. When I was in high school I was able to earn 15 college credit hours through basic level courses that were a required part of my high school curriculum, thus saving a couple thousand dollars. Not to mention, that’s over a semester head start. Instead of taking 4 or more years to graduate, you can graduate college in 3 to 3 and half years. The cost of the courses are typically half the cost of the University or College, and many are free.Not to mention, you don’t have to pay for books!

It helps to know which school you or your child will attend in the future to make certain they will accept your coursework. The high school guidance counselor should be able to help you or son or daughter lay out a simple plan that’s best for them. In addition, you should consider dual enrollment in which they can attend the community college or local University in conjunction with their high school classes to earn additional college credits. You could potentially knock off a year or more of college! If you’re having trouble getting help from the high school counselor, go to the University or college they believe they will attend in the future, the admissions department should be able to help.

Along the same lines, students should seriously consider the savings to be had in attending a local community college for their liberal arts studies. In essence, with a four year degree, the first two years (associate degree) are dedicated to basic studies across all areas (to make a more well rounded individual), it really doesn’t make sense to waste money at a prestigious school with hiked tuition rates to take basic level courses. Instead, get your basic course requirements fulfilled for half or even a quarter of the cost at larger universities. Then take your major and minor related courses at the bigger and more well known Universities. One of the major perks to attending community college is the chance to try it out, so many people waste a ton of money going to school for a year, just to quit. State Universities offer significant value as compared to the private Universities. Think of it this way, if you’re going to go to some private Ivy league school on the East Coast, and move back to the Midwest to work after school, many people won’t know or care that you spent 5 to 10 times on your education, only that you have the degree needed for the position. On the other hand, if you’re going to stay around the area you went to school, it may make sense to pay for the “better known” name and schooling.

Make saving money fun, like a game

Too many people think being frugal is no fun, but it doesn’t have to be that way. You can make being frugal fun and enjoyable by taking the time to retrain your brain and see the upside in not spending frivolously, and the rewards that come from waiting.

Instead of thinking I must have that new TV or new car, think, If I can just hold off for a while longer, I will be way better off. By saving up and paying cash for large purchases, you will avoid the ridiculous interest charges and actually make money on the money you’ve saved.

Instead of setting a weekly budget of say $25 for lunch during the work week, ask yourself if you can make your own at home for the entire week for $10 or less. Make it a game you play with yourself or your family, to see who can save the most money while getting the most out of what you need. You can do the same for breakfast and dinner. How good can we eat for the least amount of money? Figure out what you want to eat for the week and set out to find the best deals on those products. Take the difference in what you would have spent and throw it in a piggy bank for a month. You will be surprised to see you can have fun while saving hundreds!

Get the kids involved too, it well help teach them that being frugal can be fun. Decide on a reward for yourself or your family and sock the rest away in the bank or invest it. Make goals for saving X amount of dollars, and the reward that goes along with meeting a certain goal. Take the grocery example, say your plan is to reduce your food bill by $300, if you reach your goal, you get to take half of it and spend it however you want. Maybe you only save $200, but still there is the reward and you’re better off in the long run.

Consider other areas of your life in which you overspend, and make a similar plan. You will soon grow to be thrilled when you find excellent deals, because you know you’re doing the best you can and saving a bunch of money.

Create a competition between you and your spouse. Give a bonus award to the winner. You will learn from each other. Involve the kids too if you have them. Maybe you give them an allowance, offer perks for them saving money – like an extra few bucks if they save a certain amount of money.

Being frugal can be fun if you approach it with the right attitude and rewards structure, it’s really up to you. When you move away from materialism, the little things seems to be so much more meaningful. Not to mention, the healthier foods seem to be less costly! Good luck!

Five-year-olds to be given compulsory lessons on money, savings and debt

Now here’s something the UK is doing that we should be doing here in the states, giving compulsory lessons to children on money management. Check out this article I found here on the telegraph, that I thought was so neat I would share it with you. Parents in the US should push for this education for their children, in the long run it will benefit them by having financially savvy kids.

Children aged five will be given compulsory lessons on managing their finances from next year as part of a range of new measures for primary schools.

Ed Balls, the Secretary of State for Children, Schools and Families has disclosed details of the new programme, which starts with lessons on how to save money in a piggy bank.

