Articles By The Money Godmother

7 Tips to Teach Good Shopping Habits

Spending comes naturally for most of us, and even though the holidays are gone, shopping is still a perfect learning moment if you want to teach kids that buying decisions should involve time to think and evaluate. (That's why it's called holiday shopping and not spending.)

Here are 7 tips I like to give those who are teaching kids good shopping habits:

1) Follow Santa's lead: Make a list and check it twice.
Shopping with a list is more efficient, and keeps us on track...and on budget. Kids (and some adults) might even go so far as organizing by the envelope system. Just label envelopes, one for each person you want to give a gift. Put the amount to spend in each envelope, and on the envelope write individual gift ideas, prices and places to purchase. Then, when purchased, place the receipt in the envelope.

2) Remember, It's the thought that counts.
Yes, gifts cost money, but putting a little thought into what Aunt Millie likes means more than cruising down the aisles to quickly pick up the latest and greatest. In fact, your friends might be more impressed that you focused on something special for them than if you spent a lot of money. So when kids have small sums for shopping, encourage thoughtful gift-buying so money will stretch farther.

3) Detective skills prove profitable.
Teach kids to plan a strategy: dig for coupons and ads (newspapers, websites, Twitter, store flyers) to find discounts and the best prices for items. Holiday shopping (and after) is a time to find discounts and sales. And actually, scouring the ads and planning the shopping trip can be half the fun.

4) Don't by shy; be resourceful and speak up.
Newbie shoppers (and most kids are) gradually acquire negotiation skills. Help your kids learn to interact with clerks. For example, don't be afraid to ask:
• if there is free gift wrap, which saves time and money.
• if the retailer will match the price of a competitor's ad.
• if there is a gift with a purchase.
• if a discount or coupon can be applied.
• if the sales clerk can check the chain's other stores if your desired item is out of stock. Items can often be located and shipped free.

5) Score TOP points: Timeliness, Originality, Presentation.
You don't get many kudos if you buy several friends the same token, are late in giving or don't wrap the gift. Sometimes, it's the little things that count, things that don't cost a lot of money.

6) And speaking of originality, custom-made can be awesome.
Nothing says "I value you" as much as spending time to make something for another person. Some ideas:
• Find a soup or cookie/bar recipe, buy the dry ingredients and make mixes. Fill and decorate glass jars and attach the recipe.
• Get a flower pot and plant an herb, flower bulb, or seeds. Or, fill the pot with gardening delights (seeds, bulbs, fertilizer stakes, gloves, small tools, labels).
• Use websites and find interesting recipes. Make a personalized recipe book.
• Collect special photos and arrange in an album or collage frame.
• Start or make a journal of "Memories with My Friend".
• Find a small basket or tin and fill with someone's favs (teas, coffees, candy, lotions, sticky notes & pens, hair accessories, baseball cards).
• Crafty kids can create bead jewelry, weave a simple scarf, stencil bookmarks or book covers, paint bags or memory boxes (not recommended for the craft-challenged or very young).
• Make your own wrapping paper or cards to go with a purchased gift.
• Make home-baked goods (breads, candies, muffins, cheese ball, chocolate-covered pretzels, popcorn balls.
• Recycle something (dip candles by melting old crayons, collect pine cones and make a wreath, make a potpourri and fill a basket, repaint a flower pot or picture frame).

Not so crafty?
• Create a coupon book, redeemable for babysitting, yard work, kitchen clean-up hours, even hugs.
• Customize a calendar using a computer template (great way to remember birthdays).
• If you plan piano or another instrument well, record your play and make a CD (what grandparent won't treasure that?).
• Make a tape recording as you read favorite storybooks (great to give young siblings).

7) Haste makes waste, especially last-minute shopping.
It's frustrating when shelves are empty, crowds are rambunctious, and time is running out. Don't try to cram in your own shopping errands, so that it becomes a miserable experience or feels like a burden when your kids deliberate about what to buy.

Financial education kids

Baker's Dozen Ideas for Raising Money-Smart Investors

1. Make birthday gifts of “investment” money instead of spending money. This could work for allowances too.

2. Read fun investment books together. A good place to start is
Stock Market Pie: Grandma Helps Emily Make A Million.

3. Start or turn a savings account into an investing account. Do not keep savings in a checking account. (If under age, it will be a Uniform Gift to Minors account and an adult name will appear on the account too.)

4. Take your kids to visit a stockbrokers’ office. Pick up literature, ask questions, watch the activity on the computer screens.

5. Pick an interesting stock to study. Find an annual report, visit or call the company, sample the products, and then decide on a reasonable purchase price. Invest with real or imaginary money. If you actually buy, request the stock certificate be sent to you.

6. Some companies will allow you to purchase a few shares of stock directly from the company. You can also purchase initial shares of some companies through the National Association of Investors Corp (NAIC).

7. Start a DRIP account. After an initial stock purchase, some companies allow you to reinvest dividends and buy more stock on a regular basis. These are called DRIPs (Dividend Reinvestment Programs).

8. Attend the annual stockholders’ meeting of a local company.

9. Log onto entertaining websites on investing. Some good ones are:
http://www.asec.org http://www.treas.gov/kids/index.html
http://www.americasaves.org http://www.sec.gov

10. Play a stock market game. Find an on-line game at
http://wwwsmg2000.org or www.wallstreetsurvivor.com

11. Start an imaginary portfolio of a few stocks and keep track by charting results for a period of time. The investor with the best performing portfolio wins a prize.

12. Keep an investor journal (like
Stock Market Planner) and track companies you would like to buy. This could be as simple as graphing recent prices or yearly sales.

13. Play detective and find new start-up companies (or industries) that would make good stock picks. Use the Internet, visit a shopping mall, discover and try new products.

