McKee Financial

McKee's Weekly Newsletter 11-9-2020

How to Teach Teenagers About Money

 

When it comes to raising kids, most parents either look forward to the teen years . . . or dread them. But no matter which side of the spectrum you’re on, the end goal is still the same: help them become successful contributors to society. But what does that even mean? 

It means showing them the ropes when it comes to adulthood, things like getting up on time, taking a regular shower, and learning how to make a budget. Now’s the time to start teaching teens about money—how to earn it, save it and spend it wisely.

Personal Finance for Teens

Think of your teen as an adult in training. It’s your job (as the adult of the house) to teach your teen what they need to know for that moment you send them off to college, trade school or even their own apartment. But you don’t have to be a finance professor to teach your teen how to save money. You can show them by example. Remember: More is caught then taught. You’ll want to show them how to earn money, create a budget, give, save and spend wisely.

Earning Money

If you’re like most parents, you’ve probably been eagerly waiting for the day your kid is old enough to start helping around the house. You may have started out asking them to help you wash the dishes, sweep the floor, or feed the dog. But now that you’ve got a teenager in your house, you’re probably off-loading the big-item chores like mowing the lawn or taking out the trash (woo-hoo!).

 

Instead of giving them an allowance just for breathing, you might want to think about giving them a commission. Not only will this strip them of any entitlement, but it’ll also help them see the relationship between hard work and money earned. When they do their chores, they’ll earn a commission. And when they don’t, they’ll realize they’ve made what they earned—nothing.

Is your teen old enough for a real-life job? Even better. Working for someone else, earning a paycheck, and seeing Uncle Sam take a chunk of their hard-earned dollars will help teach your teen about money—quickly. And if they’re a self-starter, you might show them how to start their own small business with the Teen Entrepreneur Toolbox.

Setting Up Bank Accounts

Just like losing a tooth or learning to drive, setting up your teenager’s first bank account is a rite of passage. By now, they’ve probably earned some money and have outgrown that piggy bank they got for their first birthday. You know what that means—it’s time for a real bank account. You probably don’t want to connect it to your own in case they overdraft their account or their identity gets stolen. But you will want to be the signer on the account so you can see their spending behavior. Remember: This is a great opportunity to teach them how to reconcile their account, keep track of spending, and learn to save.

Giving

You simply can’t go wrong with giving, because that’s what God’s called us to do, right? Something changes in your spirit when you become a giver. You focus less on yourself and see the needs of others more. One of the best things you can do for your kids is teach them to appreciate and understand the power of giving before they go out on their own. Plus—it’s the most fun you can have with money.

When you show your teens the concept of giving at an early age, they’ll remember how good it felt and (hopefully) continue the pattern as they handle their own finances.  

Saving and Spending

Teenagers saving money. You’re probably thinking those three words don’t even belong together. But if you want your teenager to grow up into an independent, responsible human, you’ll have to show them how. It starts with not giving them money for every bout of want-itis they go through. Teaching them how to spend money is also important. Just because they have money doesn’t mean they need to burn a hole through their pocket.

Teach them about having long-term savings goals. At this age, all they can probably talk about is getting a car. If they want one, they can pay for it. Work with them on creating a plan for their money: what they need to buy a car and what they need to save. Early exposure to goal setting helps to give them patience and vision, two things they’ll need in life.

How to Teach Budgeting to Teenagers

Sounds intimidating, right? We get it—but it doesn’t have to be! Incorporating some family budget meetings will help you show your teen how to make a regular budget each month before the next month begins.

Here’s the good news: It doesn’t have to be complicated. Have your teen do a zero-based budget. Show them how to list all of their expenses, setting aside money to give, save and spend—like we mentioned earlier. Once they’ve assigned every dollar a place and their budget equals zero, they’re done!

The key here is repetition. Make this a family rhythm and sit down with your teen to show them how to do a budget for a few months. Once they get the hang of it, your check-ins won’t be as time-consuming. Not only that but we’re guessing you’ll be amazed at how well they do.

Things Teens Waste Money On

Although musical tastes and fashion trends have changed over the years, teens’ spending habits haven’t. Just like we did, they still waste their money on whatever sounds good in the moment—like a 10-pack of tacos or that new Ariana Grande album.

These days, Gen Z teens are spending about $2,600 each year.1 Yikes. While it’s perfectly fine for young people to have fun with their money, teens are old enough to stop blowing every last dime on “stuff.” So, what are they spending their money on?

Here are 10 typical ways American teens waste money:

1. Fast Food and Fancy Coffee

No surprise here: Most teens are eating . . . constantly. In fact, food is the first thing teen boys spend their money on (and second for the ladies).2 They don’t bat an eye at paying $6 for a venti extra hot caramel macchiato, $10 for a spicy chicken sandwich meal or $2 for chips from the vending machine. If your teen is buying Chick-fil-A every day, they’re likely eating through a wad of cash.

