That’s why a piece from the Wall Street Journal caught my attention this week.  It was a written debate between Neal Godfrey and Jon Gallo, both with varying experience in family financial literacy.  Ms. Godfrey argues that an allowance should be based on household duties and Mr. Gallo argued that allowances should be paid independent of children’s chores.

I’ll let you know right now that I sided with Ms. Godfrey.  I believe it is important for a child to learn the importance of hard work and how to earn money.  If they don’t work or do quality work, they shouldn’t be paid.  These are consequences we face as adults.

Both experts seemed to agree that there is a distinct difference between chores and household duties.  Chores are what kids get paid to do.  They are jobs around the house such as laundry, setting the tables and doing dishes.  Duties are responsibilities of the family member which include brushing your teeth, getting dressed, making your bed, etc.

What do you do if children refuse to do chores or household duties?  I think Ms. Godfrey sums it up best with this statement:

Citizen of the Household chores are “good behavior,” and if not done, the punishment is behavioral, taking away a privilege, like TV. If Work for Pay jobs are not done, there is no pay.

Should parents pay children an allowance?  One of our most important responsibilities as financial stewards is to teach principles of stewardship to our children.  I think working hard is one of those principles.  Work and earning pay is a valuable lesson for children, but just as important is teaching them how to budget:  give, save, spend.

What do you think about these ideas of paying children an allowance?

Source:  Should Allowances Be Tied to Chores?

Millions of Americans now owe more for student loans than credit cards. The loans can top $100,000 — even $200,000 — and often translate into payments of more than $1,000 a month.

The article stated that the “average student debt load now tops $25,000.”  Many colleges are reporting debts on average of more than $35,000.  Can you imagine your child graduating from college having to spend 50% of their salary on paying back their school loans?

Certainly, some of the debt is attributed to the rising costs of tuition.   Interest rates could also have an impact.  There is a bill under review in Congress that would extend the the 3.4% rate on subsidized Stafford loans for another year.  The rates will double if Congress doesn’t take action!

I want my kids to go to college and receive a good education.  I also want them to experience college and so much that is learned about self discipline and growing as an adult.  While we’ll do the best we can to get this important financial goal started by using a 529 savings plan, I’m not sure we’ll be able to send them to school debt free.

So, what should we take away from this article?  Personally, it’s more motivation for me to start saving now.   As parents, it’s important for us to avoid debt so that we can have freedom in our budgets to help contribute towards such important future goals.

Howard Dayton from Compass – Finances God’s Ways says this: “take out as little school debt as you can and pay it back quickly.”

What do you think about the growing concern for student loan debt?

Source:  Students lament debts as loan battle gains steam in Congress

1. Have a home inventory

Begin by listing off the easiest and largest items such as computers, furniture, televisions and other electronics, appliances, and jewelry.  Then begin adding in other smaller items such as kitchen utensils, clothing, toys, tools, etc.  You will want to make a complete list of everything in your home, garage, storage shed(s), and barn(s).  I would encourage you to itemize it by room and building.  This way if only part of a building is damaged, you can easily sort it.

2. Take pictures

It is not hard in our digital age to take pictures of all the rooms in your home.  Be sure to get all the various angles including paintings on the wall, anything special done to the ceiling, etc.  Also, open up the cabinets in the kitchen and bathroom, as well as the closets.  It will amaze you how many items we forget.  Be sure to get the manufacture’s name in the picture including turning over china to get the pattern and manufacture’s name.  Also, make sure to take pictures of antiques and any inscribings or other markings on them.  You would be surprised at the number of people who find out Grandma’s old “such and such” was worth a couple of thousand dollars!

3.  Keep information handy

Keep contact information and policy numbers in one location that is easy to find.  You will also want to make sure that you have adequate coverage for your belongings, and if you keep an up to date inventory, it is very easy to see if you have that or may be lacking.

4. Protect your information

You can protect your information by placing a copy of all the information you collected in your safe at home if you have one or a fireproof box.  Also, put a copy in your safe deposit box if you have one.  Then I would also encourage you to give a copy to a family member or friend who lives outside of your neighborhood.  If your area is prone to forest fires, you might even want to give a copy to someone you know and trust outside of the state.

