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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Any time there is a way to zoom in on something that is tangible and affects the family directly, it is a great opportunity to teach kids about the macroeconomic picture. Teach kids about mortgage refinancing and they’ll learn about why we’re in a recession and what all the subprime talk meant anyway.

This is a lesson for parents who have looked up the value of their house recently and know it’s a candidate for refinancing. Make sure to do that before proceeding. Also make sure that you are credit worthy for a refinance.

If you’re a candidate, it is truly a good time to refinance a mortgage. As the economy strengthens, interest rates will certainly go back up. And that is the first thing to tell teens. Tell them there is an inverse relationship between lending rates and the health of the economy.

And here’s the theory: When the economy is unhealthy, people and businesses alike need to be encouraged to spend money, take out loans, feed the economy with payments, which in turn makes money flow both ways, to corporations, who in turn employee people, and therefore pay them.

When the economy is healthy, there is no need for such incentive. People can afford things and shouldn’t take on too much debt, so debt is expensive. (That’s the honorable banker theory, by the way. I’ll leave other theories to your imagination.)

So we start with a premise that the economy is still struggling, though recovering, therefore it is an optimal time to refinance. Wait too much longer and it will be more expensive.

That brings us to the steps to learn about mortgage refinance. You may be surprised what your teen finds out.

Define mortgage for teens. Explain that the bank really owns your house. You take out a loan to live in the house until you either pay it off or sell it. Traditionally, people take out 30-year loans, and each month a portion of their mortgage payment goes to pay off the loan (called the principal amount, usually a small portion), and a portion goes to pay interest, which is the money the mortgage lender earns for your privilege of borrowing money and living in the house. So interest is mortgage lender’s monthly fee.
Show them your mortgage statement, so they see exactly how much is owed, and how much is paid toward principal and interest each month. They should be appalled right about now.
Tell them about your interest rate and how that number is the one that determines the monthly fee you pay the lender for borrowing the money. Show them how that works. See our post on interest rates and how to calculate them.

Tell them that refinancing means trading in the loan you have for a new loan. Essentially, this means trading in your current interest rate for a lower one. That is the only time it is worth refinancing, because a lower interest rates lowers your overall monthly payment and debt.

Send them to your mortgage lender’s website to research refinance options. Tell them to find out what the refinance costs are. They can call the mortgage lender to find this out. The best bet is to actually take them to your financial institution and have them explain in person. Make sure kids get an explanation that there are closing costs and other fees you need to pay just to get the refinanced option.

Make sure they also get an explanation about credit ratings and how much income you need to qualify for refinancing.

Have them calculate how long it would take for the refinance to start paying for itself. This means you need to pay off the closing costs and other overhead. Until that is paid off, you need to add that to monthly payments. How many months does it take before the lower refinanced monthly payment starts to save you money (i.e., how many months before closing costs are paid off)? If it will take, say, a year, but you are planning to put your house on the market in 6 months, refinancing might not be a good idea. Explain to them that refinancing is a good idea when you intend to live in the house for a long time. Lenders will not refinance any mortgage for a house that is on the market.

You’ll be surprised how much teens will learn about what happened to our economy. They’ll also understand the enormity of owning a house and how important is to start saving for it.

Let me know if your kids find you a good deal!

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It’s the end of the year. Many people have come up to me anxious that they’re in debt, and a big spending time is upon us, while their promise to save money for Christmas and in general has somehow evaporated.

The most important part of the concern: Their kids don’t quite get it, despite parents’ efforts to get them to understand. They want 2010 to start off right, with some saving going on, and they want to know how to get the kids on board in a positive way.

So, I have an idea. Here’s the 7 Debt Removal Steps game to set up for your teens and college students. I will emphasize that college students need it as much as teens. My college students do not have a grasp on this concept, I can assure you. It makes me physically itch every time I bring it up in class. They think I’m such a mother hen, it’s embarrassing. Not embarrassing enough for me to stop, mind you.

Anyway….

