The heating bill drives me around the bend. I live in the Northeast, it’s freezing out, and I’m being gouged every month on the gas bill. In the summer, I’m gouged for the electric bill.

We live in a big drafty house, naturally the worst setting for heating bills. And of course everyone prefers to walk around in T-shirts and bare feet, cranking the thermostat.

The only way to stop this is to put teens in charge of the heating bill and challenge them to save money on it every month.

First things first. Show them the heating bills for the past year. Show them the seasonal difference, of course, if you have gas heat and electric air conditioning (if you even use air conditioning.) Then show them the bills for the last few winters, and how the prices have escalated.

Have a discussion about what they think causes this rise in prices. Do they think we, as a country, don’t have the reserves? Are we really at OPEC’s mercy? This is such a great civic conversation because it had global implications, and next time they see oil prices as a hot topic on the news, it will sink in a little bit.

Now the actual two-month game plan:

1. Have teens set an achievable goal for the first month: February. Whatever you set your thermostat on, lower it by 5 degrees, if you can. Make sure you make it even lower at night–maybe 7 or 8 degrees. The idea is to see how much this saves. If people are screaming at the end of Day 1, try lowering it 2 or 3 degrees at first, then work your way down.

2. Okay, it’s going to be colder, so the next step is to maintain the heat the house has. With sweater and socks on, have your teen go room by room, seeing where the drafts are and what can be done to prevent warm air from leaving the house, and cold air from getting in. They should make a list of drafts and possible solutions: Towels rolled up under drafty doors, to seal in heat, a little caulk on older window frames. In my kitchen, there’s actual breeze if you stand near one of the windows. Basement ceilings often need insulation stuffed up in the air.

3. Let your teen go after these drafty areas. Do have them keep track of what you need to spend to fix the problem–a tube of calk, insulation, etc. That way they can see how long it would take to get a return on their investment. Warning: When working with insulation, make sure they wear gloves and goggles and are supervised.

4. If you have a fireplace, put the teen in charge of building fires in the evening, to keep the heat in once you turn down the thermostat for sleeping. And bring out the extra blankets! If your house has a lot of windows, teens can learn about the money saving properties of solar energy. On weekends, if they light a fire first thing in the morning (hard to do on weekdays unless someone works at home), the house can heat up, preventing the heater from kicking on to live up to the thermostat’s promise.

That will bridge the time until the sun is at its warmest, and you open drapes and blinds to let the sun warm your rooms. If you don’t have a lot of windows, then the teen’s focus will be on insulating every room, and keeping the fire heat in.

Let them notice the difference and make note of it.

5. After one month, see what you’ve saved in heating bills. For March, try to lower the thermostat even more, if you can, especially when no one is home. The habit of coming home, turning it up a bit, and lighting a fire, is also quite a relaxing ritual.

By April, the challenge should let up a little bit, depending on where you live. But then your teen will be primed to fight the heat. We’ll get to that post when I can bear to think of wanting to cool off.

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One of the things I notice most, with my college students, is how impolite many of them think it is to ask questions of authority figures–unless, of course, it’s to ask for an extension for anything I ever assign, or to ask their parents for money.

But if they’re faced with, say, the dean, who has just raised their tuition again, many would be tongue tied if given the opportunity to ask why. They would think they don’t have the right to ask, and that they’re being rude.

That has to change before they’re in the workforce.

So, if your college student (or teen) has had a job for a while (six months is a good average), has performed well, the boss is enamored, and it’s not a fixed fee sort of job (like babysitting), teach them how to ask for a raise.

By the way, this same approach works for someone with an internship that’s coming to an end, if they want to ask to be kept on as a paid employee.

Here are the steps:

1. They need to believe they are a qualified candidate and have a right to ask. Have them write a list of the tasks they perform at their job. Next have them write a list of what they were hired to do. Does the second list contain more items? Have they done everything they were asked to do?

Usually, when someone is at a job for a while, and they’re doing well, they’ve added more tasks along the way. This is a good leverage point for asking for a raise. Remind them of that. It’s also a good reality check for a kid who may have more of a sense of entitlement.

