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Color of Money Book Club

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Michelle Singletary
Washington Post Columnist
Thursday, July 6, 2006; 12:00 PM

Michelle Singletary hosted author Janet Bodnar for a discussion about June's Color of Money Book Club selection -- "Raising Money Smart Kids: What They Need to Know About Money and How to Tell Them."

Michelle writes that she has always liked the way Bodnar approaches the topic of kids and money. Of course, that could be because she agrees with a lot of what she advises, such as banning credit cards for teens.

A transcript follows.

Read Michelle's past Color of Money columns .

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Michelle Singletary: Hey, hey. I'm back. Back from vacation that is. Had a blast!

I know you all missed me. Even my critics cuz who did you have to criticize :)

Well let's get started. Lots of questions to get to.

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Kids/iPod: My sister has a daughter who just turned 12 and whom I consider to be my daughter. My niece wants an iPod. She initially wanted her parents to get her a used one ($150 or so). I believe that it's too early for her to own an iPod, which I consider a toy for adults and told her to wait for a couple more years.

My sister, on the other hand, wants to get her daughter a new one. Her dad (divorced from her mom) shares my views but, knowing that his daughter will get one anyway, wants her to find a way to finance it on her own, either by using her savings or babysitting kids for money. Whose opinions do you think is best for this child? She generally has all the latest toys.

Thank you for the discussion.

Janet Bodnar: Frankly, I agree with you that a 12-year-old is young for an expensive piece of equipment like an iPod. But if she is going to get one, I wholeheartedly agree with her dad that she should buy it with her own money. In fact, I've written whole columns on how an iPod is a great teaching tool for kids on how to save, and how to be a good consumer. First, they have to decide which iPod model they want, and how much they're willing to spend. Then they have to figure out a way to get the money--saving their gift money, babysitting, doing extra chores, using their paycheck if they're older and have a job. And once they actually buy the iPod, they're more likely to take care of it because they literally have their own money invested. It's not just a freebie from their parents (or their aunt!) that they'll lose or toss aside when they get bored.

Michelle Singletary: Oooh such a great question to start this chat off. And since I'm in a good mood having just gotten back from vacation I'll behave myself and only say listen to Janet.

Me I wouldn't let the rugrat get an iPod with her money, your money, her mama's money, daddy's dough...well you get the point. Too expensive a toy for such a young child.

At least I wouldn't unless that child's college fund is full of big time cash.

Oops. I promised to behave :)

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Atlanta,Ga.: Where can I obtain Ms.Bodnars book as a reference for teaching middle and high schoolers the art of money managing?Great job!

Gary B

Michelle Singletary: Well if you're an educator send me an e-mail and I'll send you a free copy. I just adore teachers.

As you know we give away a limited number of books with each book club.

I say that because don't you all send me an e-mail asking for a free book. Most have already been given away :)

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Fort Washington, MD: Welcome back!!! I hope you had a wonderful vacation. I just paid off my VISA. Yippee!! The new ad campaign says Life takes ViSA needs to read VISA takes life.

We give our child an allowance. She donates money to the church and other charities, saves some and spends the rest. High school is right around the corner what should we do to prepare her?

We are thinking of getting her a cell phone since she is getting in more out of school activities. I was thinking we should share the cellphone so that her friends realize that they may be calling, leaving messages and text messaging her MOM.

Thank you!!

Michelle Singletary: I'll happy to be back (well a little. I love the beach so it was hard to leave).

Anyway, good for you for paying off that bill. And I think you are right CREDIT CAN TAKE LIFE.

As far as a cell phone. I say DON'T DO IT!!! Well don't do it UNLESS you are fully funding your chid's college fund, your retirement fund, have three to six months living expenses etc.

Go back and read my columns about cell phones.

And if you want to prepare your kid financially have her read Janet's book (and you too!).

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Hoboken, New Jersey: I just got married this month. My wife is doctor and with that are student loans. These loans look like a shyscrapper. We are renting, but look to buy something in the future.

My question is:

How does one magange this kind of debt.

Are there resources out there that can help.