Start with giving your kids a fake conundrum. You can of course make this your real financial situation, but if that’s not comfortable for you, just say you’re using pretend numbers. They’ll still get the concept that adult family life requires good financial sense and strategies.

So tell them your monthly income barely covers your monthly nut right now, and you have credit card debt. You want to save money. Actually, you need to save money or this cycle of debt will never end. The coffer needs to have extra in it for hard times. But how can you save?

Pose this problem to your teens. Make sure to explain that credit card debt is the most dangerous debt in terms of credit rating. You cannot be late with a single credit card payment or it will show up immediately on your credit report and adversely affect your credit rating.

I advise pulling your credit report and show your teens what’s on it, how things are scrutinized and rated. You can get a sample credit report online as well, if you don’t want to reveal your credit to your kids. Either way, it’s an eye opener. Pull your report from all three credit rating companies. Sign your kids up to get periodic credit reports, if they’re over 18.

7 Steps to Debt Removal

1. Your teen is going to make a couple of lists: First is a list all variable family monthly expenses. So, food is one, each utility bill, gas for the car, etc. Give them data for this chart. For this list, do not include mortgage or insurance or other dollar amount you cannot change.

2. Second list is all the debt that requires monthly payments.

3. Third list is all the fixed monthly expenses, like the mortgage, auto insurance, whatever else you have: maybe a storage unit, a business loan. Include everything.

4. Then give them the monthly income dollar amount to pay for everything on List 1 and 2 only. If you’re using a real monthly income amount, subtract mortgage, insurance and other fixed amounts. Only give them the dollar amount designated to pay for things on List 1 and 2.

5. Challenge your teen to cut expenses from something each week to put into savings. Remind them that they can’t change sending money to debtors.

6. Open a savings account to deposit the savings.

7. For more advanced options, have your teen research your fixed monthly expenses. Have them go online and compare insurance programs, mortgage refinance options.

This process forms really good habits. First, it makes your teens conservative in spending if additional revenue sources aren’t available. That is what living within our means is all about. Second, the more advanced part of the process, Step 7, teaches them to dig deeply, and rethink even if what we considered fixed problems.

Perhaps the latter is most important. Once we get a handle on what we perceive as changeable, we should always look at what we perceive as permanent to see what the real options are.

I will do separate blogs on how to comparison shop family auto, health, and homeowners’ insurance, and how to research mortgage refinancing.

Good luck. As always, I’m interested in ways teens came up with to pinch pennies here and there.

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Everyone once in a while– a while being the key phrase here–it will look like a lightbulb went on above my husband’s head. His eyes will open wide, and he’ll pull himself up to a full seated position on the sofa.

That’s the sign that a household project is going to start soon.

The last project was changing our lightbulbs from incandescent to the environmentally friendly compact fluorescent light bulbs (CFL). Every single one of them in the house, including the mood lighting I used to have in the sitting area in the living room, which has a dimmer. Except he bought non-dimming bulbs. They have dimmable compact fluorescent bulbs, but he was too cheap to buy them. Or forgot, and was too lazy to go back to get them.

Before I waste too much space on the argument over the dimmer, let’s just say that his idea to change all the lightbulbs was the first time he has ever sparked a money lesson in a positive way.

It is very difficult to teach teens cost effectiveness, and why cheapest isn’t always really cheapest. Teens live in the moment, and long term implications are simply hard for them to see as tangible. Yet it’s one of the most important money lessons: How much does something cost in the long run when it is an item with a long shelf life?

If they can get their minds around the cost effective concept they will be much better managers of money. And new age lightbulbs–those coiled ones–are a perfect opportunity, if you’re willing to have your house go green. The cost out of the box for CFLs are higher than regular old lightbulbs. So teens have to do the math to get to the cost effectiveness.

It’s a project teens can handle. Have them go through the house and count how many bulbs there are. Then have them comparison shop the best prices for the number of CFLs you’ll need to overhaul your home. Have them compare costs for online offers versus your local hardware store.