2. Once they’ve established that they are a good candidate for a raise, make sure they understand that it is perfectly polite to ask. It is their right. Not only that, the boss will admire them for it. Say your kid wants to manage people, or move up in the company. The boss will think that someone who can take initiative, ask for what they need, is a strong employee.

3. Have them do research to find out how much others doing a similar job are being pad. They can Google it for some jobs, or ask people they know. See what the customary range of pay is. They don’t want to ask for a raise that is too much, or too little.

4. Have them think of extra tasks they can do at their job. When my daughter asks for a raise in her allowance, or she wants extra money one week, she always approaches me with an idea for an extra chore she can do. This principle is a good one to carry to the workforce.

Asking for a raise is a very important rite of passage for kids. It paves the way to asking for a promotion. And it will make them work harder, once they get that raise. Wish them luck!

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This is some weird new obsession of mine. It’s probably eBay’s or Craig’s List’s fault, but I can’t stop thinking about what the stuff in my house is worth on the open market. Eventually, why is anyone going to be willing to shop in a store?

Ah, and that’s an interesting point for teenagers, who love stores. I think they should know about value and depreciation, and take those things into consideration when they spend their money, so they develop smart buying habits.

So, here’s a fun game–a sort of 21st century Price Is Right (I’m dating myself with that TV game show, aren’t I? So be it. Who am I kidding anyway.)

Go through each room in the house with your teen and a friend, if there aren’t siblings. It’s just more fun to play to win. Each kid should be carrying a clipboard. (In our house, my husband was the other player since he is clueless about what anything costs). Have them write two columns on a page: one for Original Price, and one for Online Market Value.

First, have each kid write down a guess for what you paid for each piece of furniture in the room. Say you’re in the living room: What did you pay for that sofa? Don’t tell them.

Do this for each piece of major furniture in the house, room by room. You can get as granular as you want. It will be an interesting side note to see if you remember the price of certain things, or if your spouse does, or if ultimately you have to look up the cost of the item new.

Once they have their Original Price list for furniture, see which kid came closest to the real numbers. See if there are patterns, such as if they know what electronics cost, but not lamps.

Give 1 point to the kid who comes to the closest to the purchase price. Give them 2 points if they come within 10% of the original price, and 3 points if they come within 5%.

Once they have the original price assessed, take a moment for it to sink in how much having a house costs. See which is the most expensive room to furnish.

Then have them write down guesses for how much each item is worth on eBay or Craig’s List. Just choose one for simplicity.

Then have them go online and score their guesses the same way you did the first round. If there is a range of prices, for, say, the sofa, pick the midpoint price for the category (e.g., a sofa in good shape; or a futon ravaged by cat claws.) Condition of the furniture is very important in the game–and a great way to nag about keeping things clean and in good shape.

Of course see who wins. Also see if they scored any multiple points here–for coming within 10%. Or were they shocked by the depreciation and guessed way too high, based on the purchase price?

Another possibility, given their age: That teens will be more accurate about the market value online, and far less accurate about original purchase price.

I’d love to see the patterns. Have fun and don’t get too depressed. We all paid too much for everything if we predated eBay.

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As we start getting W2s and 1099s in the mail, dreaded tax time starts creeping into our consciousness, just as we’re getting over the Christmas spending weight gain. The older I get the more I truly understand the phrase:
“It’s always something.”

Let’s at least seize the day and teach our kids what the government really does with taxes, and not just the federal government. Now, this could get sticky and political, so let’s avoid that; we’ll just turn the kids off. In this case, sticking to theory may be best. The idea is that they learn the concept. No doubt the moment they start paying taxes, they’ll form opinions about it.

In fact, this lesson, more than any other we’ve done so far, is a discussion lesson. The idea is to spark conversation about each tax topic.

1. Income tax

We’ve touched upon income tax before, but it’s an easy one to start with; the warm up. Show kids your W2s or 1009s if you’re comfortable. Show them that every penny you earn is taxed. (Let’s save deductions and write offs for another post. I will do a post on this, especially important for college students right now, because there are more college expenses considered deductible than ever before.

