Happy Holidays!
Aren’t the holidays great? School’s out and gifts are in! But hold up. Sure we all can use a little break from school work, but is this season really all about the presents? No matter what religion or tradition you embrace, I believe this season is a great time to give back to your family, friends and community. So I challenge each of you to change your holiday story from an emphasis on “getting” to a time of “giving”. And there’s no better gift you can give than the gift of your time.

• Spend one evening playing board games with the whole family
• Play with your younger brother or sister
• Do someone else’s chore for them
• Bake cookies for your neighbors or the local fire station
• Visit residents at a retirement home
• Collect and deliver food to a community soup kitchen
• Pick up trash at a local park
  
  So whether the lights at your house are on a Menorah, a Christmas tree or a Kinara, this holiday can be even brighter and more meaningful when you choose to give back to others.
  Peace!

At Thanksgiving, we stop and say thank you for all the people and things we are grateful for. It’s a time to remember how fortunate we are to be healthy, to have a warm home and to never go to bed hungry. However, being grateful should not be an annual obligation, but rather a way of life. Let this season be the beginning of a new more thankful you for the entire year.

Simple ways to say, “Thank you”:

• Thank you notes are nice but it can be really fun to make a handmade note. Be creative and decorate it anyway that shows off your personality.
• How about a fun treat for someone you appreciate? Bake a giant cookie and write “You’re Sweet” with icing.
• Design a certificate for the “World’s Best Teacher” to say how much you value what they do for you.
• Do a chore around the house without even being asked. Your parents will be thrilled and it lets them know you don’t take them for granted.
• Even if you just say thank you to a stranger for an ordinary act such as holding the door, look that person in the eye and speak loud enough to be heard so they know you genuinely appreciate their thoughtfulness.
• Volunteer to collect items for the needy or sort cans at a food bank. Anytime you give or time to help your community, you are showing gratitude for what you have that others may not.
• Perform a random act of kindness. Need some inspiration? Check out what other kids are doing at TKO Helping Hands.

"Character is doing the right thing when nobody's looking." ~ J.C. Watts

Did you ever have a chance to cheat on a test, but chose not to? Perhaps when no one was looking, you picked up the pencil your teacher dropped and put it back on the desk for her. Maybe instead of spending all your birthday money like your parents think you did, you actually put some of it in the collection box at church when they weren’t looking. We don’t make these decisions and take these actions for praise and rewards. We do them just because it's the right thing to do.

That being said, it sure does feel great when someone notices you being good! I was recently honored to receive a Community Leadership Excellence in Mentoring Award for doing what I love most – helping kids. I got dressed up, flew to New York City and went to a fancy dinner where a large group of professional people thanked me for teaching kids about money and for motivating children to change their world through volunteering. Sure it felt good to get all this attention, but the best part of the award was a large donation check that was given to my favorite charity, TKO Helping Hands.

I would coach kids and teach children and volunteer to pick up trash and more even if no one knew I was doing it, because I know it is right. You should be proud of yourself for doing all the good things you do when nobody’s looking. You may not know it yet, but you are making us adults very proud of you, too!

Wow! What a Work- shop!

Last month I held my first Kids Finance Coach Workshop at my home and it was a blast! We invited kids and their parents to my house for an afternoon of fun activities to learn about money. We talked about things like allowance and spending, and even why and how to start saving money. Of course we couldn’t talk about money without learning about charitable giving. Money really can be used to help improve the lives of others.

Parents, interested in having Coach Brett visit your community or starting a League of your own? Contact Denise Villanueva.

I know people save money, but how can companies save money so they don't go broke?
When your parents feel that the family is spending too much money, how do they cut back? Maybe they don’t go out to eat as often. Maybe they use more supermarket coupons. Perhaps they decide to cut the grass and do the yard work themselves instead of hiring a service.

Well, companies also have to find ways to reduce their costs, especially during difficult economic times like we’re experiencing now. When times are tough, companies often experience a decrease in sales revenue. When sales go down, and costs stay the same, the company is less profitable, so they have to find a way to maintain profitability by reducing costs. Let’s take look at how this works.

If a company has sales of $100 and costs of $60, then they make a profit of $40. If sales go down to $90 and costs stay the same, the profit is reduced to $30. But if they can reduce their costs to $50, then they still make a profit of $40.

Here are some of the things that companies can do to reduce costs:

1. Supplies and materials - sometimes companies can negotiate with their suppliers to pay less for the materials they use to make their products, or for the supplies they use in their offices.