The basic equation they need to understand: A CFL uses 75% less energy and lasts about 10 times longer than an incandescent bulb. So even if it takes 6 months to pay for itself (the average), it’s still worth it because the CFL lifespan is so much longer than 6 months. Point out that they’d have to keep buying incandescent bulbs, which don’t even last 6 months. CFLs can last years.

For a fun math challenge, ask your teen–once they have priced the CFLs and regular bulbs–if they can figure out how much money a CFL saves over its lifetime if its lifetime is a) 1 year; b) 2 years; C) 3 years, etc. etc.

Now, that challenge will be based on only one factor: that the fact that the CFL bulb pays for itself in six months.That return on investment timing may vary, depending on the prices your teen finds. It may be that it pays for itself in 5 months, or 7 months. In any case, that’s a one variable challenge.

Here’s the more advanced challenge: If a CFL bulb uses 75% less energy AND it lasts, say, 4 years, then how much money do you save over its life? They’ll have to calculate energy cost savings for the CFL versus the incandescent over 4 years, then add it to the mere lifespan savings.

Good luck, and make sure they purchase at least a few dimmable ones!
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This time of year is even scarier than the beginning of December in terms of me being an ATM. Maybe because kids can blindside you now, and by December you’re ready for them.

So innocently, my daughter said to me yesterday: We’re going to see her cousins on Thanksgiving, the first holiday of winter, as she calls it, and she knows just what gift to get them. But we should order it online now before they run out.

I was sitting at the computer entering my credit card number on the latest greatest kid electronics before I realized that we were also going to see the cousins-aunts-uncles over Christmas.

Wait just a minute. We¹re going to do Christmas/Hanukah/Kwaanza/Winter Solstice/Whatever shopping at Thanksgiving and then again in December?

How did that happen? But once she was done with her rebuttal, which seriously rivaled Jimmy Stewart¹s court speech in Mr. Smith Goes to Washington, I realized that she was right, that our society has demanded double gifts, and did so nice and slowly so I didn¹t notice I was being had.

Here’s her argument: You can’t go to someone’s house and stay the long weekend and not bring cute gifts. And you know darn well when we go back to the cousins at Christmas, we’re not going empty handed.

She had me. And I’m a pragmatist. Looking at her folded arms, her smug look of victory, her iron clad logic in pink fuzzy leg warmers as she pointed back to the computer screen, I knew this was my new reality. My next challenge was to find a way to bring it within some semblance of control–after I ordered the pink electronics, of course.

So here’s the deal: I love budgets and revenge. I called my sister, knowing full well that if my little lawyer was selling me on cousin gifts, the cousins were doing the same thing. And if I was going to impose serious restrictions on my daughter, it was important that it be the same on the other end, so they weren¹t being extravagant while we were being controlled. Nothing worse than looking like the family tightwad at a holiday gathering.

That said, if you can only get your immediate family to buy in, do it anyway.

We came up with this plan:

Have your teen make a Gift Chart that includes every kid in the extended family that you’re going to see between now and New Year’s. If you¹re not going to see them, but there are other family members, they get a homemade card and a homemade food gift.

Next, put on the chart how many times you’re going to see each kid. e.g. We’re going to see cousin Olivia at Christmas but not at Thanksgiving. So she will be budgeted for one gift. We’re going to see cousin Christopher at both, so he’s budgeted for two.

Tell your teen that this year you’re doing three categories of gifts: purchased ones, handmade ones, and handmade food ones. The food ones are automatic for anyone you¹re not actually seeing, and they are one of two gifts for anyone your family is going to see twice. Food is also going to be made for stocking stuffers.

Tell your teen they can choose two people to buy gifts for, and the rest will be homemade gifts. For the purchased gifts: Have your teen go online and price what he or she considers a good Christmas gift. This can be a category, such as: kid iPod.

Have them search on an item, and then look for the best deals–may as well add the comparison shopping challenge in there. Once you find the best price, that¹s the budget. And that is it. You put the cost ceiling for each kid that is getting a purchased gift. If you have a more than one kid, it is likely that the purchased gift would be for a sibling. (Another idea to bypass even this is to get one family gift for your entire household, like a DVD player.)