2. Trendy Clothes, Shoes and Cosmetics

While it’s normal for young people to take pride in their style, remind them that those super cool outfits will go out of style in exactly five minutes (if they don’t fall apart first).

3. Smartphones and Apps

What would life be like without texting, Instagram and Facebook? Expensive smartphones are a status symbol these days. So are the cool apps that go along with them. News flash: Last year’s model makes calls just as well as this year’s—for much less.

4. School Dances

Getting ready for the big dance can be expensive. After renting a tux or buying a dress, getting a limo, and going out to dinner, school dances—ahem, prom—can really add up. Listen: Glittery shoes and limo rides aren’t worth that mound of debt . . . especially when college tuition is right around the corner. 

5. Spring Break Trips

Even if you trust your teen in Mexico, is it a wise use of money? And how much are you, the parent, expected to chip in? Encourage your teen to use their vacation time to work a few extra hours and save up for a more lasting experience—like, say, a semester of college.

6. Cars and Accessories

Your brand-new teenage driver doesn’t need a brand-new car. So, unless you plan on passing down your wood-paneled station wagon, they’ll need to save up and shop around for a reliable make and model in their price range. With the leftover cash, they can upgrade their ride with shiny rims and leopard print seat covers.

7. Video Games and Consoles

It seems like new gaming consoles come out every time you turn around. And teens need the latest versions to compete with all of their friends (the only two who also have the system). Let’s not forget all the awesome games they’re paying for too—at $60 a pop! Have mercy.

8. Concert Tickets

Teens identify with music. It’s only natural that they’ll want to see their favorite bands live. But concert tickets can add up fast. So encourage your metalhead or indie chick to pick a few priority concerts and not blow all their money on mosh pits.

9. Expensive Dates

Whatever happened to just hanging out? Now it’s a $30 trip to the movies, followed by a $35 sit-down dinner for two, then $15 gourmet frozen yogurts. Oh, and there’s the gas money to get around town. Multiply that by a few weekends a month, and your son or daughter just went broke for someone they probably won’t be dating in two years (or two months).

10. One-Click Online Spending

Thanks to Amazon and iTunes, teens hardly know a world without one-click buying. It’s okay to order stuff online—sometimes it’s even cheaper—but the downside is that kids don’t feel the pain of using cash. Don’t let them click their way into an overdraft fee.

The teenage years are great practice for the adult years to come. So encourage your kids to budget responsibly while they still have some space to mess up.

Money Management for Teens

Like we mentioned earlier, more is caught then taught. So, while you’re teaching your teen about money, you’ll also be showing them by how you handle your family’s finances day to day.

One of the best things you could do is help them prepare for their future. Do they want to get their own place? Do they want to go to college? Help them start thinking about these things early on with the 7 Baby Steps.

These steps will help them prepare for emergencies, save for college, and even get a head start on investing. They may not understand it now, but don’t worry. They’ll thank you later—especially when they graduate with a debt-free degree.

If you want to learn more about teenagers saving money or how to teach your teen about money, check out the Foundations Self-Study Bundle. It’ll equip your middle or high school teen with the basics of budgeting, saving, investing and making smart choices with their money.

Source: https://www.daveramsey.com/blog/teach-teenagers-about-money

 

Interesting Economic Facts

A MUCH SLOWER SPEED - The “velocity of money” in the United States was 1.104 in the 2nd quarter 2020, the lowest ever recorded in our country. The highest “velocity of money” level in US history was 2.198 in the 3rd quarter 1997. “Velocity of money” measures the rate that money is exchanged in our economy for goods and services. The rate has largely fallen for the last 14 years as more Americans have paid off debt or accumulated cash instead of spending money (source: Federal Reserve Bank of St. Louis)

DOWN, BUT GETTING BETTER - From a February 2020 peak of 158.8 million jobs nationwide, the United States is down 9.0 million jobs to 149.8 million workers as of the end of October 2020 (source: Department of Labor).

NO TO DOCTORS - Total health care spending in the USA in 2020 is forecasted to be 3.3% to as much as 8.8% less than what had been projected for 2020 before the pandemic began (source: Willis Towers Watson).

WE WERE IN A WAR THEN - The US budget deficit for fiscal year 2020, i.e., the 12 months ending 9/30/20, was $3.1 trillion or 15.2% of the size of the US economy. That’s the largest “debt-to-GDP” ratio since the measurement reached 21.0% in 1945 or 75 years ago (source: Office of Management and Budget).

BETTER THAN EUROPE - The International Monetary Fund forecasted on 10/13/20 that the 39 “advanced economies” in the world (out of 195 countries worldwide) would contract by 5.8% during 2020. The United States is projected to contract by 4.3% while the 19 economies in the Eurozone will shrink by 8.3% (source: IMF).