Financial education kids

Create Stock Market Detectives in the Classroom
1) Talk about products/brands the students like and/or use.
--What is most popular among this class? Among teenagers? Among boys/girls?
--Find the name of the company that produces the products most liked.
--Are the products expensive? Used up often? Easy to get? Popular nationwide?

2) Get annual reports of several companies.
--Have students create a short summary of the company (work in pairs/teams).
--Sample products, if possible.
--Find a competitor or two.
--Find annual sales/revenues. Are sales higher or lower than the previous year?
--Are new products or services being introduced?
--Does the company operate in just one state, nationwide, or worldwide?

3) Study a stock (Nike, Pepsi, McDonalds, etc.) with a treasure hunt.
--What is the symbol?
--What products does the company produce?
--Who is the CEO? How long has the company been in business?
--Is there a dividend paid? How much annually?
--Has this stock split?
--What is today's trading price? How about the high and low prices for the year?
--What is the PE, or price-to-earnings ratio?
--What is the company’s annual sales volume?
--Would it be a good stock to buy?

4) Take a class survey of a product (like candy bars, pop or bottled drinks).
--What brands are preferred?
--How does popularity affect a company’s growth?
--Does brand influence purchase? Does price make a difference?
--How many purchase these at activities? At grocery stores?
--Is there a gender preference of one brand/product over another?
--Graph results for your class and maybe one or two other classes.

5) Get copies of the
Wall Street Journal or business section of the local newspaper.
--Read and interpret the stock page (see #3 above).
--Find and discuss an article on today’s economic conditions & the stock market.
--Find local, state and national news that affects a local stock.
--What current events would be positive news? Negative?
--Do you think the stock price will rise/fall on this news?

6) Use websites to locate information about a company.
--Download the annual report information from EDGAR.
--Log onto a stock market exchange site (NYSE, NASDAQ).
--Find a company’s website and locate investor relations.
--Explore www.CBSmarketwatch.com, www.finance.yahoo.com, etc.

7) Visit the reference section of the school or public library.
--Can you find the
Value Line, Morningstar or Standard & Poors resources?
--Where are magazines like
Money or Kiplinger’s? Assign an article to read.
--Find the
Wall Street Journal, Barron’s or Investor Business Daily.

8) Chart the daily high/low price of several companies for a week (1 per team).
--Use websites, newspapers, etc.
--Discuss reasons why the stock prices have gone up/down.

9) Choose 5 stocks to build an imaginary $10,000 portfolio (3-5 portfolios/class).
--Are you diversified?
--If all 5 stocks went up 15% for the year, how much is your portfolio worth?
--How much would your portfolio pay in total annual dividends?
--Make a pie chart showing how much of the pie each stock represents.
--Does the stock with the highest price also have the highest P/E?

10) Find the board of directors for a local company.
--How many are on the board?
--How many work for the company too? How many are outsiders?
--Do they own the company's stock? How much?
--Are there any women directors? Any minorities?
--Are there local representatives who aren’t employees?

11) Learn about the Dow Jones Industrial Average.
--What is this index designed to do?
--How many companies are represented? What are they? Do they ever change?
--What did “the Dow” do today?
--What is the oldest company listed? The newest company?

12) Find out how to conduct a stock trade.
--Call a broker.
--Look at websites for on-line trading.
--How is an account opened? What information is needed to open one?
--What commission is charged on a trade?
--How old must you be to buy/sell a stock in your state?
--Can you get the actual stock certificate? Does it cost to do so?
--When is the stock exchange open?

13) Design a stock certificate for an imaginary company.
--What information needs to be on the certificate?
--What type of icon would represent the company best?
--Is a stock certificate the same as cash?

Financial education kids
Encourage Saving and Investing with Fun Websites

Successful investors never stop learning. Got a computer aficionado? These websites are geared to learn about investing or find out about companies. Check sites for related links.

www.mymoney.gov --U.S. Department of Treasury
www.federalreserveeducation.org ---Federal Reserve System
www.jumpstart.org -- Jump$tart Coalition for personal financial literacy, info clearinghouse
www.dynamindspublishing.com -- DynaMinds® Publishing

www.investoreducation.org --Alliance for Investor Education
www.nefe.org -- National Endowment for Financial Education
www.councilforeconed.org -- Council for Economic Education
www.asec.org —American Savings Education Council

www.pueblo.gsa.gov/cic_text/money/investor-bill/investor.htm — Investor bill of rights
www.sec.gov —Securities and Exchange Commission
www.sec.gov/edgar/quickedgar.htm —EDGAR, a search tool for company information
www.sia.com —Securities Industry Association

www.amex.com —American Stock Exchange
www.nasdaq.com — NASDAQ stock market
www.nyse.com —New York Stock Exchange
www.cftech.com/BrainBank/FINANCE/USStockExchs.html -- U.S. stock exchanges
www.cftech.com/BrainBank/FINANCE/WorldStockExchange.html -- world exchanges

www.better-investing.org —National Association of Investors Corp.
www.sharebuilder.com -- low-cost investing site
www.buyandhold.com -- low-cost investing site
www.dripcentral.com -- how-to for Dividend Reinvestment Programs
www.smg2000.org -- Stock Market Game
www.wallstreetsurvivor -- stock game
www.oneshare.com -- low-cost investing site
www.morningstar.com/Cover/Classroom.html --educational materials from Morningstar

www.treas.gov/kids/index.html -- U.S. Treasury (for kids)
www.practicalmoneyskills.com -- Visa site, financial football game
www.kidsbank.com -- Sovereign Bank
www.moneyopolis.com --financial planning game by Ernst & Young
www.younginvestor.com -- by Columbia Management
www.orangekids.com -- by ING Direct