Once the budget is set for the purchased, it is immovable, even if your kid decides they want to get their sibling a Wii game or a karaoke machine instead of a kid iPod (which runs $20 - $40). The reason for this is key: This is how teens get you. They rely on being fickle. As the advertisers, who are smart, don¹t forget, when they up the ante for expensive gifts, your kids are first in line to buy in.

5. An addendum rule: My daughter can spend a fortune in the “wrapping paper” category: keychains for backpacks with cute stuffed animals on them, singing cards, pocket lip gloss—all the impulse purchase stuff at the checkout counter. Have kids make these novelty items with some pom-poms, googley eyes and glue, and some clip ons you get at the crafts store.

The crafts store. Now we¹re getting to the heart and soul of this Christmas and Thanksgiving and whatever else shopping season. Craft stores are amazing fun, and kids can come up with great ideas. Honestly, they¹ll remember how much they love making things.

You make two trips. The first one is for ideas: Bring the gift chart and have the kids decide what they want to make for each person. Then go back home and see what materials you already have. You may be surprised. For instance, if you¹re making handmade stuffed animals or dolls for younger kids, old clothing can be used for the material, yarn for hair or a horse¹s or lion’s mane, old pillows for stuffing.

And you know what makes beautiful wrapping paper? Brown paper grocery bags that are painted.

After you’ve exhausted what you can make with available materials, if you still have people on your list, make a list of ideas and the materials you still need.

Then go back to the craft store, or the hardware store, or the dollar store.

In fact, comparison shop all of these for the materials you need. Include online outlets for discount craft supplies.

Keep track of everything you spend this year, if you do decide to go the homemade route. And take stock: If you have a way to compare to last year’s spending, show the kids. They¹ll be amazed. And I¹d be surprised if they don’t like what they produce far better than what they¹ve bought in the past.

I’d love to hear about craft ideas as well. And not just for the holidays: Birthdays, anniversaries, baby showers…

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When I was at the high school yesterday for a Board meeting, I literally ran into one of the seniors when she plowed into my back, her nose in her cell phone, madly texting.

I should have known better than to think she was merely chatting with a friend, even though she was late for class. This senior is one of those enterprising ones, the sort who makes me remember my incredibly lazy high school days with embarrassment.

“Do you use an online travel agent?” she asked.

First of all, I can’t remember the last time I could afford to go anywhere. Second, what’s an online travel agent?

“I’ve used Expedia,” I said.

She wasn’t impressed. She was trying to comparison shop airline tickets to have her favorite aunt come for Thanksgiving, an aunt who said she couldn’t afford to fly across the country from California to New York this year.

“Even Travelocity is better than Expedia. We’re still more than 30 days out, best price so far is $267 if she leaves the Saturday before. I’ll ask for donations from every family member. Can’t be that much each. I have a big family.”

She ran off to Calculus and I stood there, thoroughly impressed by her planning skills and strategy. And, of course, it then occurred to me to turn this one-month-in-advance sweet spot in time into a money lesson for teens that aren’t so enterprising without a little nudge.

What all teens are good at is online comparison shopping, if you put it to them the correct way, as in: Pretend you’re buying something for yourself, and you desperately want it, but have a limited budget. They instantly become Google Jedis.

So, here’s the holiday money lesson to hand your teenagers this weekend, while there’s still 30 days before Thanksgiving. It may save you a bundle, while showing them how expensive holidays can be:

1. If your family is traveling somewhere, have them do a cost analysis of the trip, by creating a ledger of line item expenses. Before you tell them which line items to include, see what they come up with on their own. It’s interesting to see which expenses they’re aware of, and which ones don’t come across their radar.

Ultimately, the line items for travel should include Travel, Lodging, Daily Expenses.

First, will there be air travel for the family (or cost of car travel). Air travel means asking if there are frequent flier miles available for any or all of the family, and then seeing if they’re worth using, or if the flights are cheap enough that the miles should be saved for another time. It also means comparing flight routes and possible days of departure.