5.  Store other important information

Add to the location where you keep your home information, a copy of your auto records such as a copy your purchase receipt, auto registration, and other information including your VIN.  You will also want to keep copies of anything you added to the car such as a special radio, GPS, etc.  You may also want to take some photos of the interior of the car especially if you store CDs, a MP3 player, or other items in the car.

Putting all these tips into action will hopefully help save quite a few headaches if you ever have to file an insurance claim which we all hope doesn’t happen…but life does happen.

What do you think of these tips to help prepare for an insurance claim?

Facebook IPO Approaching: Will You Buy Shares? (Consumerism Commentary) – Will you buy Facebook stock with the open share price to be between $28 and $35?  Facebook CEO, Mark Zuckerberg, will personally cash in $1 billion!

When A Waiter Gives You Free Food, Is It A Nice Gesture Or Is It Stealing? (KNS Financial) – A waiter unethically gives you free food.  What do you do?  Remember, good stewardship is honesty in all matters (at least for the matters you know about)!

4 Financial Tips to Consider Before Becoming a Stay-at-Home Mom (Len Penzo) – According to Salary.com, the average stay-at-home mom, if paid a salary, would get big bucks!  Here are some pretty good tips to work towards a stay-at-home parent in your household.

When You Hate Your Car! (The Millionaire Nurse Blog) – Having cars with big mileage can be a headache!  Believe me, I know with two cars over 100K.  This post provides you the tips you need to decide when it’s the right time to get a new car.

Counting the Time Cost of Purchased Service (The Frugal Girl)  – Are their instances when paying for a service doesn’t save you much time?  What about traveling to go pick up take out?  While this saves you time at home you still have to travel to get the food!

How AutoZone Made Me a Customer For Life (Out of Your Rut) – Love to hear stories of good customer service as you don’t find it as much these days!  Some companies still know how to provide top quality service that makes customers want to keep coming back.

10 Inexpensive Mother’s Day Gift Ideas (My Dollar Plan) – No need to stress if you haven’t gotten your mother a gift for mother’s day.  Here are 10 ideas that won’t bust your budget!

4 Reasons Why I’ll Never Own a Credit Card Again (Perkstreet Blog) – The case for no credit card…Personally, we have a credit card, but pay it off every month.  These reasons will certainly make you consider not having one.

Money and Marriage: Do You Hide Money from Your Spouse? (Budgeting in the Fun Stuff) – Do you hide money from your spouse?  If so, this can cause problems in your marriage.  It happens more often than you would think.   It’s always best to manage your money as one vs individuals!

10 Things to Do Before You Make an Offer on a House (PT Money) -Congrats to PT for just making an offer on a house.  He provides some great tips of things to do before you extend your offer.  Search for the address on Google?  Who would have thought!

Personal Finance Blog Carnivals – Carnival of Personal Finance, Carnival of Personal Finance, Totally Money Blog Carnival, Festival of Frugality, Self Directed Investing for Retirement

When it comes down to finding the best plan it’s essential to compare the universal features among all the plans. By figuring out these features along with how they differ from one plan to another, you’ll be able to determine which plan is best suited for your particular financial situation. The best 529 plan is often different for everyone.

Prepay or Build Your Portfolio?

Photo © by Sergio Goncalves Chicago

The first thing you’ll want to ask yourself is, do you want to build your portfolio or prepay tuition? Many people don’t realize there are really two distinct kinds of 529 plans.

The prepaid plans let you purchase future semesters or units of education using today’s prices. On the other hand, 529 savings account plans let you invest your money which will grow determined by how the investments you chose perform. If you’re looking for simplicity and safety then stick to the prepaid plans. If you want to earn more and are not adverse to the greater risks involved, then choose a savings plan.

In-State or Out of State?

The next thing to decide on is whether to go with an out of state plan or an in-state plan. Some states offer credits or deductions for using a plan from your home state, while others give exemptions from paying income tax on your withdrawals. Some states even offer both. You’ll want to research this carefully before deciding on a plan.