P.S. Nice to have you back

John Caulfield

Michelle Singletary: Thanks. As I said wonderful to be back. I love these chats and am very grateful to have all of you join me on a regular basis.

About that debt....Whew. Take a deep breath and pay. Unless your wife is willing to serve in the military or perhaps work in some underserved areas that debt is yours for years to come. I hope she consolidated before the rates jumped recently.

But you know with careful planning and watching your expenses and paying more than what's required you can climb that skyscraper (or should I say knock it down) AND buy a home. Just budget, really budget well.

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Phoenix, AZ: I love your columns, Michelle, and am using them as motivation as my husband and I try to get back on financial track. Though we don't have kids yet, we do have a theoretical argument going--should kids receive monetary rewards for good grades? My parents always gave us a small reward ($10 for all A's, $5 for A's and B's), but my husband's parents did not. I never consciously worked to get the money; it was just a nice reward at the end of the semester. Howver, my husband thinks it's abhorrent to "pay" kids for good grades, while I think it illustrates what happens in "real" life--do good work, be rewarded financially. What do you think?

Janet Bodnar: I don't think kids should be paid for good grades. You want them to do well in school because of the personal satisfaction they get, and because they do their parents proud. In the long run, a big hug and kiss from you go a lot farther than a $5 bill. You can't really control a child's behavior with money anyway, because you have to keep upping the ante--and eventually the effect wears off. If the kids come home with a great report card, taking them out for a spontaneous reward, like dinner at a favorite restaurant, or a trip to Ben and Jerry's, means a lot more. After you've given them that hug and kiss, of course!

Michelle Singletary: Amen Janet. Sorry but I side with your husband too. I just don't think you should pay kids for grades, chores or anything else they should do because well I tell them so :)

Seriously, I get what you are saying and why your parents did what they did. But often we try to introduce adult concepts to children when we don't have to or shouldn't. Sure we adults get paid for our work. But that's different than a child going to school and striving for good grades because that's good for them not just for employment sake.

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Houston, TX: Hi there-my husband and I are planning to start a family within the next year. What age would you suggest is appropriate to begin teaching small children about money and what approach would you suggest?

Thanks!

Angel

Janet Bodnar: The time to start teaching kids about money is when they start asking questions about it. By "questions" I mean things like, "Can I have that toy I see on TV?" or "Why can't you just get money out of the bank machine so we can go to McDonald's?" Just give them simple, age-appropriate answers, like telling them the money doesn't just pop out of bank machines. Tell them the bank is just like a big piggy bank for Mom and Dad, and just as their piggy bank is sometimes empty, so is yours until you put your paycheck in. It's a simple way of giving them a financial lesson. Also good for young children are fun savings banks that double as toys. And you can let them pay for things at the dollar store, or deposit coins in a vending maching so they get a feel for the different kinds of coins. Just keep it simple and don't push them into things they're not ready for.

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Arlington, VA: Hi Michelle,

I have about 10K in a passbood savings acccount which, as of today, is earning 1% interest per year. Unacceptable. Where can I get the best return on these funds, while keeping them very liquid? I expect to retire soon and may then need to withdraw some or all of the savings in less than a year.

Michelle Singletary: Oh my child get thee to the internet. There is no reason with rates rising that you should settle for 1 percent.

Go to www.bankrate.com. And look up some of the best rates on savings accounts. Many will be offered by FDIC-insured internet only banks, such as ING.

Go, now -- well after the chat-- and move that money to something offering a higher rate.

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Washington, DC: Welcome back Michelle.

I just want to say thank you for addressing this topic. I am a 40 year old pregnant first time mom. I plan to read this book to my child while it is in the womb. Many of today's teenagers and young adults feel entitled to their parents' money for whatever their hearts desire-trinkets, cars, apartments, and down payments on homes. Many--not all--of these teenagers and young adults don't understand what it takes for parents to earn and save money; therefore, these young adults are not financially self sufficient because they were never taught.

In turn we have created many spoiled, self-centered young adults who feel entitled to their parents money--again I must say not all behave this way. I am currently experiencing this with an adult step child who feels his dad's money is his money.