Car travel means calculating gas and parking costs. Maybe train travel is another option. Have them look into all transportation options.

Then they should include whether the family is staying at a relative’s house, or at a hotel. If a hotel, have them comparison shop hotel prices online. Also include rental car, parking, and gas costs if they apply.

2. If you are staying home this Thanksgiving, let your teens do the grocery shopping, and any other related expenses. If your family is entertaining this Thanksgiving, expenses add up quickly.

First of all, you buy a lot more food and possibly wine. If you host guests, there may be outings that are costly. Have your teen create a ledger of line item expenses for all these costs.

The ledger should include: Consulting about the size of the turkey (or whatever your traditions are) and then comparison shopping the best place to get what you’re looking for. Many people order turkeys now or pretty soon. Then: other food, comparison shopping the price of any wine or beer online or on the phone (naturally you can’t send them out to get these items). I include the liquor not to invite aghast emails, but because it’s a considerable expense that we end up paying. Then other expenses, such as an ice skating or movie outings for the extended family.

When it comes to activities, have the teens brainstorm what would be fun and at what cost.

If it’s possible, compare what costs your teens come up with to what you spent last year. Really go to some effort to look up last year because it will be very satisfying to the kids to know.

I’m curious if they save you money. My bet is they will, simply by creating awareness early and then planning. We’re all so busy we tend to shop last minute (I’m the absolute worst when it comes to that). Last minute shopping is always expensive. To have everything mapped out in advance is a great lesson in planning, too. Maybe it will spill over onto their schoolwork. Hey, I can dream, can’t I?

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Our teenagers should understand that by the time they’re teens, just starting up that hill to adulthood as we reach down from the top to give them a hand, their grandparents are starting their descent down. And we have to keep a watchful eye on their grandparents, our parents, so they don’t trip and fall on the way down the hill. Sometimes we have to run down, help them walk along, and then run back up to keep an eye on our teens’ ascent, all in the same moment.

As parents of teens, we are collectively the age where we must parent both our kids and our parents. This isn’t a new phenomenon, but boy does this economy make it tough, especially in a country as spread out as ours.

We live in a huge country, and it’s common that a family of origin is spread out: I live in New York, my mother lives in Washington, D.C., my brother in Los Angeles. Teens don’t learn about generational hand-me-downs like they do in other cultures, in smaller countries where grandparents, adult children, and kids are born and raised and still live in the same town.

By the way, there is a lot of intimacy lost in our spread out existence, as well as additional expenses for us adults with both teenagers to raise and parents to care for. (I was teasing my husband that in a pack of gorillas I think they call the adults with both elders and offspring to care for “mature males.” What do you know about that? Inevitable maturity for gorillas, but not necessarily for humans.)

Okay, so here’s a way to foster a connection between the young and old generation that may be lost in your family, especially if you don’t live near your parents and your teens only see grandma and grandpa on holidays.

Put your teens in charge of comparison shopping something in your parents lives: If they are local, it could be grocery shopping. Have your teen do the shopping. They have the energy to go to different stores for better prices, or even just carry cheaper bulk quantities of things they love, like seltzer or tonic water. Or, as we discovered in the Turn Trash into Cash post, there are so many things that can be purchased in bulk.

Your teen can also help organize bulk purchases for their grandparents,by cleaning out storage space in the garage, basement, or attic for bulk items, and bringing them out as needed.

The grocery shopping challenge for your teen also means they’ll see their grandparents at least once a week. What could be a better benefit than that? And helping their grandparents will feel so good to them.

Put the money they save on weekly grocery shopping–or any other comparison shopping ideas we’ll list here in a moment–into a 529 College Savings Account for your teen. Think of it as a living inheritance. That way, it’s not paying them to care for the grandparents, which has negative connotations. Having the grandparents contribute to a college fund in an indirect way will make everyone in the family feel good. And of course your parents are of the age and generation that will be proud to see their grandkids earning their college education.

