College Students Still Face Crippling Credit Card Rates

HS gradCredit card lenders around the country are beginning to salivate as college students head to campus — though not as enthusiastically as they once did. Young adults used to be a powerful debt-generating machine, and banks took full advantage. Then the CARD Act of 2009 made many of the old practices that lenders used to lure and keep college students in debt illegal. However, even with those changes, college student credit cards carry some of the highest annual percentage rates in the country, rivaling those of store credit cards.

The CARD Act Didn’t Eliminate the Problem

Pre-CARD Act, college students could simply sign up for a card at age 18. Now, individuals younger than 21 cannot be offered pre-approved credit cards. They must have proof of income or a co-signer older than 21. But these restrictions don’t make it hard for the average college kid to obtain plastic.

Post-CARD Act, credit card companies were largely banned from their old tricks of handing out free T-shirts, pens, tote bags or Frisbees to entice naive students. Instead of offering tangible goods, lenders moved to using rewards to lure college students to spend, spend, spend their way into owing money at cripplingly high annual percentage rates.

Analyzing the APR of Student-Targeted Credits Cards

Read the rest on DailyFinance

Posted in Credit Cards, DailyFinance Tagged with: ,

Frugal Find Friday: Paperless Post

To most of you it’s 2014, but to me it’s the year of weddings. I’ve been invited to five his year, with the privilege of being the Maid of Honor to my best friend in one. Since May, I’ve witnessed a variety of wedding ceremonies and receptions, from a vineyard to a traditional church and hotel ballroom to a backyard. While budgets and preferred styles for the actual wedding may fluctuate, there is one point where all weddings find a commonality: invitations.

Frankly, I’ve always figured a Facebook event would do the job just fine. (Yes, I’m cheap). But I’ve been told that’s a no-go.

When my cousin Bridget sent out the invitations to her wedding I was floored, relieved and wanted to send her major snaps for ingenuity. Why? Because Bridget’s wedding invitation arrived in my inbox, not my mailbox. Why was I relieved? Because this opens the door for me to do something similar one day, in the very distant future.

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A modified version of the invite

Using a website called Paperless Post, Bridget and her husband-to-be designed a beautiful invitation, and saved themselves hundreds of dollars.* Not to mention tons of time, because guests RSVP right to the email, which eliminates having to keep track of all those tiny RSVP cards. The terrifying website Cost of a Wedding says the average cost of wedding invites is $812! Have you ever noticed just how much paper goes into a wedding invite? The big invitation, then that little one about the reception, the RSVP card, maybe one with directions and another with details on brunch for the next day? I’m sure Paperless Post would please the environmentalist crowd.

I decided to investigate just how much it would cost to invite people to a hypothetical party using Paperless Post.

When you sign up for Paperless Post, for free, you’re automatically given 25 “coins”. You can also buy coins, starting at 20 for $6. I went through the process of creating my own invitation to play around with price points.

Paperless Posts offers a variety of free, customizable cards. Naturally, I started there. There are plenty of beautiful invitations for people going the wedding route, but I went with a fun card to send out for my fake party.

I created a card with an envelope, so people feel like they’re opening up a virtual card, which is kind of fun.

After designing the card I got to the checkout and started plugging in guests. It cost one coin per guest and the added envelope touch also set me back a coin. (You can also add a customized stamp for another coin.) So, to send the invite to two guests for a grand total of four coins (look at that fast math!).

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If I were using this same system for my wedding, and had 200 person invite list (completely realistic with the size of my extended family), I’d need 400 coins to send out my invites. It would cost $60 to buy 400 Paperless Post coins. That’s significantly cheaper than printing actual cards and mailing them out to guests. I know the Miss Manners of the world would gasp in horror. Call it uncouth if you’d like, but I find the snazzy email invite incredibly savvy.

Here is the snarky invitation to my fictional party!

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Hope to see you there!

* I later learned they did traditional invitations for the older generation, but they still must have saved a bundle on invites!