2. Freight - manufacturing companies spend a lot of money shipping their products to market. Shipping specialists can often help companies find ways to reduce their freight costs.


3. Electricity - Power is usually a large percentage of the costs of a manufacturing operation, especially when they are charged based on their highest level of demand in a given month. By installing monitoring equipment, they can ensure that lights and other equipment are shut off when they approach peak demand, which helps reduce the hourly rate that the company pays for power. (It’s not too different from your parents reminding you to turn off the light when you leave a room.)


4. Staffing - One of the main things that companies do to reduce costs is to decrease the size of their workforce by letting some employees go. This is known as “layoffs”. Most companies try to do everything possible to cut costs in other ways before laying off employees.

What have you done lately to help out in your community? You may have heard on the news or from your parents that our economy is not doing too well lately. That means more people than ever are struggling to pay bills and even provide food for their family.

No matter how old you are, there are many creative and inexpensive ways to help others this summer.

Take a Stand With Sunkist
Kids ages 7 to 12 can register at http://www.sunkist.com/ and submit their "Take a Stand" pledge and receive a free Sunkist lemonade stand, while supplies last. Then sell glasses of homemade to raise money for a charity.

Angels in Action
Students ages 8 to 18, will be recognized and rewarded for exemplary acts of service to benefit their community, a charity or cause. Visit http://www.angelsoft.com/ to get great ideas for creative projects by reading about last year's winners on the Angel Soft site.

Stamp out Hunger
It is easy to help local hunger organizations at a very low cost by donating coupon bargains.
Students can use the Grocery Deals by State page on The Savings Mom Web site, www.savingsmom.com, which lists grocery coupon deals in most states.

Clip coupons and buy several items to donate yourself. Or make a flyer asking neighbors to stick a few canned items in a sack and leave the sacks on their front porch on a designated day. Then go around collecting the bags to be delivered to a local food pantry.

Start a Great American Bake Sale
Sponsored by Domino Sugar and C&H Sugar, kids can sign up to receive a Participant Kit which includes everything you’ll need to get baking and starting selling your treats. Donate the money you earn to an area homeless shelter.

Need Cash? Get to Work!
It's not always easy for kids to find a job. But here are some things kids can do to earn a little extra cash over the summer.

• Babysitting of course. Check your local hospitals to see if they offer a babysitting class, or learn more about babysitting and earn a babysitting certificate here.


• Get your lemonade! Not only is a lemonade stand fun, but you can shake things up and offer home-made cookies too. Don't forget to pay Mom and Dad back if they help with supplies.
  Walk dogs/care for pets. Lots of people are too busy over summer to take care of their pets. Start your own pet care, dog walking business. Those long-haired dogs might need brushing, too.


• Yard work and gardening is another good idea. Offer to cut grass, weed gardens and do general yard work for people. Seniors especially can use the help in the summer.


• Hold a car wash! Get a group of friends together and with parents’ permission start your own car wash.


• Have a yard sale. Clean out your closets, toy chests and basements of all the toys/books you no longer use. You'd be surprised how much stuff you no longer use.


• Teens can visit here to learn how to find a job, where to get working papers, where teens can work, what to wear for an interview, and how to obtain references.

There are laws about kids working so you have to be creative when you are young to earn money. Get your parents involved too, they may have some good ideas. They may even be more encouraged to help you out if they see you trying to make your own cash instead of just holding out your hand.

Learning the “Real” Value of Money through Giving

I have always believed that a necessary part of learning about money is learning how to value what you have and sharing with people who do not have as much as you. In an effort to teach these lessons to my own children, my wife and I helped our sons Keanu and Tristen establish their own non-profit organization call Turn Kindness On (TKO) Helping Hands. TKO Helping Hands motivates children of all ages to change their world through volunteering, harnessing their uniquely empathetic energy and empowering them to build a lifelong relationship with community service.

During a recent family vacation to Africa, our family did what we always do when we travel. We took money and supplies collected through the efforts of TKO and local students and delivered them to children’s organizations in the communities where we visited.

Click here to watch and see what a difference you can make when you understand the “real” value of money.

What is Diversification?

Have you ever heard some say “don’t put all of your eggs in one basket”? What does that mean? Well, if you put all of your eggs in one basket and that basket drops, you run the risk that all of your eggs will be broken and lost. But if you put a few eggs in two or more baskets and only one basket falls breaking only its eggs, you still have some good eggs in your other baskets that didn’t fall and break.

