Dear Girlfriends,

We are in the midst of the largest transfer of wealth in our nation's history. The "greatest generation" is dying away and being the good savers/investors they were, they're leaving trillions of dollars to their baby boomer heirs. So that leaves me really scratching my head...if they were such great savers, why didn't they pass this legacy on to their children? And if we didn't learn how to step up to the plate and take charge of our own financial security - how will our own kids learn?

I worry about them. Did you know that by the time a girl is seventeen, she'll have been communicated to by a quarter of a million advertisements (specifically directed at her to improve her appearance)? According to Common Sense Media 2003 Research, this is a fact. Fact number two: kids today have unprecedented access to cash. In 2002, Teenage Research Unlimited reported that on average, teens spent $101 a week. OH.MY.GOODNESS. That's 5,252 bucks a year!

So my question is: How do we leave a legacy of good financial stewardship to our children? How do we impart powerful and liberating lessons in money management and fiscal responsibility to them as they grow?

Well, I don't think we wait until they're 30 to start the conversation. If you're into using "teachable moments" with your kiddos, here are a few of our tips and those we've learned from other parents along the way:

BEGIN AT AGE 2:
Introduce the concept of delayed gratification. Prepare yourself now that they will drive you silly, but don't give in. Start this when they're old enough to sit in the shopping cart and I don't care HOW LOUD they scream at Target - just smile sweetly at the mother standing in line behind you and share with her that your child is embracing the concept of delayed gratification.

BEGIN AT AGE 3:
Introduce the concept of giving. Hoarding money is as unhealthy as refusing to take financial responsibility for yourself, so instill the habit of giving. The average 3-year-old will clearly understand the concept of sacrificing a toy for him- or herself in order to buy one for another child in need; as a matter of fact, you'll probably make note of how much they seem to enjoy the act of sacrificial giving . Get them in the habit now of giving of their first earnings in the form of a tithe or offering at weekly services. If your family doesn't attend services, seek out the local SPCA or other organization or causes your family supports. But explain to them what the gift goes toward and why the organization depends on them to help financially.

BEGIN AT AGE 4:
Introduce the concept of pay yourself first. Encourage your child to pay themselves 10-20% of their allowance or earnings before shopping. Children as young as 4 should have three piggy banks - one for their spending, one for their saving and one for their charitable giving. As they get older, eliminate the physical saving bank and help them open a passbook savings account. Now is the time to get them in the routine of stopping by the savings piggy bank before heading to the toy aisle - it will make the drive-thru at the bank second-nature by the time they're 15.

BEGIN AT AGE 7:
Introduce the concept of the 401(k). For every dollar your child saves, match it dollar for dollar. This concept can be grasped by the average 7-year-old as all they need to understand is simple arithmetic but let me tell you - by the time they're teenagers (and eyeing a car or electronic equipment), they will totally embrace this plan! And, there will be no question about how a 401(k) works when they're 25.

ALSO BEGIN AT AGE 7:
Don't introduce credit. See concept introduction, age 2. If you are teaching delayed gratification, you will not be tempted to allow them to "pay you back later". This is a bad habit to start and only introduces the concept of the credit card. Plus, later seems to never arrive.

BEGIN AT AGE 16 or 17:
Introduce the concept of balancing a checkbook. Do this while your teenager is still at home because let me tell you from experience, this can be a nightmare if you're trying to do it long distance after they've headed off to college. Better yet, introduce them to Quicken TM so they can actually see where their money goes in the form of pie charts! Eye opening.

BEGIN AT AGE 18:
Introduce the concept of eating beans. Before they leave for college, explain they will be given a set living allowance and don't make extra little deposits when they run low. WHO'S GOING TO DO THIS WHEN THEY'RE GROWN? THEIR EMPLOYER? HA! One of our favorite college stories about our daughter, Shauna, was when she called home complaining she was running low on money. After a little interrogation by her father, it was determined that she had bought a few items that weren't exactly necessities. How did she make it through the month? Refried beans and tortillas. She was most proud of herself for making it to the end of the month and for developing a meal plan that cost just 28 cents each. (And I was proud of myself for not breaking down and sending more money.)