**If you like what you read here, or just find me super-duper in general, then please consider nominating me for this year’s Plutus Awards. Perhaps Best Blog for Teens/College/Young Adults?! Just click here to get to the voting page. **

Posted in Frugal Find Friday Tagged with: , ,

Leaving a Job? Here’s How to Rollover a 401(k)

**If you like what you read here, or just find me super-duper in general, then please consider nominating me for this year’s Plutus Awards. Perhaps Best Blog for Teens/College/Young Adults?! Just click here to get to the voting page. **

Back in April I took a big career leap and left my steady desk job for the thrill of joining a start-up – where I still have a desk and a steady paycheck, but you know what I mean.  I left behind one important thing when I started my new gig — my retirement fund. I needed to rollover a 401(k) before I felt I’d completely moved on. Fortunately, my new employers offered a matched on a new 401(k). Unfortunately, my only option was a Traditional 401(k), so I couldn’t easily roll over my current Roth 401(k).

Why, you ask? Because Uncle Sam and the IRS say so.

A Traditional 401(k) is a pre-tax account, so it lowers my taxable income (yay!) but it also means I’ll have to pay taxes on that money once I start making withdraws in retirement (boo…). A Roth 401(k) means my contributions were taxed before going into my investments. My income doesn’t get a tax break now, but I can take money out in retirement without Uncle Sam’s grubby fingers all over my fat stacks.

So, I had to make a decision about what to do with my original 401(k).

I had a few choices:

1)   Leave it: I had enough money in the account (just north of $8,000) to qualify for leaving it alone.

2)   Roll my employer’s contribution into my new 401(k) and roll the rest into a Roth IRA

3)   Roll all of it into IRAs (one Roth and one traditional)

But wait, why two IRAs? While I had been contributing post-tax money into my 401(k), my employer had not. The contribution from my former employer needed to be rolled into a pre-tax account. My new, traditional, 401(k) would qualify and so would a traditional IRA.

After slight deliberation, I felt it would be easiest to roll my old 401(k) into two Vanguard IRAs – one Roth and one Traditional. I already had a traditional IRA set up with Vanguard, so it took me all of five minutes to get a Roth IRA prepped for my roll over.

It’s incredibly simple to rollover a 401(k) into a Vanguard IRA(s). I started by doing what any millennial would do:

Screen Shot 2014-08-20 at 5.55.47 PMand was taken to this page:

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I clicked on “start your rollover online”. After answering some simple questions they directed me how to split my 401(k) into the two IRAs. I found it easiest to just ask the kind folks in charge of my current 401(k) how much had been taxed (my contributions) and how much had not (the employer contribution).

I then filled out paperwork from my former employer to start the rollover process.

Then I hit a snag.

My former employer was in the process of moving their 401(k) program from a company called Plan Destination to Fidelity. I had been warned I had to rollover a 401(k) before the black out date when the change occurred. So – even though I filled out my paperwork on time, they didn’t finish it in time on their end and started rolling over my 401(k) to Fidelity.

Now I had another decision to make.

Do I just leave my 401(k) with Fidelity – another reputable brokerage firm – or continue with the initiation to rollover into Vanguard? Admittedly, another Fidelity product caught my eye: the 2% cash back card, because you can put your cash back into an IRA. After some more deliberation, I decided to go ahead and move it all to Vanguard. I liked the idea of simplifying where my money would be, plus I had a relationship with Vanguard and loved their customer service.

To get my rollover started, I simply called Fidelity and told them I’d like to rollover my funds to existing IRAs with Vanguard. I made sure to verify the Roth (post-tax) funds would be on one check with the pre-tax funds from my employer’s contribution on another.

Unfortunately, another small inconvenience occurred.

If my paperwork had been processed properly prior to the blackout date, I could’ve just had Plan Destination roll my money over to Vanguard (by sending checks to a Vanguard P.O. Box) with no problem. Fidelity didn’t play that way. Instead, they insisted on sending me the checks and then I had to send them on to Vanguard.