That is diversification: putting your money in several different places or buying some stocks from several different companies. For example, if you use all of your money to buy stock in only one company and the value of that stock drops then you could lose all of your money. But if you diversify, maybe you buy stock in several different companies and put some money in the bank for saving and keep some money at home in your piggy bank. Then if the value of stock in one company goes down, you only lose the money you invested in that stock but should still have money in your other locations.

By the way: what’s the most you can ever lose in stocks? The amount you invested. What’s the most you can gain? Unlimited – anything can happen.

How Much Do Stocks Cost?

When you think about buying stock, you should remember that there is risk that goes along with it, but there is also opportunity. So if someone asks the question “what are the best companies to invest in,” the answer must take into consideration the amount of risk that investor is willing to take. If the investor says, I don’t want to lose this money to make a fortune, but I really think it’s a great company - there are lots of companies that look promising. Many of them you’ve never heard of, but they believe they’ve got the next newest idea.

Have you ever heard the expression “Time heals all wounds”? When you get older, you’ll have typical grown-up experiences – like with boyfriends and girlfriends. You’ll break up and think the world is coming to an end. But over time, you’ll get over it and your life will get back to normal and things will be OK. Well it’s similar with stocks. If you invest in enough stocks and diversify – buying some companies that are less risky and some with medium risk and some that are real risky – over time it should all be ok. However it's important to remember that diversification doesn't guarantee you will make money and it is still possible to lose money in your investments.

Bankers nationwide are celebrating National Teach Children to Save Day on Tuesday, April 21. Founded by the American Bankers’ Association Education Foundation, the day is dedicated to educating youth about the importance of saving.

Parents, Here are Five Tips for Teaching Financial Responsibility

1. Value of Saving – Teach children why you save and why they should save by using everyday examples like buying groceries. Illustrate how savings can grow by collecting money in a jar or container.
2. Needs vs. Wants – Explain the differences between needs and wants and how to prioritize spending. Use examples like toothpaste vs. another video game.
3. Allowance – Consider an allowance to teach how money is earned. Provide an allowance in a way that children can save part of it and spend part of it (for example, if an allowance is $5, give five one dollar bills so some can be saved and some spent).
4. Set a Goal – Setting a goal for savings or to buy a desired item will help teach a child to be responsible for him/herself and reinforce the feeling of accomplishment when the goal is reached.
5. Open a Savings Account – Establish regular saving habits that will last a lifetime by opening a savings account with your child.

CHECK OUT THE LINKS on our sidebar for lots of fun resources to help your children save!

What Causes the Stock Market To Go Up and Down?

Have you ever heard of supply and demand? When there is a lot of something – a large supply – the price goes down. When there is a small supply of something, the price goes up.

Let’s say when it’s time to eat, there’s only one sandwich and everyone wants it. The price would go up. The person with the most money will be able to buy it. But when there are lots of sandwiches the price goes down. It’s the same with stock. If a lot of people want a certain stock – and there are a limited number of shares, the price goes up. If a lot of people want to sell a stock, and not too many who want to buy it, the price goes down, because the supply will be greater. When everyone wants to buy a stock, the price goes up.

The other thing that affects the price of stock is emotion. When people are very excited about the market and they want to make a more than anyone else and they are willing o do anything – that’s when the price of stock goes really high. That’s called greed. When people are greedy they’re willing to do anything they can. But when people are scared, what do they do? They hide. When people are scared and they sell their stock and put their money in the bank, they are sort of hiding. What’s happening in our markets today? People are scared. There’s a lot of money sitting in the bank.

What’s the Difference between Stocks and Bonds?

Stocks are ownership. When you own stock, you own part of a company. Bonds are “loanership”. You’re loaning money to a business or the government. In other words, a bond is debt.

So, when you buy a bond, you are lending money to a company. When you own a share of stock, you own a part of a company.

Let’s say you own a share of stock in a company that operates an amusement park. The company sells stock because they want to grow the company and they need to get capital, which is the money they can use to invest in growing the company. Now, if you own some of that stock, you own part of the company.

COACH'S BOOK RECOMMENDATIONS

Kids Ages 6 - 11

Money Savvy Pig

By Susan Beacham

This is a small plastic pig that resembles a traditional piggy bank with a twist -- instead of one slot, there are four marked "save," "spend," "donate" and "invest."