Mr Balls is also expected to announce a £50m fund for schools to intervene with extra lessons if six or seven-year-olds fall behind with basic Maths or English.

In a joint pledge with Gordon Brown to be unveiled on Monday, he will promise that, from September, schools will provide small group tuition or one-to-one help for “those furthest behind”.

He will also urge primary schools to teach at least one foreign language from September – a year ahead of the current deadline.

Lessons about current and savings accounts and how to budget will be compulsory from all school pupils from September 2011 as part of a new personal, social, health and economic (PSHE) curriculum.

Between the age of five and seven, they could be taught to identify different coins and notes, and how to save money.

From seven to 11, youngsters could learn about managing bank and savings accounts, and how to budget.

In secondary schools, from the age of 11 to 14, pupils could be given lessons on credit cards, mortgages and loans, or about managing household finances, such as bills.

And 14-16-year-olds could be taught about debt and how money problems can affect people.

Mr Balls said: “It’s really important that we teach our children about pensions, responsible saving and effective money management.”

Martin Lewis, creator of MoneySavingExpert.com, said: “Finally we’re getting somewhere. We encourage our youth into debt when they go to university, but the disgrace is we’ve never educated them about debt.”

However, Matthew Elliott, chief executive of the TaxPayers’ Alliance, said: “Ed Balls is as much an architect of our financial woes as Gordon Brown is. The idea that he is trying to teach kids about financial management is an early April Fool’s joke.”

Latest figures show that the average student debt stands at around £15,812. Recent studies have found that the burden of debt, accentuated by the recession and high levels of unemployment, has created a new generation of “mummy’s boys”.

Mr Balls said the latest pledge on “basics” included the promise that “teachers will be empowered to decide what support is best for each child”. Extra support “could include specialist reading and number help or support from a dyslexia specialist”.

Mr Balls will also pledge that pupils aged between seven and 11 should have the chance to learn a foreign language in class time.

Presently, eight per cent of primary schools in England and Wales do not offer any foreign language lessons even though one in seven pupils does not speak English as a first language.

There is no restriction on which languages primary schools will have to teach, but some have already opted for so-called ‘community languages’ such as Urdu or Polish which are often spoken by a majority of pupils.

Mr Balls added that pupils of all ages should be able to learn languages favoured by employers, such as Mandarin. He said: “In this new decade our ties with emerging economies like China will become even more important and it’s vital that young people are equipped with the skills which they need, and British businesses need too, in order to succeed in a rapidly changing world.

“That’s why we want all secondary pupils to have the opportunity to learn up and coming languages like Mandarin if they choose, either at their own school or a nearby school or college.”

Michael Gove, the shadow education secretary, said: “This government has overseen a catastrophic decline in modern languages and this latest announcement inspires little hope of turning it round.

“There doesn’t appear to be any money attached to this scheme and there is such a severe shortage of teachers in subjects such as mandarin and Urdu that it’s difficult to believe that this is anything more than just spin.”

Persuading family members to buy bonds or investments for gifts for your kids

It has gone too far, way too far, and I’m certain many parents will agree with me. Everyone buys my kids presents for Christmas and their birthdays, and  I’m truly grateful – don’t get me wrong – but my family is wasting their money. That’s because everyone is buying them toys that end up broken and thrown away in less than 2 weeks, some in less than 2 days. I am determined to change their ways, and persuade them to use the money that they’re wasting on toys and put it towards the kids’ future. I’m not sure why the culture has changed so much in so few years, as my grandparents were sticklers about buying us all savings bonds for Christmas and Birthdays. I was able to pay for my student exchange program in high-school which cost several thousand dollars (which I loved and will never forget) and traveled and spent over a month in Costa Rica and was able to see and live in another culture broadening my personal makeup. I would have never been able to do that if my grandparents had purchased toys for me instead. Not to mention, I had a portion of the money left over to help out while at college.

Below, I will give you various reasons to help you help persuade your family members to not buy your kids toys (or you crappy sweaters), rather put that money into purchasing investments that will help the kids well on down the road. If they must buy toys, I will provide a list of toys that will be beneficial to the kids futurre. Below that list, I will provide you with the resources to purchase t-bills or bonds for your kids online, directly through the US government.