WHEN THEY'RE ENGAGED:
Introduce the concept of making choices and sacrifices, and managing money as a couple. Let the nearly-weds manage their own wedding budget. Set up a checking account and make ONE deposit based on what you're willing to spend on the wedding. Whatever they spend over the budget, they have to come up with; whatever they save, they get to keep. No time like the present to see how they manage money together. (And a positive side-effect: never a cross word between the bride-elect and her parents. The decisions and negotiations are all up to the nearly-weds.)

WHEN THEY'RE MARRIED:
Offer your experience and counsel. Young married couples are often confused by all things money related - from 401(k)s to buying their first home. Don't insert yourself where you're not appreciated, but offer to share your advice if and when they're interested in learning more. My bet: they'll be interested. Do you think they want to be poor?

Step four in securing your freedom to choose: liberate yourself today from caring financially for your grown children, tomorrow.

Train up a child in the way he should go, even when he is old he will not depart from it. Proverbs 22:6

Leaving more advice than cash,
Ellen

Posted by Ellen on February 27, 2007 11:46 AM  |  Category: Work/Life Balance and the Debit Card

Dear Girlfriends,

I can tell you right now that you're not going to like this topic. Why? Because it's about saving money, not spending it. And that's hard for many of us (me included) when there are so many cute shoes and handbags calling our name! But if we want to be women who live a life of balance and are secure about our future, we have to dive into this icky topic. Please don't turn the page. This is really important.

I hosted a Think Tank of twenty-something women last summer to learn more about the things that challenge and concern young women most when it comes to balance. The number-one question from this college-educated, articulate, already successful group of women was: How do we get smarter about money? How do we save more? They intuitively knew their finances were tightly coupled with their sense of balance, but they also knew that something was amiss.

After their exchange of financial frustrations, they came to the unanimous conclusion that they felt peer pressure to spend too much money on things like evenings out, and nine out of ten admitted they hadn't a firm grasp of the concept of delayed gratification. How could they? They were raised by parents like me who wanted our children to never go without; in addition, they live in a society where there is so much stuff competing for their hard-earned dollar. When I was their age - we didn't have a Starbucks or Ann Taylor Loft on every corner!

After the evening ended it dawned on me that what these gals really need is a goal. A tangible financial destination so they can measure their success along the way - or improve their disciplines in order to achieve their desired result.

So let's see how this might work.

Let's say that you're 30 years old, earning $55k per year, and your goal is to amass $1 million by the time you're 65. In order to do this, you'll need to save about $467 per month. Wow! That seems like a lot of money when you're probably not at the top of your earning game. But we all know there are probably a few things we really can do without:

Eliminate 2 fuzzy-icy-coffee drinks $7.00
Pass on 1 salty-icy-tequlia drink $7.00
Skip that new blouse $32.00
Cook Sat. night dinner rather
than dine out $45.00
Wear last year's necklace $16.77
Total weekly savings $107.77 per week X 52 weeks per year = $5,604.04

$5,604.04 saved each year (about 10% of your salary) and invested over 35 years, with a compounding interest of 8% will net you a smidge over a million bucks. Is this too aggressive for you? Start with saving $53.54 per week; at the same compounded interest and term, you'll net $500,000 . . . that's 50 times more than 58% of female baby boomers have saved today.

I often hear women say that they deserve that new blouse. Really? I think what you deserve is something that will last long after that blouse has gone out of style. What you deserve is peace of mind. Consider the greater sacrifice: not going shopping on Saturday or living large for the last 30 years of your life.