Here are some other ideas for comparison shopping, some of which are easily done long distance. Do have your teen keep a monthly ledger of how much they’ve saved. It can be an online one that they even mail to their grandparents. Have them chart the expense, and then the reduction in expense, per month, for one year. If they enjoy the project, they don’t ever have to stop. It can be something they do for their grandparents from college, from 20something adulthood wherever they are.

Ideas that can be accomplished long distance, by having grandparents send the bills for these things. Teens can research better deals online, and by calling customer service departments.
1. Phone service, both landline and cell phone.
2. Car insurance.
3. Cable TV or satellite TV service.

One more idea for teens if grandparents are local: Have your teen go through their grandparents house and see what needs to be repaired or maintained. If the teen can do the repair him or herself–such as painting a room–then have them do that, for a small monetary reward that goes into the college fund. If it’s a repair that requires some kind of contractor, let your teen do the research, set up appointments, and choose a contractor for their grandparents.

Please share any experiences with teens taking care of grandparents in this way. And any thoughts from grandparents on how they feel about the experience would be more than welcome.

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I must say I’m liking these carbon footprint money lessons. You can jump right in without any preamble because teen awareness about the effects of consumption and wastefulness is already being raised at school, and among their peers. Because teens are so aware, monetizing conservation has a better chance of sticking with them than many other money lessons.

So let’s keep these ideas rolling like a trash can on wheels. If you have carbon footprint money lessons, games, or policies at your house, share them!

Trash and recycling. These are now your teen’s domain. Taking out the trash is a time honored job for teens, so it’s about time it had an upgrade. When I say teens can “take out” the trash, I mean get rid of as much trash production as possible.

The number one point of this trash challenge is for your household to stop producing so much trash per week. My husband is shrinking over there on the sofa as I write this. I honestly have no idea how one man can produce so much waste. When we started this challenge at my house, we had the carbon footprint of King Kong.

Explain to your teen–and it won’t be the first time they’ve heard it–that it’s not enough to put a plastic water bottle into the recycle bin. You have to stop buying and using so many plastic bottles. Go ahead and Google photos of landfills and recycling plants if you need the point to hit home.

What I love most about this conservation concept is what a perfect analogy it is for saving money. Spend less, have more. Simple. Learn to live within your means from day one, you’ll always have money. As my father used to say: If you don’t live within your means when you make $30,000, you won’t live within your means when you make $100,000.

So here’s the teen trash and recycle challenge:

1. Have them count how many trash bags are taken out of the house and into the outside trash bin for weekly collection. They need a beginning one-week measure of trash. Have them start a graph chart. Week 1, Week 2, Week 3, etc. across the top, and then # of trash bags running in a vertical column. Each week they find a point on their graph: How many bags of trash. This beginning measure is Week 1.

The graph chart is important here because they need to see progress, which direction they’e moving.

2. Week 2: At the beginning of Week 2, when they have that beginning measure in mind–say 4 bags of trash per week–have them write down three trash saving ideas for the family to do for Week 2.

(Do start the Week on the day of trash pickup so you’ve got an empty trash bin outside your house. Once you start reducing trash, it will be gratifying to see that bin less full.

Some examples of trash saving ideas: Don’t use sandwich bags in lunch boxes, use reusable containers. (Have you teens save their lunch trash, by the way, and bring it home, to show how much they’re really wasting. They’ll hate this idea at first, but just tell them to shove the trash in their backpacks. It’s part of the challenge, and there will be a monetary reward at the end of the challenge.) Instead of buying canned dog food, you can buy some meat and a big bag of the dry dog kibble and cook for the dog. Buying low grade ground beef in bulk amounts is cheaper anyway. Dog food costs add up and often the cans aren’t recyclable.

The great thing about trash conservation ideas is that they’re often money saving ideas. If you use tupperware for school lunches instead of going through hundreds of plastic baggies, you’ll spend less. It’s a also return on investment lesson. You buy the tupperware once at a certain price; say $4 for a container that holds a sandwich. Check the price of a box of sandwich baggies. By the time you have saved X number of sandwich baggies that equals $4, you’ve made the return on your investment. After that moment–if they haven’t lost the tupperware top at school or melted it in the dishwasher–the use of that tupperware is all profit.