Contribution Rules and Costs

You’ll want to also compare the contribution rules and any costs involved. Each plan is slightly different with some plans requiring minimal amounts for the initial investment and any additional amounts invested. Many plans also have caps on how much you’re allowed to contribute.  As far as costs go you’ll want to see which plan charges what? Most of these accounts come with an assortment of management, administrative and broker’s fees. A good rule of thumb is to keep all of your combined expenses paid out annually to between 1% and 1.5%. Anything over this number and you’re not getting the best deal, as the cost can begin to slowly eat away at the growth of your investment.

Financial planning for college can be overwhelming sometimes and is filled with hurdles. You’ll constantly find yourself asking new questions, like do 529 plans affect financial aid? Or, does my school meet the eligibility requirements? Don’t worry, while it all may feel complicated at first, you’ll quickly find that with a little time and effort you’ll be just fine.  It’s important to do your homework, but don’t forget to seek the advice of a qualified financial adviser before making any decisions.

Hopefully, these tips on choosing the best 529 savings accounts, has given you an insight into some of the things you should look out for when deciding a proper 529 plan for you.

So, if you’re looking around for a new savings account, I recommend adding the American Express Savings Account to your list of accounts to consider.  Let’s take a look at some of the features of this account.

American Express offers two types of savings options:  Their online savings account and certificates of deposits.   We’ll discuss the savings account today.  The savings account offers a competitive rate of return with other online savings accounts.  There are no fees to open or maintain the account and no minimum deposit required each month!   These features provide a great way to get started saving even when you can’t save much right now.  The savings account is secure as your savings is FDIC insured up to $250,000.

You can link up to 3 personal checking accounts to the American Express Savings Account.  This feature is nice because you don’t have to worry about switching checking accounts.  You can continue to use your existing checking account and transfer money as needed.  You can also set up automatic transfers (highly recommended) so you don’t have to think about contributing to your savings each month!  Direct deposits are also available and you can conveniently mail in checks to make a deposit, or even call to receive a withdrawal if you don’t want to transfer money to your checking (AMEX will send you a check).

Opening an account is easy and only takes a few minutes.  There are 4 steps to follow to open an account:

1. Collect personal information such as the account you’re using for funding.  There is a list of information on the AMEX website.
2. You can choose the type of account that interests you.  You can open a high yield savings account or a Certificate of Deposit and submit your application.
3. You’ll receive a confirmation email letting you know your account is approved along with a savings welcome kit.
4. Finally, you can fund your new account by mailing in a check or linking an external account.   The website provides an overview of how to make deposits and withdrawals.

Overall, American Express is a trusted global financial services company and I think the American Express savings account is well worth considering if you’re looking for a place to securely save money with a competitive rate of return.  No fees and no minimum deposit put this account on my best online savings account list.

This article asks what if the things so many of us want – nice house, higher-paying jobs, fancy car and expensive private schools for our children – turn out to give us more stress than they are worth.  While it is mostly true that the burden and stress associated with lower-income earners lessens as they earn more money and move up the social ladder, this holds true to a certain point.  In fact, once you get to a certain level, the benefits associated with increased wealth go away.  Research has shown that as you continue this climb, the stress associated with living the “high life” increases so much that it can eliminate many of the positive aspects of succeeding!

Scott Schieman, a sociology professor at the University of Toronto, conducted surveys that depict this.  In 2005 and 2007, he surveyed 1,800 Americans from a variety of income levels (he is now extending this research to more than 6,000 Canadians) and found that “people with higher levels of education and in higher-status occupations and mid-to-higher income brackets are experiencing higher levels of stressors.”  Why is this so?  Well, the responsibilities that come along with success can make life more difficult if you are work-devoted and highly-driven – two of the characteristics that led you to succeed in the first place.

Let’s say you are in the position of being able to work from home.  Some may find that to be dreamy whereas others look at it as a nightmare since they feel the need to always be on and answer every email, text message or phone call they get regardless of the time.  Some also strive to have power which can lead to even more stress when you have to manage others.  Then there are what sociologists refer to as “micro-impression-management activities.”  These include things such as wearing the right clothes, looking a certain way, having a nice house and the perfect family – qualities needed to remain credible.  I know many people would gladly trade their problems with these but it just shows that stress is relative to what we are going through.