Parents should teach their children about budgeting and money while they are small. Don't wait until they are young adults because then it is too late.

Just wanted to share.

Michelle Singletary: Well you might not need to start this young :) but you do have the right idea.

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Falls Church, VA: Thanks for your always insightful advice!

Michelle, my wife is French, and our kids (first one of ??? due in Jan!) will be dual French-American citizens. We're thinking of sending them to college in Europe, where it will be very cheap for a top-notch education including room and board (since they'll be Euro citizens). However, we'd like to put away some money to give to each of them for their education. Can we use traditional college savings plans for that?

Janet Bodnar: Yes,you can use college savings plans such as 529 accounts to pay for schools overseas--but not every school. There's a whole list you should consult. I'm not sure off the top of my head what the best Web site would be, but you could start with www.savingforcollege.com or finaid.org. I think the U.S. Department of Education probably also has a list. By the way, my daughter attends McGill University in Montreal, and that's on the list.

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New Orleans, LA: Michelle, you are too funny. You say you didn't work while on vacation and then admit you "only" checked your email daily and emailed a few people.

Clearly the concept of not working (at all) while on vacation hasn't sunk in yet, yet you feel compelled to call it an achievement. I suggest that next time you give the laptop a vacation too.

Unlike Europeans, most North Americans feel guilty when they take a vacation--which is too short to begin with. They shouldn't. Did you feel at least a bit guilty?

Cheers,

Neil

Michelle Singletary: Oh so you are critcizing me? See told you some people missed taking pot shots at me.

And give me a break. I have like 10 jobs (NPR, Post, recent book out, etc.) I said I checked my e-mail once in awhile. I did not work. I did not write a column, e-letter, do a radio show, interview etc.

And nope don't feel guilty. That I took a vacation or checked my e-mail. Because not once did I take time away from my family for the first time in I don't know when.

It was wonderful. I'm proud of myself considering I'm a classic workaholic.

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Richmond, VA: Several years ago, when my two boys were younger, I heard that I could improve their credit history if I listed them on my credit card as authorized users. I did but never gave them the card. (I have made regular payments)Is it true that I improved their credit history or is that a myth? Now that they are adults (23 and 21) should I still keep them as authorized users? Thank you.

Janet Bodnar: I believe really strongly that you should never mix your credit your kids'. For one thing, there's absolutely no reason to push a young child into getting a credit score. They don't need one. For another, if they're not actually using the card, they're not actually learning anything about how to manage credit wisely. For another, if they somehow get their hands on the card and use it unwisely, your credit rating is on the line. For another, they may or may not have developed a credit history over the years. It all depends on whether the credit card issuer reported them to the credit bureaus as authorized users. Finally, they don't need to be authorized users on your card in order to establish a credit record on their own. Once kids turn 18 and head off to college, credit card issuers will be happy to give them any number of cards on their own. Certainly your kids are old enough now to have their own cards and establish their own credit histories. Take them off yours.

Michelle Singletary: Oh I'm giving Janet a big AMEN on this one.

People please. Please stop trying to introduce all these adult things to kids. They don't need credit cards -- until they are about to graduate from college -- like their last money in college. It only takes about six months to develop a credit history. They don't need to be pushed into working early. They have a lifetime to learn to work.

They don't need to buy and pay for cell phones, iPods and all that other stuff you think they need to learn to be good stewards over their money.

They learn from watching you. They learn from what they live. Let them be kids. Takes no time to learn to be a debtor. You just take money you don't have and pay for things you don't need. What is that about 10 seconds.

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Bowie: I haven't read the book, so maybe the answer to this broad question is peppered through it, but...

One of the purposes of adolence is to learn life's lessons through experience, both good and bad, while the stakes are small. A lot of the stands Michelle has taken "no credit cards" "very limited jobs" "no cell phones" might be good fiscal practices TODAY, but mightn't some lessons be better learned by accumulating some mangageable debt that has to be paid and experiencing what a drag that is?