3. For recycling, tell them to make another chart. Call it Trash 2, because they should still think of something they throw out, even if it’s reused in some way, as producing waste. This has the same Week 1, Week 2, etc. across the top of the chart, and # of recycled items running vertically. Of course they’ll need room on this chart for those numbers to go much higher. With trash bags, you probably won’t run more than 10 in your vertical column, but with the # of recycled items, who knows how high you’ll go.

Have them count the # of recycled items thrown out in Week 1, use that number as a baseline again. The challenge in Week 2 is to reduce the # of recycled items in the bin.

4. At the beginning of Week 2, have your teen think of two recycling reduction ideas for the family to follow. One easy example is plastic water bottles or soda cans. Get a reusable water bottle and fill it up. Buy large soda jugs instead of cans. Buy big tubs of yogurt instead of the individual serving size. In fact, if your teens aren’t aware of the bulk section at your grocery store, show it to them. Definitely bring your teen grocery shopping with the idea of researching trash reduction. Or if your grocery store doesn’t have a bulk section, go to one that does. You can buy so many things in bulk, and keep everything fresh–food items like nuts, cereal, rice, pasta–in airtight containers.

5. For every bag of trash they save per week, give teens a dollar amount to put into savings. Do the same for the # of recycled items they reduce per week (smaller amount of course, to make it relative).

I say savings here instead of spending money because it’s such a great metaphor for conservation, who can resist? Besides, let them see how savings add up when you save. It’s the corollary to witnessing how much less waste your family will produce. You could even start a carbon footprint savings account for your teen, and in a year, see how much money they’ve saved from this trash challenge, or the gas and electric challenge.

Keep up this challenge for as long as you can. After a certain point, there may be weeks, or months, that go by without much reduction. But to maintain focus on conservation, and always hold out the possibility for reward, will eventually inspire new ideas. And it’s so great for them to keep a long-term chart. It will only take them a minute each week.

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My students get very self righteous about the fact that our generation destroyed the planet for them. Hmm, I seem to recall that once upon a time I was young enough to blame my parents for the same thing.

Never mind that. I feel old enough today not to go there. The point is that I’m sick of hearing it and being the blame magnet, so, let them walk the talk.

Gas. Electric. I hope they like to mantra, because these are your teen’s new responsibility, their new best friend, their milieu for showing up us old wasteful folk. They’ll see it’s hard to be green, but you save money if you are. And you know they’ll teach us a thing or two. I can handle that, as long as they’re suffering, too.

Four steps to this money-saving utilities project:

1. Give your teen the gas and electric bill for the last year. They need a whole year because they need to see how different seasons affect consumption. For instance, in our house, the heat is gas, so winter is more expensive.

2. Have them divide usage by quarter, or season. Have them make a chart for how much money was spent on gas and how much on electric during the Fall, Winter, Spring, and Summer. I start with Fall only because it’s Fall now. You can start any time.

3. Then put them to the task of being the consumption police for this season. See if they can save money. They’ll remember to turn lights off, research new bulbs that run more efficiently, and turn down the heat if everyone is away at school and work during the day. If they save money, give them a prize, like the amount they saved, for their savings account, or investment account.

4. Also, ask them if they’ll take on another project. One suggestion: investigating what sort of changes can be made in the home that can be both green and save money–insulation, new bulbs, transforming heating systems. Ask them how long it would take to get a return on investment.

That’s a great concept for them to learn. Since they know how much utilities cost, they’re ready to apply this knowledge. Explain that when you buy something, like a new heating system, the length of time it takes for that new system to pay for itself is the return on investment, or ROI.

So, if a heating system costs $1,000 but saves $50 per month in heating bills, and you heat the house six months out of the year, how long until that system pays for itself? Don’t answer it for them! Also critical for them to factor in is how long the system is expected to last. If it’s less than the length of time it takes to pay for itself, that’s not a viable return on investment.