Try and have them guess what the federal and state governments do with income tax. Get them started with highways and police forces, and see what else they can come up with. This can be fun game. Give hints: fire trucks, ambulances, street lights, subway systems.

Ask them if they think it’s possible to track government spending with your tax dollars. Once they understand what taxes are spent on, this should create an interesting discussion. Go online and see if you can find state and federal budgets, and what the taxes were spent on.

Bring up this question: Do you think income tax money should be used for war?

2. Property tax.

Explain that this is the tax on both your land (if you own land) and your house, if you own one. (We’ll also explain in the future post that these taxes are actually deductible on your federal taxes). Explain that this tax is local and is supposed to go for local roads, local services such as snow plowing in winter.

Have them guess what else, and ask them if they think the local government, your town, does a better job providing for its citizens–spending the money better–than the federal government.

3. Retail tax.

If you’re state does impose retail tax, then here’s the discussion point: What do states use this tax for that’s different from other tax they collect? And can they guess what a state like Delaware, which has no sales tax, does to raise revenue? States need money, whether they tax or not.

The answer to the Delaware question includes: lottery tickets and a lot of parking tickets and moving violations and paid parking. See what else kids can come up with and write in. I’ll give more answers.

The whole idea of this lesson is for kids to understand that they have stake in the community, the state, the country. It’s a good reason to read the newspaper and pay attention to politics, both local and federal. It’s a good reason to vote.

They’ll look around their town a bit differently, wondering how certain services are paid for. Maybe it will even translate to your home and they won’t just think money grows on trees and that you magically provide everything.

I’m very curious about the discussions you have with your kids about taxes. Get them talking and write in!

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I know I’ve hit a good topic when my husband starts squirming on the sofa. Maybe it’s the new year, but I’m in the mood for handing out good doses of reality to the kids in my life.

I can make up all sorts of games for my students to learn about paying bills. Or, for a change, just let them do it. If you use online bill pay, put your teen in charge of this duty for the next month, and without saying a word more, see what the experience inspires. What will they have to say after paying bills for a month? Please write in and tell me, I’m dying to know.

Okay, here’s what to do:

1. Your teen is responsible for getting and sorting the mail. You can choose whether they pay each bill as it comes, or if they pay all the monthly bills on a certain day. You don’t have to give them a reason for which way you want to do it, if say, you don’t want to reveal that you need to wait for checks each week.

2. To pay the bill, the teen looks at the bill, makes sure it’s okay. They may need to ask you whether it looks correct. If it is correct, they log on online, pay it. If it’s not correct, they’ll need to call customer service for, say, the phone company, and say there’s a mistake. Stay on another phone extension the first few times they do this. Great lesson.

3. Then the teen needs to create a filing system for the hard copies. Let them invent their own. The whole idea is to see what they’ll do. Give them a filing cabinet–or box–and some folders to label. Tell them that each bill should have the date it was paid written on it, and any other pertinent information.

4. Then they should log the payment information in Quick Books or whatever other accounting system you use, so they can see weekly and monthly expense totals.

Every teen will learn many valuable lessons from this exercise. If they like it, have them keep doing it. Most fascinating is the questions they’ll come up with, or ideas for cutting expenses. Do try and implement their ideas when they have them.

I think this is a great job to pay a teen for, in the form of allowance. Especially if they have to deal with customer service departments!

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We think of expense reports as something we hand in to employers in order to get reimbursed. Well, let’s take a twist on this concept to raise our kids’ awareness about 1) exactly how often they ask for money, 2) how frequently they get what they ask for, and 3) what is considered a valid expense.

Number 2 is my favorite because it’s good for them to appreciate what they get rather than be greedy for more. And I mean that in far less a judgmental way than it sounds. I know I don’t always remember to appreciate what I have. Staring at what you’re getting weekly in the form of an expense report is a good wake up call.

So here’s how it works (and there are variations, depending on your situation). But you can use this skeleton. And do first explain how a real world, corporate expense report works and why this is good practice:

In the real world you spend your own money up front and get reimbursed. Because of that, you need to be scrutinizing about each expense. The company always has the option to reject items on your expense report, in which case you’d be stuck with paying the expense. There’s an inherent check and balance system in expense reports.