You can also purchase a workbook with the Money Savvy Pig that allows children to color the pages while they learn important concepts such as interest on savings, goal-setting, smart spending, long-term investing and entrepreneurship.

The Money Savvy Pig is the perfect introduction to personal finance.

The Kids Allowance Book

By Amy Nathan and Debbie Palen

This charming book tells children how to get an allowance and how to save and spend it wisely. The book includes responses of 166 kids to questions about the pros and cons of allowances.

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Tweens and Teens
Personal Management

By Brent Neiser

Educators too often overlook personal finance basics when teaching life lessons to preteens and teens. As a result of the absence of financial education in our schools, young people with little or no income wind up in debt. Personal Management, is an antidote to this oversight.

This booklet has been used for many years to help Boy Scouts earn their "personal management" merit badge. However, you don't have to be a Boy Scout to benefit from the practical wisdom found here.

The booklet helps young people learn about saving, spending and investing as well as how to create a budget, use credit and track their spending.

Cash Cache

By Susan Beacham

This personal finance organizer is intended to help teens learn the basics of personal finance: saving, investing, credit cards, earning money, paying taxes, spending and donating. It also includes basic information on the stock market, setting goals, budgeting and bank accounts.

Teens can learn basic personal finance lingo by using the glossary of financial terms.

The Money Book for the Young, Fabulous & Broke

By Suze Orman

People in their 20s and 30s often have big expenses and enormous debt. As a result, they have little leftover for savings. Orman's book tailors advice to this generation's situation by focusing on credit cards, college loans, income and opportunities for saving.

Teens who recently graduated from college and read this book liked the tone and thought it made sense. They said they were particularly impressed with discussions about how easy it is to fall into debt and the dangers of owning too many credit cards.

Saving for Retirement Without Living Like a Pauper or Winning the Lottery

By Gail MarksJarvis

This book emphasizes the importance of starting to save early. Author MarksJarvis focuses on using retirement plans to defer taxes, collect employer contributions and accumulate greater levels of retirement wealth.

Other themes in this book include the importance of managing costs and the long-term benefits of asset allocation.

An award-winning writer, Gail MarksJarvis is a long-timer personal-finance columnist, currently writing for the Chicago Tribune.

When A Company Needs Money, How Do They Get It?

When a business needs money, they can get it one of two ways. They can sell part of it – or they can borrow. Whey they sell stock, they sell part of the company. But a company may not want to give away ownership of all of the company. They may prefer for you to invest in their company as a bondholder. A bond is a promise to pay off the loan. So if they need money, they may want to borrow it – so they sell bonds – and promise to pay back the loan.

Now, let’s say the company does really well, and the value of the company increases. Does the value of your bond increase? No – because it’s just a promise to repay the loan. But if you own stock in a company, and the value of the company goes up, then your stock is worth more.

What is Compound Interest?

There are two kinds of interest – simple interest and compound interest. You probably know how simple interest works.

For example: If I have $10,000 and I earn 6% interest, how much money do I earn after one year?
Answer: $600

If I earned 6% every year for 12 years how much money would I have earned in interest?
Answer: $600 per year x 12 years = $7200. So adding that to my initial investment, I’d have a total of $17,200

Compounding Interest
If I have $10,000 and I earn 6% compounding interest, how much money do I earn in interest?

Answer: Well, if I apply the “Rule of 72” (which we discussed in our last post) 72 divided by 6 (the rate of interest) = 12. That means my total money will double in 12 years to $20,000.

So why is the total amount of money higher with compounding interest than with simple interest ($20,000 compared with $17,200) if they both receive 6% interest?
Answer: With simple interest I earn the same amount of interest each year on the original $10,000. So every year I only receive $600. With compounding interest, I add $600 (interest) to my original $10,000. Then the next year I earn 6% on $10,600 which is $636. When added together I have $11,236. The following year I earn 6% on that amount

End of year 1 - $600 + $10,000 = $10,600
End of year 2 – 6% x $10,600 = $636. $636 + $10,600 = $11,236
End of year 3 – 6% x $11,236 - $674.16. $647.16 + $11,236 = $11,883.16
End of year 4 – 6% x $11,883.16 - $712.99. $712.99 + $11,883.16 = $12,596.15
End of year 5 – 6% x $12.596.15 - $755.77. $744.77 + $12.596.15 = $13,391.92

Do you see how this is calculated? Dan you continue to do the math?