I found this study to be interesting.  I, like many others, do sometimes wish I had more money.  I am content with my life but of course having more would be nice and sometimes more money equals more problems!

Family Travel Tips | Traveling By Plane (Moms Need to Know) -Yes, it’s that time of year again when many families will be traveling to the airport.  Overall, these tips are solid.  Even though it’s not exactly frugal, I agree with the advice here to pay for checking bags if it saves you a hassle.

Best Strategies to Pay off Your Credit Card Debt Faster (Everything Finance Blog) -With some dedication and the right strategy you CAN pay off your credit card debt faster. The approach here is good except I do like the idea of paying smaller balances vs higher interest first.  I love the advice about paying more frequently if you can do it!

7 Ways To Handle Unexpected Expenses and Financial Emergencies (The Digerati Life) – Great tips here to help people avoid the dreadful payday loans!  Don’t forget to use your emergency fund and find out what expenses you’re actually responsible for paying for before shelling out the money!

ING Direct Adds Remote Deposit – Finally! (Five Cent Nickel) – I’m totally amazed at technology these days and the fact that we can now deposit checks using our mobile phones.  ING Direct recently provided this feature which is another reason they are a great online bank!

How to Buy Gift Cards for Less (Christian Personal Finance) -I love these tips because I had never really considered looking to find discount gift cards.  This post shares tips to find some great deals online and save some money if you like to buy people gift cards.

4 Garage Sale Shopping Tips to Help You Score Great Deals (Money Crashers) -Yep, it’s garage sale time again and people are hitting the streets to find bargains.  I think garage sales are a great way to make some extra cash too.  If you find a bargain, consider reselling for a profit!  Overall, this post is a handy guide to scouting out garage sales.

How Could You Make An Extra $200 This Week? (Man vs Debt) – There are a lot of great tips here to make extra money and this post is inspirational too!  Check out the many ways to make extra money on the side including using the internet, Mary Kay, Amazon and several others all in this post.

Blog carnivals we were recently included in – Personal Finance, Personal Finance, Personal Finance, Household Budget, Financial Simplicity, Totally Money, Festival of Frugality, Festival of Frugality, Totally Money, Financial Camaraderie, Carnival of Financial Planning

Get an Estimate

Begin by finding out what the cost of the repairs is going to be.  You can take the car to the body shop or repair shop or ask a repair person to come out to your home.  This will give you a good basis to go on as only after the actual damage is seen can you really get an idea of what it will cost you.

I have seen where someone describes the damage, and receives quotes of $200 to $1,800!  That was a huge range and really did not help make any type of decision.  So getting the actual estimate is crucial.

Understand Changes to Deductibles, Premiums and Discounts

Next, talk with your agent to find out what your deductible would be if you filed a claim.  You’ll also want to ask what you could end up paying in increased premiums or loss of discounts.

They will often tell you that it is X amount for 5 years.  Be sure to ask if the amount given is per payment or the total for the 5 years.  The agents often think in terms of payment period, so they could tell you that you would lose $200 in discounts for 5 years which means $200 per payment (typically every 6 months for auto and yearly for home) over a 5 year period.

You will then need to take that amount lost times number of payments in a year times years.  In the example of $200, that would end up $1,000 on a homeowner’s policy or $2,000 on an auto policy:  2 X $200 X 5 Years = $2000

They may tell you that your premium won’t increase, but be sure to ask about the discounts as that ultimately does increase your total cost.

Ask Other Questions

I would also ask questions such as what type of claim would this be filed as?  (Collision, comprehensive, etc)  How long ago was our last claim?  How would this affect my driver rating? And if there are any other questions I should be asking?

Get Before and After Pictures

Also, be sure to get pictures of the damage for your records and in case there is ever any question by the insurance company.  You’ll also want to get a few pictures after the repairs are done. The before and after pictures can easily be taken on a digital camera and stored on a computer if needed later.  Keep them even after the claim is done.  Insurance companies often won’t cover further damage unless they know you repaired the previous damage before a second incident.  The repair receipts and pictures would be your proof if you ever needed them.