Then explain that because you are still a dependent without salaried means of fronting the money, we had to take the expense report concept and work it a bit differently to get at the same lesson: building the same good habit of scrutinizing expenses, and getting overall picture of how much is being spent.

Okay, so here’s how to go about it:

1. Either keep an expense report file on the computer, or get your teen a booklet where they can write down every time they ask for money, or spend their own. I recommend a booklet because they can have it on them at all times, and get in the habit of immediately writing things down, versus waiting to be back at a computer.

2. Have them make three columns for each weekly expense report: Money I Asked For/Reason for Expense/Did I Get It or Not yes/no. The great thing about these three columns is that it conditions kids to understand your point of view. They will see very clearly the patterns of what you condone and what you don’t.

3. Have them keep a separate record of expenses they pay for themselves, with whatever allowance or side job money the earn. Two columns on this one: Amount Spent/Reason for Purchase. The idea here is to see if they’re freer with your money or their own.

4. Then have them do one final exercise for each expense report (2 and 3): They should go down the list of expenses that were funded, and ask themselves if it was worth spending the money, or not. Ask them to look for patterns after they’ve finished a month’s worth of weekly expense reports. The key here is to see if they regret any types of purchases consistently.

It may be advisable to start this expense report lesson with only discretionary spending included, as opposed to clothing allowance money or other living expenses. Certainly include living expenses after a while, but it will be interesting to see just the desires first, and how frequently they get what they want, and how frequently they like what they get.

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It could be video games. It could be clothes. That’s what even the conservative marketers claim teens still spend most money on, divided along the expected gender lines. I can hear every teen I know saying I’m stereotyping. But that’s not the point. You know when your teen has an addictive shopping habit. And it’s important to break those habits.

It’s not enough to just lay down tough ground rules, such as telling them they can only spend their allowance or side job money, but you’re not going to keep giving them extra money. That’s treating the symptom, not the disease.

I’ll use clothes shopping for the following habit breaking program because that sort of shopaholism goes far beyond teens; it’s endemic in our culture. But the advice does work for any addictive shopping habit.

The step by step process may sound odd for the first couple of steps, but bear with me, there is a method to it.

1. Tell your fashionista that for two months, no clothes shopping. That includes accessories–hair thingies, purses, etc. Personally, I also strongly recommend including makeup in this. Your teen will be devastated, so hurry up and move on to telling them about #2 and 3.

2. They can spend their money on anything else. Normal allowance or side job money rules apply–for instance, if you insist they save a portion of their money, they must still do that.

3. Reward them for stopping the rituals that feed the habit. Let me explain. A shopaholic will be constantly looking at clothes, in magazines, online, at the mall. The key to breaking the habit is ending the focus. So, for each week that they don’t read fashion magazines, or window shop either online or at the mall, double their allowance. This is a critical step. Be encouraging and kind here. It may be very hard for your teen to do this. Have other magazines around for them to look at; magazine flipping can be a way they’re used to relaxing.

4. Encourage a new physical or artistic activity. Introduce running, yoga, a new team sport. Breaking an old habit is made easier by being involved.

5. After the first two months, allow your fashionista to buy one piece of clothing in the third month. Just one. Your teen’s perspective will have changed. They will probably make a more careful selection, something they actually want instead of something they’ll wear once and throw into the pile. Talk to them about it, and what the process is like. Don’t be an I Told You So. Ask how it felt to purchase that one thing. Talk about how much more money they’ve had for other interests, such as concert tickets. Keep up the bonus money for no ritual habits like fashion magazines.

6. For the fourth month, tell your teen that one purchase per month is the new norm. And yes, buying a lip gloss counts as one. No more bonuses for staying away from the ritual stuff, unless you think your teen is still really battling the habit.

Three months can break a lot of habits. It will definitely change attitude, awareness, and behavior. Some teens may be more obsessive, and, say, save their money, and then take that first shopping opportunity in the third month and buy something outrageously expensive.

Let it go. See if they really love that thing they bought. If they do, great, they’ll know the value of saving up for something really good, versus a lot of impulse, addictive buying. If they don’t love it, they’ll learn that they were acting out and the only person it negatively affected was themselves.