TAXES - To take deductions on Form 1040, a taxpayer can use the “standard deduction” or the taxpayer can “itemize deductions” if the latter is greater than the former. The “standard deduction” will be $25,100 for married couples filing jointly and $12,550 for individuals in 2021. Please consult a tax expert for details (source: IRS).

 

...and for the History Lovers... This Week in History

 

November 9, 1965

Nine Northeastern states and parts of Canada go dark in the worst power failure in history, when a switch at a station near Niagara Falls fails.

 

November 10, 1775

The United States Marine Corps is founded at Tun Tavern in Philadelphia, PA.

 

November 11, 1909

Construction begins on the naval base at Pearl Harbor in Hawaii.

 

November 12, 1990

Sir Timothy John "Tim" Berners-Lee, a British computer scientist, publishes a formal proposal for the creation of the World Wide Web.

 

November 13, 1982

The Vietnam Veterans Memorial dedicated in Washington, DC.

 

November 14, 1908

Albert Einstein presents his quantum theory of light.

 

November 15, 1775

The Articles of Confederation, instituting perpetual union of the United States of America, are adopted by Congress.

 

Notable Dates in October

 

“Just for Fun” Dates in November

November is Banana Pudding Lovers Month—who knew? Here are some more wacky celebrations to look forward to:

  • Nov. 1: National Cook for Your Pets Day

  • Nov. 3: Zero-Tasking Day

  • Nov. 9: National Scrapple Day

  • Nov. 16: National Button Day

  • Nov. 21: World Hello Day

  • Nov. 23: Fibonacci Day

 

Source: https://www.almanac.com/content/november-holidays-fun-facts-folklore

What Thanksgiving dinner looks like in 16 regions across the country

 

When you picture traditional Thanksgiving foods, you probably think of turkey, mashed potatoes, gravy, and yams. But since America is a melting pot, it only makes sense that multicultural traditions have made their way onto the Thanksgiving table in different regions around the United States. 

Insider has rounded up 16 of the most popular regional Thanksgiving foods around the country, some of which you may have never heard of. From purple yams in Hawaii to hasty pudding in New England, we're drooling over some of these culinary traditions that we may want to add to our own Turkey Day tables.  

Texas: Fried turkey

Frying turkey is a notoriously dangerous activity, and according to State Farm, Texas is the worst offender of turkey-frying accidents. Nonetheless, fried turkey is a delicious Southern delicacy. 

Learn how to do it (safely) here. 

What else would you find on this Thanksgiving table?

Turkey tamales — a true Tex Mex holiday dish — are a staple in many Texan Thanksgivings, as well as cornbread dressing. 

New England: Hasty pudding

Hasty pudding — also known by its politically incorrect name, Indian pudding — is a deliciously simple dessert made with cornmeal, molasses, brown sugar, and spices. It's usually topped with a dollop of whipped cream or scoop of ice cream.

Learn how to make this tasty dessert here.

What else would you find on this Thanksgiving table?

In New England, stuffing is often made with clams or oysters instead of just breadcrumbs. You might also find a side dish of creamed onions made with pearl onions and heavy cream. 

Maryland: Sauerkraut

It isn't Thanksgiving in Baltimore without some sauerkraut on the table. What may seem odd to outsiders is an essential side dish for the large German-American population of Maryland. 

Try this sauerkraut and apples recipe for a harvest time twist on the classic dish.

What else would you find on this Thanksgiving table?

Of course, you'll find crab cakes on the Thanksgiving table in Maryland. Corn on the cob is also a popular side dish in this region of the country since corn is such an abundant vegetable in Maryland.  

New York and New Jersey: Manicotti

The Italian-American Thanksgiving is perhaps the most gluttonous of all, and New Jersey and parts of New York just happen to have large populations of Italian Americans. Before the turkey is served, nonna will dole out servings of manicotti (ricotta-stuffed crepe pasta topped with marinara sauce). 

What else would you find on this Thanksgiving table?

Pasta is usually served as a pre-cursor to turkey in Italian-American Thanksgiving traditions, but it doesn't have to be manicotti: lasagna and baked ziti with meatballs are known to grace the table as well. The Italian host family will also have a plate of antipasto with cured meats, cheese, olives, and pickled vegetables ready for when guests arrive. 

Northeast: Cranberry relish

Cranberry relish or sauce may seem like a universal Thanksgiving food, but homemade (not canned) sweetened cranberry relish seasoned with orange zest has its origins in the Northeastern quadrant of the country.

Get the recipe for cranberry relish here.

What else would you find on this Thanksgiving table?

The Northeast favors stuffing made with sausage and pumpkin pie, as well as other traditional Thanksgiving foods.  

