Unemployment is Closing the Bank of Mom and Dad

This article, Bank of Mom and Dad Shuts Amid White-Collar Struggle, explains that unemployment is affecting the upper-middle class as well:

Indeed, the bank of Mom and Dad is closing at a time when young people are having trouble borrowing from traditional lenders. Some 22% of young people between the ages of 18 and 34 said they've been turned down for a mortgage, loan or credit card in the past year, according to a February survey from FindLaw.com, a legal marketing and information site. That's double the percentage of any other age group in its survey.

As a result, many young people are now moving home to save on rent. About 21% of young adults say they've either moved in with a friend or relative, or had a friend or relative move in with them because of the economy, according to a study from the Pew Research Center.

...Many parents who were set to retire are now delaying it to compensate for battered retirement accounts, leaving even fewer openings for younger workers to fill. There are an additional 500,000 workers over the age of 65 in the work force now compared with 2007.

In short, unemployment is forcing parents to cut their kids off and push back their own retirement.  Those kids are having to cut expenses to get by without parental financial support.  Although this seems like an obvious result, it is worth repeating as a reminder. 

As I've said before, if you are planning to help your kids, please make sure to cover your own bases first.  I feel much sorrier for the parents that are pushing back their retirement than the young adults being turned down for mortgages and credit cards.

What do you think?  Should retirement be a higher priority than aiding your kids in college?  Are you having similar problems right now...am I misjudging the situation?

Helpful Financial Lessons for Children

I was inspired by this article to give a proper shout out to my parents. Thank you Mom and Dad for everything you taught me from as far back as I can remember. You are the reason I love personal finance and have never had to deal with high interest debt.

Okay, no more mushy stuff, I promise. The article above has a great 15 item list, but I really honed in on these points:

• Only spend what you earn.
• Only allow yourself to spend 50% of that.
• Guide and advise but don’t dictate your kids’ spending.
• At some point, cut your kids off.

I’d also like to add these specific suggestions since they either helped me or people I know:

• Help your kids open a banking account…having my own account spurred me to save.
• Teach your kids how to balance a checkbook and what those numbers mean.
• Have fun going over compound interest…I loved learning what my money could do.
• Explain debt’s consequences…this works best if they already know about compound interest.
• Introduce investment ideas…my mom went over CDs with me when I was 10. They help teach patience too.
• Quickly highlight what credit scores are and what they’re good for.

I know my parents taught me way more than what’s listed above, but I honestly don’t think there’s enough memory space for all of it. What big points did I miss? Do you disagree with any of the points above?

Fit in a Fun Friday - Sea Monkeys

If the title didn’t make you smile, you’ve never had Sea Monkeys. They bring up so many fun memories from my childhood that I thought I’d remind you too.

For those of you that haven’t heard of Sea Monkeys, they are miniature Brine Shrimp that are suspended in their hatching process until they are introduced into the correct environment. In this case, that environment is a little plastic aquarium that has the correct packets added to it a few days in advance.

Honestly, the waiting is the hardest part. Even after you successfully wait to add the “Instant Life Eggs”, you then have to wait until the little guys hatch and become visible under the magnifying bubbles on the side of the tank. I don’t know how many times my mother reminded me to have some patience.

I know that tiny shrimp may not sound like fun, but the whole process makes me giddy. It’s fun to create a tiny world. It’s also interesting to watch them stutter around the tank. I can’t swear I learned anything deep from the whole process, but I really do have fond memories of my first real pets. Yes, we had a dog and a hamster, but Sea Moneys were the first animals I actually took care of myself.

They are also affordable…the whole setup can be bought for less than $10 at Amazon right now. I might be buying the little set of magical packets pretty soon again as well. I think they might make fun office pets.

Have you ever had Sea Monkeys? Did they make you smile too?

Do Your Kids Receive an Allowance?

I have slowly come to the realization that many of my readers have kids *gasp*. :-)

In order to include more aspects of financial life, I hope to start including a few more blogs on children.  Feel free to send me ideas to look into or guest posts if you feel like exposing yourself (sorry, couldn't help myself).

I remember a few failed attempts by my parents to pay me an allowance for doing certain chores. Yes, these attempts failed miserably since I hate chores and have indeed hired a housekeeper now that I’m all grown-up. :-) I made my money through Christmas, birthdays, and babysitting and hoarded it like a squirrel until I bought a tenor sax for middle school band for $525…then I started from scratch again.

BUT, my little sister was able to pull off an allowance of $10 a week regularly from age 10 and into her early teens. She was almost as much of a tight-wad as I was, but I do know she bought a few books and some candy now and again since we usually we shared our hidden stashes for variety. I still have my hollowed out candy book.

Do your kids get an allowance? If so, what do your kids buy? Also, do you have a family system like Trent over at The Simple Dollar?  Are they required to save a certain amount?