Janet Bodnar: I've got to go along with Michelle on this one. For a child, the only good debt is no debt. Kids think in very concrete terms, and they'll be much better off in the future if they they learn to manage cash today--and stay solvent. It's one thing for older kids to take on student loans as an investment in their future. But taking on "training debt" is a slippery slope that younger kids kids don't need and can't handle.

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Washington DC: Re: Internet Bank accounts.

The one thing I would warn you about if you want to get one of those ING type accounts is to find out what your bank would charge, if anything, when you transfer money from the internet account to your checking account.

I almost got an ING account until I called my bank and they told me I would be charged for my monthly transfers to my checking account. Luckily my bank soon after offered an e-savings account with a 4.75% interest rate so I am using that instead.

Michelle Singletary: Good point. Thanks.

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Rockville, Md.: I have a 3 1/2 year old in preschool. I grew up in a modest-income family and never regretted not having a lot of toys or getting whatever I wanted. My husband and I try to teach my son to enjoy the simple pleasures in life, like going out to play.. and for the most part he does. The one problem is family always buying him stuff. I don't want him to be spoiled. Now when someone comes to visit, he expects a gift. How can I explain this to him? and how do I deal with this with my family esp. the in-laws? thanks

Janet Bodnar: Please just tell the in-laws (or have your spouse do it) how you feel, and that you're trying to raise your son with sound financial values. Tell them that when they come to visit it would be much better, and much more fun, for all of them if they did something fun with their grandson, like take him on an outing, or to a baseball game, or even just to the kitchen to bake cookies!

Michelle Singletary: I so know what you mean. I had a relative who would buy my kids so much. Too much. I asked nicely. I pleaded. I asked over and over that she stop. She said: "It's my money and I'll do what I like with it."

I said: "They are my kids and I'll raise them the way I want. Unless you want those presents and therefore your money ending up being given away then stop buying them stuff."

She got mad. I didn't care.

Stand up to these people. You are the parent. It's your house, your rules and your children.

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Vienna VA: Read your article about NOT working on vacation!! Hooray! Again, you speak the truth (even though in workaholic DC, its heresy!) You should run for mayor on the common sense platform!!

Michelle Singletary: Thank you. I was proud of taking this big step.

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Greenville, SC: Hi Michelle!

I just looove you columns and advice, but I have a question about today's article. You mention that a spouse's good credit could be hampered by getting joint credit with a spouse who has a less-than-stellar credit rating. How is that so? Is it becasue the lender will consider both payment histories and possible give a subpar rate? Just wanted a little clarification.

Michelle Singletary: No problem. If you get a new joint credit card and your spouse doesn't pay on time (cuz he or she is handling payment) that affects your score. And when you get that joint card both your credit histories will be considered in setting the rate. But histories aren't merged into one history since you both maintain separate credit files.

I'm just saying if you team up with someone who isn't good about paying bills and they are made responsible for that, your individual file will be impacted by that joint credit card/history of payment.

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Santa Rosa, CA: How do you handle the situation when friends all have cell phones and IPods etc. And these friends probably do not have college funds. Anyway, how do you handle your child's wanting to keep up with their friends?

Janet Bodnar: Tell your kids what the standards are in your family--that just because everyone else has something doesn't mean you're going to buy it, too. Don't be afraid of your kids. They will accept your standards if you're clear about what they are you and stick to them. Sure, they'll have some things other kids have, but not necessarily everything. And if they still want something that you don't want to buy them, they can pay for it on their own (like the young lady in the iPod question).

Michelle Singletary: And don't believe them that EVERYONE has a cell phone, iPod etc. Just not true. There are still some of holdout out here. My oldest, Olivia, is forever whining about wanting this or that that ALL her friends have. I say to her..give me names. All the names. Or when I go pick her up at school I say does that girl have xxx. What about that boy...

She gets so mad because of course the answer is no lots of times.

And even if it weren't I rule this house. I bring in the money. I spend it the way I think is best. Also she knows just like her siblings that we are saving for their college, their future...we've even told them we want to help them with the downpayment on their first home.