Do try to be patient and positive. Even if you find the shopping habit distasteful, it is always hard to break a habit. Talk to your teen about how important it is not to be a slave to shopping. It’s not just important in terms of their relationship to money, but their emotional health as well. Ask how they feel, a lot.

Good luck and please send on any feedback from the teens themselves, if they go through this process.

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The new year is a great time to open a checking account for your teens if they don’t already have one, and establishing credit for your college student kids. And for both age groups, get them started using a debit card and fostering the habit of tracking and understanding their spending habits.

It’s never been a better time to open these accounts because the features in student cards are more solicitous than ever. And while your college student is still home on vacation, you’ll have the time to sit down together to walk them through how to do everything online, rather than trying to go over it on the phone.

That said, there are a few very important habits your kids need to get, and get quickly, in order to protect their identities and their credit. So even if your kids already have accounts open, use this time to teach them four important security habits.

Good security habits in an electronic payment world:

1. Check your account online daily, whether it’s debit or credit. This is not just a good security habit, it doubles as a good fiscal habit. There is zero reason not to do it. It’s especially important to check debit card account activity because in some cases, if there‘s fraud–someone stole the card number at school and managed to use it–consumers must notify financial institutions promptly, in order to be fully refunded by the financial institution. With credit cards, there’s no time limit. Credit card purchases are always protected against fraud.

2. Teach your teen good storage habits for their card. Don’t leave them lying around. If they don’t have a wallet, encourage them to get one. Cards that are kept in a pile on their dresser, and stuffed into jeans pockets, get lost easier. Plus, good storage protects the magnetic stripe and creates good caretaking habits for all things monetary.

3. Do not lend a debit card. This may seem overly strict or paranoid, but say your teen and a friend are pulling into a gas station. One pumps the gas and the other runs inside for a soda. Teach your teen to be the one to go in, rather than handing a friend the debit card to use on their behalf. This is not to say the friend is untrustworthy. Again, it’s the notion of habit. Your teen should think, at all times, about security with debit and credit cards. Keep it in your own safe possession.

4. Encourage kids to use ATMs that are in a busy location, not ones that are isolated or unwatched by security cameras. That really goes for any kiosk, or even gas station, that accepts credit and debit cards. Have them wiggle the card reader (where your swipe) to make sure it’s not a scam one hitched on the top of the real one. It’s an easy habit to get into. There is unfortunately card data theft out there, and they should be careful. I try to use the ATM of my financial institution as well–which is also a great money saving idea because you pay no ATM fee–because your own financial institution will take better care of you if there is ever a fraud problem.

The sooner kids adopt these habits the better. There’s no question that debit and credit cards are a huge convenience, benefit, and can teach great money habits because you track all of your spending. Having them is also crucial to being monetarily function in our society. And so are good security habits. Try them out yourself, too!

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My husband of course wants to know why all my New Year’s resolutions involve him. I hate it when he’s perceptive.

If you are a masochist, you can make this New Year’s resolution about yourself, but I say why bother.

So here’s the plan: We all have some things we do that waste money and that are terrible habits. Here’s one of: I always return movies to the video store late, and run up late fees. I can’t seem to stop this. Drives my husband nuts.

Here are a couple of his: He’ll buy a shirt without trying it on, and then hate it. But will he return it? No, he’ll let it sit in his closet until he drives me bananas and I return it. (Yes, we all know that I’m enabling his behavior, but he knows I can’t help but return it.) He will go to an ATM that’s not his bank and incur a processing fee for taking money out. He’ll do this even if his own bank’s ATM is close by.

Here is the challenge for your teen: Have them interview your spouse–or, sigh, okay, it can be you–and find at least five money wasting habits. Then have them track your or your spouses behavior for those habits for one month.

They should make a weekly chart that shows how much money is wasted. Each bad habit is a line item. Next to each item, they should have one column for money wasted, and one column for money saved.

Your spouse should improve over time, with awareness and scrutiny applied. The following month your teen should do the other parent, and the third month themselves. The reason for teens to start with your and your spouse, rather than with themselves, is it’s simply more fun. Good luck!

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