Keep Good Notes

You will also want to keep good clear notes of who you talked to, when you talked with them, and what was discussed.  This will help you keep an often confusing situation as clear as possible as well as if someone tells you something and goes back on it, you will have the notes to refer back to.

Overall, the key is to remain calm and ask a lot of questions.  Take your time and do not hesitate to ask for a second opinion and clarification as needed.  There’s no such thing as a silly question!

Next week, I’ll be talking about how to prepare for an insurance claim before it happens as we look at the flip side of how to be best prepared before something happens.

What do you think of these tips for filing an insurance claim?

It’s no secret that summer brings more weekend trips and vacations to distant locations and making it the traditional peak season for driving. Gas prices rise as summer approaches, topping out (usually) on or about Fourth of July weekend. According to projections, this summer figures to be a textbook case with prices rising well above $4.00 a gallon.

There are no miraculous ways to save big money on gasoline, short of buying a brand new, fuel efficient compact. But by taking a series of steps–each saving you a little bit of money–it can really begin to add up and put a serious dent in how much you spend to keep your car running this summer.

1. Do what you can to avoid traffic jams

Sitting in traffic burns gas to no advantage. It’s easier said than done, but the more you can avoid idling in traffic the less you’ll spend on gas.

Summertime traffic often eases due to a combination of vacation time (fewer people driving to work on any given day) and school being out. That can open some commuting options. Try mapping alternate routes around known traffic tie-ups or, if you can, see if you can set up a flex-time arrangement that will allow you leave for work well before or after peak commuting times.

2. Toss some extra cargo

Most of us carry extra baggage in our cars–usually in the trunk–and the extra weight can cost us in gas mileage. An over-loaded tool box by itself can weigh as much as an adult and have a significant effect on fuel efficiency.

Keep only what you absolutely need to carry in the car and move the rest into the garage.

3. You don’t need to warm up your car in the summer

This is just a habit we carry over from winter, but it’s usually totally unnecessary during the warm weather months. A car idling in the driveway is wasting just as much fuel as one stuck in a traffic jam.

4. Ease up on the gas peddle

Multiple studies have confirmed that cars burn more fuel at higher speeds, so it’s worth trying to slow down by 5-10 miles per hour. This is particularly true with highway driving, where speeds are often in excess of the optimum fuel efficiency achieved at 55 miles per hour.

In addition to slowing down overall, fuel economy is also improved when you drive at consistent speeds as repeated acceleration and deceleration also consume more fuel.

5. Consolidate your trips

The most basic way to save on gas is to drive less, and one of the easiest ways to do this is by consolidating several destinations into a single trip. While you’re running to the grocery store, plan to go to the post office, the bank or the dry cleaner, especially if they’re all located in roughly the same area. Stopping on the way to or from work can be even more efficient.

6. Learn the joys of walking and biking

Another way to cut down on driving is by eliminating short trips. Though it may take longer to walk or bike to the bank or a coffee shop, in addition to saving money on gas, you’ll also gain the health benefits that come with more exercise.

Develop a tiered strategy where you’ll walk or bike to any place you need to go that’s within, say, one mile of your home, or what ever distance works for you.

7. Turn off your air conditioning–sometimes

Air conditioning can develop into one of those reflexive habits we take on in warm weather–it’s summertime, therefore the car air conditioner is on. We might not even think about it, but using it constantly reduces fuel efficiency.

Take advantage of night time driving and those not so hot days when an open window can do just as good as having the air conditioner on. And if you’re like me at all, driving with the windows open just feels better!

8. Carpool at least one day a week

Admittedly this is one of the hardest driving changes to make, but it’s also one of the richest sources of savings. If you could carpool at least one day a week you would reduce your consumption of gasoline for commuting purposes by 20%. That’s a big chunk with just a single adjustment.