And if still they whine...so what. Where are they going to live?

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Burke, VA: Is 12 a good age to introduce a child to a checking account? I'd like to get my daughter in the habit of logging all her income/spending & this seems like a good way to do it. Thanks!

Janet Bodnar: I really believe that kids should have checking accounts before they leave home for college. But banks might give you a hard time about opening an account for a child as young as 12. You might start with your bank and ask if you can open the account as a custodial account. Or try a credit union; credit unions are often more kid-friendly than banks. Also, there's a bank in Denver called Young Americans Bank that caters only to kids who are under 21. They have customers from all 50 states, so your daughter could probably open an account with them.

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RE: Used iPod or No iPod: I think you and your guest are too dismissive. Basically, you've dismissed this item on the virtue of cost alone. Our world is becoming more techologically advanced. People can live without electronic toys, computers, color televisions, radios, name brand clothing and lots of other things, but learning value of a dollar has value as well. $150 isn't cheap, but the young lady if given the option of earning the money to get it, she will value it. She will learn that if one works for something, she can take a moment to enjoy the rewards.

Janet Bodnar: I believe that's what I recommended--if the child in question wants the iPod, she should pay for it with her own money. So we agree!

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Montclair,NJ: Good afternoon ladies,

I have a good friend who consistently buys everything for her two boys (ages 11 & 6). Gameboy, PSP, PS3,Xbox....they have it all. For Christmas she them both a number of gifts, incluing 26" LCD TV's that had built-in DVD's. When it comes to clothing, they have all the brand name items, including sneakers and shoes. My friend and her husband are far from wealthy or rich, but she places importance of getting them the best of everything. I've known her since my college days and she was always a shop-aholic and one of the best dressed girls on campus. She is still a diva who spends and dresses like she's rich. I totally disagree with the way she gives her kids everything and the values she's teaching them about material things. I am often at my wits end when it comes to buying them birthday and holiday gifts. It is not a competition, but I refuse to go broke trying to buy for these kids. Both boys are good kids, but I think their mother is sending them the wrong message about what is important.

Janet Bodnar: Aargh! You are absolutely right about your friend, so why are you buying into this competition? These kids obviously don't need anything, so don't buy them anything. If you want to do something for their birthdays or for Christmas, make it something like taking them on a "field trip" to someplace you'd all enjoy, or even investing in a stock or buying them a savings bond to teach them the value of saving. Their mother might learn a lesson, too!

Michelle Singletary: Now this idea I love!

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Credit Cards for Teens: Boy, if you want to really teach your kids to abuse credit- give them a credit card and attach zero responsibility to that card. I do not know how this current generation is going to function if mom and dad finance the whole wonder years and Jr. skips along buying whatever he or she pleases. The lure of starter credit will be all too tempting in college and the credit history will be down the tubes.

I'm 34 and was amongst the first generation of On Campus Credit Cards- and did I ever ruin my credit. I'm slowly building a savings, good at contributing to my 401k and am down to 3 cards which I am paying off and on time. My parents said I got myself into the mess and I had to work to get myself out which was the best lesson ever.

I hope parents get smarter that giving kids things carte blanche sets them up for disappointment when they are older that they cannot live up to the standard of living that their parents right after they graduate. Young new hires here at work seem shocked that they now have car payments on cars not as nice as they had in high school (!), insurance, and- shock that it is- can't believe taxes and benefits come out of their paychecks. They speak of high school like some did about the roaring 20s.

Anyway- good message about the young and credit. If this market's bottom drops out, the toys and luxuries will be taken away.

Michelle Singletary: We are trying to get the message out. Your testimony helps.

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Alexandria, VA: I have the opposite problem from Rockville. I'm an aunt to two adorable girls. Their parents (my brother and SIL and her parents) buy them everything. I'm at a loss come Christmas and their b-days. I'd like to get them books or something useful like that, but they have everything (including a fully funded college account thanks to SIL's parents...) They're 3 and 1, so I'm not really sure what to do. And not giving them anything, even though they have everything, isn't an option.