Next time we’ll set up a trash and recycle program and let them tackle that.

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I’m becoming one of those people. It’s not even Halloween and I’m already thinking about Christmas shopping. I used to be the person who lectured about how pre-marketing makes us spend more money, no matter how much we convince ourselves that planning ahead reduces stress and can save money because you have time to comparison shop.

But now I’m sitting here telling myself that nothing is on sale right before Christmas, but it is now as every retailer in America tries to boost pre winter earnings. Besides, it’s a tough year, and if I don’t start thinking about it now, I won’t be able to afford Christmas.

A-ha! And that’s where the thought crept in: I could create a family challenge game for the kids: Whoever saves the biggest percentage of their earnings for Christmas by December 15th wins. The percentage levels the playing field if you have kids of significantly different ages and revenue streams. An allowance-only 13 year old doesn’t stand a chance against a babysitting 17-year-old if they go dollar to dollar in a competition.

The prize is to have those savings matched. And your teens, or college students, get to keep the prize money. The savings they actually save goes to either buying presents for the family, or, depending on your family traditions, to a charity.

The game will teach them about the stock market and pacing themselves.

Now, here’s the interesting part of the game: Understanding what a fiscal quarter is. As you teach kids about the economy and investing, this concept needs to be clear. There is a lot of expectation in the real world for companies to produce on quarterly basis, and report on a quarterly basis. It helps people keep track, keeps people honest.

It’s a good habit to put fiscal quarter thinking into your kids’ lives. And this is a great quarter to do it. If you’ve been following our posts on investing in the stock market, you may know that the end of September (end of the 3rd quarter) and the beginning of October (start of the 4th quarter) are very important times in the stock market. After 3rd quarter earnings reports–what corporations have actually earned, versus what they predicted they’d earn–the stock market traditionally rises in October. Those reports are happening right now. Turn on the financial news and let your kids watch the stock market reaction.

The reason the 3rd quarter earnings are so significant is that economists begin to see what the entire year will look like. After all, there’s only one quarter left. Kids tend to think of the year in school year terms, and understanding how the calendar year is broken up will help them understand investing.

Now, they do have a natural, built-in basis for understanding fiscal quarters: seasons. Fall is the season for back-to-school, getting down to business. Same is true in the business world. So it should be a great time for savings.

To track their savings, and show them how to make most of the fiscal quarter, have them do the following three steps.

1. Keep a monthly ledger of income and expenses and savings).

2. Have them evaluate how much they’ve saved at the end of October, and come up with ideas how to save more. Another odd job? Less spending?

3. At the end of November, have them compare their saving performance from month one to month two. Then have them set an accelerated goal for the last two weeks.

4. Have them compare their last two weeks to the rest of their fiscal quarter. Did they save more at the end than at any other time? Chances are yes, and you can explain that businesses tend to have the same patterns toward the end of a quarter, often because they’ve spent their budgets. Or, because they want to make their numbers look good.

The point of this exercise is like the point of sports team drills: how pacing yourself, and then examining performance, can actually enhance performance. Fiscal quarter thinking can translate to a lot of life issues.

They can play this game with school work, for instance. If they take their worst subject, say math, and decide they’re going to make an effort to improve their performance in one fiscal quarter, what would they do? Spend an extra hour a week working on it? Getting a tutor? Joining a study group? Going to teachers’ office hours?

They can try something for the first month, see if the grades they’re getting improve. The next month, they can add more effort, see what the yield is. Like long distance running, at first it’s pacing, and by the end it’s pulling out all the stops and going for whatever your goal is.

Most teens procrastinate and then cram. That would be like doing nothing to boost earnings–or savings–until December 1, and then gunning for the last two weeks.

That’s what I did in school, and many adults have those habits. If kids think like businesses have to, they will plan their time better for everything in their lives.

I would love to hear back in December if anyone tries this Q4 Savings Plan.

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