9. Gas up at a warehouse club

Food warehouse clubs usually offer gas to their members at below the going rate. As a member of Sam’s Club, I generally find that it costs 7 to 10 cents per gallon less than even the cheapest gas stations in town. If you buy 50 gallons of gas per month, that can add up to as much as $5 saved each month. You’re there to buy your groceries anyway, so while you are stop and fill up the gas tank.

10. Take advantage of gas credit cards benefits

This is the most complicated adjustment if only because there’s such a great variation in offers between the many gas retailers and credit card companies. Some will discount your gas purchases by a certain percentage, others by a fixed amount, like five cents a gallon. Most have minimum and maximum monthly purchase amounts to limit how much they’ll rebate you for gas. Shell has an arrangement with Kroger so you can get benefit from your grocery purchases toward your gas.

Credit cards with rebate programs on all purchases may be the simpler route. You don’t have to buy a certain amount of gas each month, nor do you have to limit your purchases to a single gas retailer.

Summer is coming, and with it so are higher gas prices; what are you doing to save some money?

How Long After Bankruptcy Can I Buy a House? (Get Out of Debt Guy) – Many people who have gone through bankruptcy are looking for the answer to this question and this article provides some good information with a good way to get into a house again sooner versus later.

Will Being Generous Help Your Finances? (Canadian Finance Blog) – This is a good reminder that there are many positive effects of giving your money away and making this a regular part of your budget.

Why You May Be Poor (Budgets are Sexy) just had to include this in my round up this week because it made me laugh when I opened.  the message is simple, but important to remember

Do You Have to Pay Tax on Airline Miles? (Free from Broke) – We use our Citi MasterCard for Airline miles, but are those miles taxable if we redeem them?  Thankfully not, but sometimes they are taxable so you need to read this if you travel using your miles.

When Is It Worth Spending More Money? (Cash Money Life) – I definitely agree with this post in that there are some times that it’s better to spend more money.  We’ve shelled out the money for a house cleaner in the past which has been a huge way to reclaim time for our family.

Compare Your Budget With Americans 50 & 100 Years Ago (My Money Blog) – I’ve always wanted to research this subject and learn about personal finance in the past and how it differs from today.  The results shared in this article were not surprising to me!

Why We Got a Target Red Card (And The Dangers Of One-Size-Fits-All Advice) (Money Under 30) – I’ve been offered the Target Red Card several times when checking out and have always passed on it.  After reading this post, I may reconsider because we frequently shop at Target and we pay off our credit cards every month.

Have a great weekend!

Luckily, there are programs that can assist families who are looking for ways to pay for higher education. Upromise is a company that does just that. They use the familiar concept of cash back rewards to help saving for college education.

How can I earn with Upromise?

Once you become a Upromise member, there are various ways that you can use the program to start saving money for college. One of the easiest ways is through their online shopping portal where you can shop through 600 online stores including large names like Target, Wal-Mart, and Dell.  You can earn cash back rewards from 1% all the way to 25% of the purchase price.

You can also gain cash back rewards by registering your current credit or debit cards. When you make a purchase using your connected cards with a Upromise participant you will earn cash back. The best ways to earn is through the restaurants you go to. Using your connected credit or debit card can net you up to 8% of the meal cost.

Are there other methods to save?

In an alliance with Bank of America, Upromise also created two different credit cards to maximize cash back potential and help you earn more money for college. One of the cards gives cash back rewards on gas and grocery purchases while the other focuses on restaurants and groceries. Using either card can earn over 10% of the purchase price as cash back.

How do I withdraw my earnings?

Upromise offers various methods to withdraw your funds, even if you aren’t saving money for college.  The various ways to use your savings are by:

• Transferring the balance to pay off a current student loan
• Having the savings sent via check
• Move your savings into a high-yield savings account (offered thru Sallie Mae)
• Have your rewards deposited into a 529 account

While the products offered on Upromise may be of a higher-end variety (for example, purchasing name brand cereal instead of store brand), having the savings automatically deposited into an account can be crucial for those without proper saving habits. In the end, it is worth a try. There’s no huge downside to using Upromise—worst case scenario is that you don’t save very much—and since you are going to buy the products anyway, you might as well save for college while you shop.

Get started with Upromise!