Janet Bodnar: Why is it that "not giving them anything isn't an option?" At the ages of 3 and 1, they can't really appreciate what you're giving them anyway. And as I've said to a number of people today, it's much better to give kids a gift of your time. What they'll really remember when they get older is that whenever Auntie came to visit, it was fun time when they went to the park or to a museum or did any of the other wonderful things you can do with kids in this area--for free!!!

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RE: Credit cards at college graduation: I somewhat disagree with this. My parents told me to get a credit card my junior year (maybe senior), then put the FEAR OF GOD in me only to use if for one or two small purchases a month ($30-50) so that when I got out of college I would have some credit history to be able to rent an apartment (which they did not want to cosign on - remember, never mix your credit with your kids'). I had friends who had no credit whose parents then had to cosign their first apartment - no good.

however, the key here was that I was scared out of my mind to put more than $30 on the card (and I still never spend more than I know is in my checking account)

Michelle Singletary: I hear you but I got a charge card (AE) just before I gradated and had no problem renting an apt. and my grandmother didn't have to co-sign, which she wouldn't have done anyway.

Still stick to my advice. You were good. You listened to your parents. Many don't. So I say delay the evil credit game as long as possible.

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Silver Spring, MD: Do you have any advice on how to help teenagers avoid being taken advantage of when they are in a paying job? Such as working off the clock, being asked to work on hazardous equipment, etc.

Janet Bodnar: Yes--have them quit that job! If they're being asked to do hazardous work, that's plainly illegal and should be reported to the Labor Department. Being asked to work off the clock is certainly unethical and probably also illegal. There's no reason kids should stay in a job like this. It's a parent's job to step in and get them out of this situation, and report the employer to the proper authorities.

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Centreville, VA: I looked and couldn't find your column on 'no cell phones for kids'. I'd like to hear the reasoning. My 15 and 17 year old both have one and I think it's great. For $20 a month (10 per phone - and no my kids have never gone over their minutes or run up huge bills), I have a lot of piece of mind over their being able to contact me and vice versa for any reason. The phones sure have solved a lot of logistical problems.

washingtonpost.com: The Color of Money: Spare the IPod, Unspoil the Child (Sunday, April 16, 2006)

Michelle Singletary: Here's the column. Still say it's a bad idea. Will continue to say it's a bad idea. Besides so many of them use that phone so rudely (as do many adults).

Just say NO!

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MD: if your bank charges you for making a monthly transfer to another bank account you own, you need a new bank. That's just simply unacceptable. Alternatively, have a direct deposit from your employer made into the internet bank account. It is no different that having a direct deposit into your current brick and mortar bank. Most employers can accomodate multiple direct deposit activity.

Michelle Singletary: Again. Good point.

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RE: Giving kids things: For children who have everything, and those who don't, they love spending TIME with you. My neice thinks I'm the coolest person in the world, just because we hang out and I listen to her -to her stories, her concerns, her desires, her opintions, etc. (She's 7, I'm not, I'm single with no children.)

Michelle Singletary: I so agree. I have a dear, dear friend who works with me at the Post (hey Alexa) and my kids love spending time with her and she doesn't buy their love (we often talk about her not having to get them much on their birthdays, holidays). When she comes over they all run to the door shouting her name. It's so wonderful and soooo funny!

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Alexandria, VA: How do I respond to a rising kindergarten when she wants to live in a bigger house?

Michelle Singletary: How do you respond?

You to kid: "You got a job?"

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Leesburg, VA: I just wanted to say I comepletely disagree with you regarding not paying children for grades. In high school, I was also paid for As and Bs and nothing for Cs and below. I was also, until the end of my senior year, not allowed to get an after school job, because in my family, my mother made it very clear that school WAS my job. As such, I was rewarded for doing it well, and not rewarded for doing it poorly.

Additionally, I believe school is where children do start to develop a work ethic, and should be paid for a job well done. I know very few adults who would strive to do their best in the workplace if their only reward was a pat on the back, and I think its wrong to expect that children will work for the same.