The Best reasons for not buying kids (all) toys for holidays and birthdays:

• Most of the toys made are plain crap. If the kids don’t break them on their own, they lose pieces that make the toy worthless and unusable after only a day in most cases.
• Most toys’ safety has been called in to question. Don’t get me wrong, I’m not a freak about lead paint or the likes – but it does concern me. With the young kids sticking everything they can in their mouths, I like to think we’re being as safe as possible, but it’s difficult when most product recalls only happen after someone is injured or killed.
• In 2005 in the U.S., 20 children under 15 years of age died in incidents associated with toys, and an estimated 202,300 children under 15 were treated in U.S. hospital emergency rooms for injuries associated with toys, according to data from the U.S. Consumer Product Safety Commission’s National Electronic Injury Surveillance System.^[4]
• Toys that are bought for the older kids are inevitably unsafe for the younger kids.
• Most of the toys bought discourage the kids from being active (especially video games). These toys encourage the kids to be lazy and unproductive. Not to mention, they encourage the parents to push the kids off.
• How many Hot Wheels does a kid need? I swear my 4 year old has hundreds of them. I encourage other children who come play at my house to take some with them when they go home.
• We don’t have the room for the toys. Yeah, the race tracks are useless because we can’t possibly keep them up when they take up 10 square feet. Not to mention, they take half an hour to assemble and 30 seconds to pull apart. Please, don’t put us through this pain in the ass.
• Swords and guns: The kids beat the hell out of each other and we take them away anyway. Please, don’t even think about it.
• Are you really into supporting China through purchasing all their crap? Come on, Communist China? We need to support our own.
• They don’t even have to go to the store if they quit buying the toys.

Now, some grandparents and family members won’t listen to you for shit. You can simply take these toys and re-gift them for all your kids’ friends. You can replace their re-gifted gift with an deposit to their savings account or buy them a bond or such. If all else fails, encourage your family members to buy your kids the following gifts instead of toys:

• Educational books
• Music and Educational CDs
• Board Games (fun for family night)
• Outdoor games or sports equipment
• Hiking, camping, fishing gear
• Roller Skates
• Play sets
• Basketball hoop
• Pretend play toys

If you’re a lucky one, and can convince your family not to waste the money on the toys, or convince the different family members to take turns buying educational toys, here is how they can buy t-bills or bonds through our government (If you don’t live in the US then check your treasury department for information). Maybe you don’t think bonds are the best investment, they can start them a custodial investment account with no deposit required through a number of different brokers (check out how to do this here in another article I wrote):

The below info is from the Treasury-Direct.gov website of the United States.

You can give savings bonds for any occasion or purpose – like birthdays, weddings, or graduations. You can buy gift bonds in several denominations and choose either electronic or paper form.

Buy Electronic Gift Bonds at TreasuryDirect

To buy an electronic savings bond:

• You must already have a TreasuryDirect account.
• Use the Gift Box functionality to buy gift bonds.
• Keep them in your account until you’re ready to deliver them.

To give an electronic savings bond, you must know the recipient’s:

• Full name
• Social Security Number (SSN) and/or taxpayer ID number
• TreasuryDirect account number

When the bond is delivered to the recipient’s TreasuryDirect account, he or she will get an e-mail announcing your gift.

You must be 18 or older to create a TreasuryDirect account and to buy gift bonds. A child under 18 can get gift deliveries in a Minor linked account.

Buy Paper Gift Bonds at Financial Institutions

To buy paper gift bonds:

• Visit any financial institution, fill out the purchase application, and pay the cashier.
• You’ll receive your bond within three weeks. If you’re making a last-minute purchase, ask the financial institution to mail the bond directly to the recipient.
• Ask for a gift certificate or download and print one below.

If you don’t know the recipient’s SSN, you can use your own SSN. Should this happen:

• Your SSN will appear on the bond. (The first five digits of your Social Security number will be masked and replaced with asterisks).
• You’ll incur no tax liability.
• It won’t be used toward your annual purchase limit.

Gift Certificates

Gift information can’t be printed on savings bonds. So announce your savings bond gift with a gift certificate.