Southwest and West: Frog eye salad

Frog eye salad may sound bizarre to anyone from the East Coast, but for people from the West and Southwest regions of America, it's a must-have for Thanksgiving. This sweetened, fruity pasta salad is made with acini di pepe pasta, pineapples, mandarin oranges, Cool Whip, and marshmallow topping. 

Learn how to make it here.

What else can I find on this Thanksgiving table?

If you're eating frog eye salad, you may also be partial to Jell-O salad, which is universally accepted as an important Thanksgiving side dish in Utah. In the Southwest, you're more likely to find Latino flavors like blue cornbread stuffing with chorizo.

New Mexico and Arizona: Pumpkin empanadas

Pumpkin empanadas are the perfect melding of American tradition with Mexican roots.

Add your own version to your Thanksgiving dinner with this recipe here.

What else would I find on this Thanksgiving table?

When you're in New Mexico or other Southwestern states, think spicy. A New Mexico Thanksgiving host will add chile to everything: gravy, stuffing, and even a chile-rubbed turkey.

Midwest: Green bean casserole

Green bean casserole may be a staple on many Thanksgiving plates, but you'll mostly find it in the middle of the country. Midwesterners consider the canned cream of mushroom soup, fried onions, and green bean dish to be an important part of the November holiday. 

What else would I find on this Thanksgiving table?

In the Midwest, regular cornbread is replaced by the creamy spoonbread corn pudding. In certain regions, you'll also find German potato salad on the table, as well as cherry pie instead of pumpkin pie for dessert.

Midwest, specifically Minnesota: Wild rice casserole

Wild rice casserole can be served on the side or stuffed inside the turkey. Usually found in Minnesota or Wisconsin, wild rice casserole is traditionally made with mushrooms, pecans, and onions, but there are variations.

Learn how to make this dish here.

What else would I find on this Thanksgiving table?

When in Wisconsin, there's no better time to make the state's famous cheddar the star of your meal for cheesy mashed potatoes. 

South: Sweet potato pie

Out of all the regional Thanksgiving flavors we've mentioned, the strongest traditions probably come from the South. The Southern half of the United States prides itself on unique (and heavy) Thanksgiving dishes like sweet potato pie instead of the typical pumpkin pie. 

What else would you find on this Thanksgiving table?

What wouldn't you find? A typical Southern Thanksgiving table buckles under the weight of one or several types of macaroni and cheese, okra pickles, cornbread, and sweet potatoes with marshmallow topping. It also wouldn't be a Southern meal without generous portions of collard greens.

Kentucky: Derby pie

Kentucky derby pie, a chocolate pie with walnuts, is a tradition that's rooted in horse racing and makes for a tempting dessert. 

Learn how to make this chocolate pecan tart here.

What else would I find on this Thanksgiving table?

Kentucky, like the Midwest, is also known to favor spoonbread over typical cornbread, as well as potato rolls instead of typical dinner rolls. 

Georgia: Pecan pie

Crunchy, gooey pecan pie finds its home in Georgia on Thanksgiving, made with nuts, corn syrup, and butter. 

What else would I find on this Thanksgiving table?

In Georgia, besides all of the aforementioned Southern staples, you'll find peaches in abundance, especially in the form of peach pie.

Southeast, especially Florida: Key lime pie

Florida's state food is key lime pie, so of course it makes its way onto the traditional Floridian Thanksgiving table. 

What else would I find on this Thanksgiving table?

Canned cranberries are more common in the Southeast than fresh cranberry relish. Much of the Southeast also celebrates its Cajun roots on Thanksgiving with dishes like gumbo, crawfish, deviled eggs, and fried oysters. 

California: Sourdough stuffing

There are many varieties of the California-based sourdough stuffing recipe. Some versions are mixed with turkey sausage or fresh oysters, while others are artichoke or kale-based.

What else would I find on this Thanksgiving table?

Surprisingly, one of the more popular California side dishes for Thanksgiving is salad, often made with bright, fresh citrus and vegetables. Californians also prefer their turkey grilled instead of baked or fried, and, of course, paired with local wine.

Pacific Northwest: Mushroom gravy

Mushrooms are one of the most abundant ingredients in a Northwestern Thanksgiving, whether they come in gravy form, or are sautèed as a side. 

What else would I find on this Thanksgiving table?

Turkey alternates abound, like venison. You'll probably also be served oyster dressing and fresh vegetables like Brussels sprouts.  

Hawaii: Okinawan purple sweet potatoes

You know you're in Hawaii when your mashed potatoes are purple (and no, that's not food dye!) Okinawan sweet potatoes are sweet and slightly nutty, and can be served mashed, baked, or own their own. 

What else would I find on this Thanksgiving table?

There's no question that many Hawaiian Thanksgiving traditions are different than those of the coastal United States. Here, it's not Thanksgiving without fresh poke or sashimi, and the turkey is often smoked, kalua-style.

Source: https://www.insider.com/regional-thanksgiving-dishes-us-2017-11

 
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