Janet Bodnar: I totally agree with you that going to school is a kid's job. I just don't think that financial compensation is necessary. When I was a teenager, my reward for good grades was getting a scholarship to college, which my parents could not have afforded otherwise. With my oldest two children, their reward has been to get into good colleges. And I have high hopes for my youngest, who will be a senior in high school!

I will say that I do know lots of families like yours who have paid for good grades, and been successful at it. That's okay. You just have to know your kids and be careful not to send them the wrong message--that money isn't your only compensation for doing a job well done.

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RE: Alexandria Aunt: We live on opposite coasts and my travel budget is nil (and my bro & SIL refuse to travel), so i dont get to spend much time with them.

the not giving them anything part has nothing to do with them, but the (monster)SIL

Michelle Singletary: Then if you can't compete and you don't want to and they have everything..send them cards. Call. The point is do what you can afford. Love them. That's all they need.

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Winchester, VA: Just a comment. Thanks for this topic today. I will purchase the book for myself and my family. I have a 3 year old and my husband and I are already guilty of giving her too much. She had a $3,000 birthday party this year! Shame on us and it takes columns like this to help us. We do have a college savings account in place since she was 3 months old and our own retirement savings, but I realize we're not doing enough. Thanks for sharing.

Michelle Singletary: Oooh child. $3,000. Wow.

I got a birthday coming up :)

But glad you are coming over to the enlighten side. Good for you! And remember this isn't just about the money. Kids need to know that love doesn't come with a price tag even if you can afford that price.

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RE: checking accounts for kids: Ok, I hear you on the wanting them to log their spending, etc. But doesn't money in a child's name (i.e., in a checking, saving, MMA, etc.) affect their financial aid eligibility? Of course these amounts may (or may not) be minimal, but doesn't it still have to be reported when applying?

And if the above is true? How would you get around that? By being joint on the account?

Janet Bodnar: Yes, money in a child's name can affect financial aid eligibility, but I wouldn't worry about that. You're right that the amounts are likely to be small, and at this age giving a child experience in managing money trumps financial aid. If we're talking about substantial amounts of money, such as college savings, keep that in a specific college savings account, such as a 529 plan or a Coverdell education savings account. Those accounts are considered to be assets of the parent, and they have much less of an impact on financial aid.

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Centreville, VA: Your cell phone column raised some good points, but seems mainly targeted for 12 and under. For older teenagers who are often not with their parents, it is a convenience and a safety measure as far as I'm concerned. It's not a matter of not being able to say no to my children, it's a matter of using new technology to make our lives easier and safer. Going to have to disagree with you on this one.

Janet Bodnar: Yes, but older kids should certainly be paying all or part of their cell phone bill--especially if they have a job. Even if you're paying the basic cost on a cell phone plan, the kids should be paying for all their over-the-limit charges. Imagine how that would cut down on family fights over the cell phone bills--and all those TV commercials on the subject. Such a simple solution.

Michelle Singletary: Janet is right. If you're not going to listen to me then make them pay for the phone bill -- all of it.

But may I remind you that just because they have a cell phone doesn't make them any safer. They aren't necessarily where they are supposed to be. In fact a cell makes it easier for them to be elswhere. When I was growing up if I said I was at so and so's house my grandmother could call so and so's and see. Not so with a cell phone on the go.

And frankly I think older teesn shouldn't be where there isn't adult supervision anyway and most if not all the adults there will have a cell phone so you can still reach them.

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Michelle Singletary: Well that's it for today. Time always seems to go so fast. Really thanks to all who joined this chat -- all that agreed and disagreed. It makes for a good discussion. And folks I know my place. I know it's your life and your money and ultimately you will do what you think is right. But I'm an outsider looking in and that gives me a perspective about what might be better when it comes to life and money.

Anyway, love chatting with you all. Please come back and if you haven't signed up for my weekly e-letter please do. Just look for the sign up information in the biz section. I tell you that because Janet and I will answer some of the leftover questions in the e-letter and perhaps in my column as well.

Have a wonderful day -- on purpose (that line comes my the asst. pastor at my church). I love it!

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