"When we detach emotions and money, we can take the steps we need to in order to avoid feeling helpless. According to the National Center for Women and Retirement, of those women who say they feel in control of their lives, 56 percent of them saved and invested monthly. Of the 42 percent who said they felt out of control, only 17 percent made savings and investing for retirement a priority. There's a direct correlation between how well a woman takes care of herself financially and how good she feels about herself." Liz Perle, Money, A Memoir: Women, Emotions and Cash

Divide your portion to seven, or even eight, for you do not know what misfortune may occur on the earth. Proverbs 11:2

Step three in securing your freedom to choose: develop a goal and a savings plan; then stick to it. You deserve it (and the smaller jean size that accompanies kicking the high-cal drinks is a bonus).

Spending purposefully,
Ellen

Posted by Ellen on February 20, 2007 11:41 AM  |  Category: Work/Life Balance and the Debit Card

Dear Girlfriends,

Last month Steve, our grown kids, and I and drove down to Austin for the weekend. We ventured out of town on a winding ranch road and got lost. Our car has a navigation system, but it was preprogrammed to indicate on the display our final destination. Well, that didn't help. I knew where home was! I wanted to know WHERE AM I RIGHT NOW AND HOW IN THE DEVIL DO I GET ON THE RIGHT ROAD TO TAKE ME TO THE INTERSTATE? It took several minutes to figure out what was wrong and re-program our preferences, and while that was all happening, we were driving further away from I-35 . . . not closer!

Just like you need a map to determine where you are in conjunction with where you're going, you need a financial plan to do the same. You need to know where you sit at this moment in time (your financial assessment) in contrast to where you want to wind up (your desired financial state for retirement). For younger adults, you will also want to know where your road stops are; things like a home purchase, having children, and saving for their college education. But here's the kicker: you can't drive around for days, months or years without knowing where you are or you could be headed in the wrong direction - further from your financial destination.

Steve and I finally stopped "driving around in circles" last year. Why did we wait so long? No one told us that this is a critical step to helping us secure our final financial goal. Yes, it seems obvious to us now, but it didn't two years ago. Learning more about the process, I asked our personal Merrill Lynch financial advisor, Carol Meyer, why people (like us) procrastinate in having a financial assessment done. She said, "Many people are afraid of what they're going to find out. So they just put it off." WHAT? Well, that's just plain crazy! That's like not going to get your mammogram because you could get bad results. Wouldn't you rather know what steps you can take now to ensure your long-term health and quality of life? Well, of course. That's the only sane approach. Same with your finances.

"When I asked women about their top five nightmares, winding up a bag lady featured in almost all their scenarios, right along with not having enough money to retire safely. Yet when I asked those same women how much time they spent focused on investing for their retirements, almost all of them said either that they didn't have any money to invest or that they left the management of what they had to husbands or professionals. Here's something that keeps us up at night, that we spend most of our days trying to procure, that we don't care about for its own sake, and about which we either lie with regularity or are completely silent." Liz Perle, Money, A Memoir: Women, Emotions and Cash

Step one in securing your freedom to choose: Assess where you are today to determine how to best reach your final destination.

Re-programming my navigation,
Ellen

Posted by Ellen on February 13, 2007 11:30 AM  |  Category: Work/Life Balance and the Debit Card

Dear Girlfriends,

For those of you who might be disinterested (as I once was) in the topic of money and think it doesn't apply to you or your sense of balance, let me share with you a few stats:

• It was predicted that in 2003, more women would file for bankruptcy than would graduate from college.*
• In 2003, it was also predicted that over the next 7 years, more children would live through their parents' bankruptcy than their parents' divorce.*
• In 1981 about 69,000 women filed for bankruptcy protection; that number soared to nearly 500,000 in 1999 - a 662% leap in only 18 years.*
• The average age of widowhood in the U.S. in 1994 was 56 years old.**
• Only 5 percent (1 in 20) of us will have annual incomes of $25,000 a year at age 65.***
• During the last 10 years, mid-life divorce has tripled.****
• One year after divorce, the average mid-life woman remains single, with an average income of $11,300.****
• Over 58% of female baby boomers have less than $10,000 saved in a pension plan or 401(k).****

*The Two Income Trap, Warren and Tyagai
** Waddell and Reed
***Smart Women Finish Rich, David Bach
****Statistics and Aging Information - The Senior Source

Girlfriends, just like hormone replacement therapy is a women's issue - so is money. And just like we educate and take responsibility for our physical health, so we must also educate and take responsibility for our financial well-being. It is a copout to delegate the arduous role of managing our money to spouses; male or female, you both need to know what is being managed and how, because there is an excellent chance that one of you will be left alone to manage your affairs at some point in your future.

"Many people live their lives going nowhere and doing nothing, not because they like where they are but simply because they are afraid of change. Overcoming this fear takes real motivation. It has to hurt so much that finally you can't take it anymore and you say, 'Enough is enough! I want my life to be different.'" David Bach, Smart Women Finish Rich

Finding and maintaining balance doesn't happen by accident. It is a purposeful, well-planned mission, and one in which finances often plays a pivotal role. Living your vision means having the financial stability to do it. Having a solid financial footing indicates that somewhere in life you had a plan and you executed that plan - allowing you the freedom to make choices.

His master said to him 'Well done, good and faithful slave; you were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.' Matthew 25:23

Hoping you're no longer disinterested,
Ellen

Posted by Ellen on February 6, 2007 11:24 AM  |  Category: Work/Life Balance and the Debit Card

Dear Girlfriends,

"I'd never made as much money before in my life, but I'd never traded more of myself for it." Liz Perle, Money, A Memoir: Women, Emotions and Cash

Girlfriends, I can really relate to this statement. I realized at the height of my career that I had a disconnect. I was a walking, talking contradiction of my values when it came to money. I wanted more time with my family; I needed less stress for my health; I desired a more fulfilling career; but I wrestled for months with the idea that I made too much money to quit. Finally, my value system prevailed.

We believe in our values, but they're often not supported by the way we handle our money. Women who wouldn't dream of stealing a pencil at the office will sneak $20s from their husbands' wallets or will "disguise" new purchases in the closet. H-E-L-L-O?? Does this seem healthy to anyone out there?

We work in jobs we hate to buy stuff that fills us emotionally for only days (and sometimes hours). We purchase things to fill that hole in our soul only to be awakened at 4:00 a.m. ridden with guilt about our extravagance. Something's gotta give. At some point we must all make an honest assessment and compare what we really value with how we really live.

He who loves money will not be satisfied with money,
nor he who loves abundance with its income.
This too is vanity.
Ecclesiastes 5:10

Step two in securing your freedom to choose: walk your talk.

Easier said than done,
Ellen

Posted by Ellen on March 13, 2007 12:00 PM  |  Category: Work/Life Balance and the Debit Card

Dear Girlfriends,

Most women are surprised to learn that even though I run my own businesses, I haven't paid a bill in over nine years. This situation leaves me in a precarious position. If something happened to Steve - my CFO for all three companies and the Miller household - not only would I be devastated personally, I would be paralyzed financially. So feeling this vulnerability recently, we scheduled a family meeting for a little tutorial.

I admit I was totally lost when he opened Quicken TM. But after a few minutes, I was pretty confident that I could do this, again. Of course, managing the finances and dealing with payroll for the companies is a bit more complex, but at least I know I could cobble things together in case of an emergency. Could you? Or, could he?

In many families, one spouse or the other takes care of managing the family budget. But it is the one who has forfeited this task that suffers greatly in a crisis. Talk about compounding a problem! If something happened to one of you - don't you agree that managing the budget and locating your investments should be the LAST thing that surfaces as a worry or a challenge?

I'm not a detail person. To me, balancing the checkbook and paying bills is like watching paint dry. I don't plan on taking over this duty (much to Steve's relief), but I'm comforted to know I can if I ever have to.

Could you use a refresher course? What about your mom or dad? Could they benefit from a quick walk through of their investments, statements, and commitments?

Step five in securing your freedom to choose: Liberate yourself from ever saying, "I don't know how. He took care of the money."

Re-learning the basics,
Ellen

Posted by Ellen on March 6, 2007 11:55 AM  |  Category: Work/Life Balance and the Debit Card