I called Vanguard to explain I would be mailing in the checks myself, verified the address I should send them to and asked if I needed to do anything else. The kind customer service rep recommended I write a brief letter detailing exactly where each check should be deposited, even though it would be detailed on on the check.

Taking his advice, I wrote a quick summary of the amount on each check and which type of IRA it should be deposited into and the corresponding account numbers.

The checks showed up about a week later, and I walked them over to the post office, sprang 63 cents for a stamped envelope and dropped them in the mail. Like magic, I saw the funds in my Vanguard account three days later.

Many people find the most stressful part of this process picking the funds for your investments. I am by no means a professional in this arena, and had to seek a lot of advice from my Dad about setting up my first 401(k). As a general rule though: the younger you are the more risky you should be. 100 – your age = the percentage you should have in stocks. While some fight that it isn’t the case anymore, it’s at least a good suggestion for the young investor

But you probably want to know what I did.

You need a certain amount of money to buy into various funds, which limited some of my options. For my Roth IRA I went with a Vanguard 500 Index Fund and a Vanguard Target Retirement 2040 Fund. When in doubt, an S&P 500 fund is a pretty solid pick. My traditional IRA was already set up (also including the Vanguard 500 Index Fund) – so I just dumped my rollover funds in the existing investments.

Wait – you don’t even have a 401(k)?!

GASP! I know not everyone feels they can afford to be contributing to retirement yet, but if your employer offers an employer-matched 401(k) then you best be investing. At least enough to get the match. Otherwise, you’re throwing up the finger to free money. That wasn’t a typo. FREE MONEY! Still thinking about it? Then please read my post on the magic of compound interest or this one breaking down 401(k)s #MillennialStyle.

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Posted in Retirement Tagged with: , , ,

A Beginner’s Guide to Using a Credit Card

Discover it

Not suggesting you get Discover. Just had this picture on deck.

I recently had a conversation with someone near and dear to me about credit cards. The conversation started innocently enough when I asked how using her first credit card was going? She flippantly mentioned she’d paid the minimums and I gasped. What? Why?! She seemed flummoxed by my questions.  She asked why her lender would put for a minimum payment on her statement if that isn’t what they wanted? I walked her through interest rates, minimum payments and how lenders are essentially trying to put you in debt. Does that sound cynical? It’s true.

In response to her conundrum, I decided to write an extensive guide on how to use a credit card for beginner’s on, because we make credit card recommendations there and it seems important to have this information available to any credit card rookies (and even some experienced users). 

So, you want to open a credit card? It’s a good idea – most of the time.

Opening a credit card provides a simple way to establish and build credit history. Yes, certain credit cards can earn users rewards for cash back, travel miles, and redemption points, but the road to reward chasing is littered with people who slipped into credit card debt. Beware of your budget and your personality if you elect to pursue the path of reward chasing.

If you have trouble paying bills on time, saying no to purchases you can’t afford or just sense a credit card may not be a good idea for you – then trust your gut. While a credit card is a great tool to build financial health, it can also lead to painful consumer debt when used improperly.

Still think you’re ready to take on the responsibility of owning a credit card? Then let’s walk through how to select, understand, apply and manage your credit card.

Step One: Select your type of credit card

Credit cards were not made equal and we’re not just talking in terms of interest rates and rewards. Your unique situation will determine which credit card you should (and could) apply for.

Click on over to MagnifyMoney to read the four steps for credit card rookies.

[Discover it image from Flickr]

Posted in MagnifyMoney Tagged with: ,

FICO Score Changes Could Help Millions of Americans

Two months ago, I sat across a table from a woman on the verge of tears. As she clenched her jaw and cast her eyes towards the ground, she disclosed her overwhelming financial situation. An unexpected medical expense depleted her savings and sent her into a downward spiral of financial problems complete with collections agencies pestering her for payment. Even though she paid her other bills on time, avoided consumer debt and worked two jobs to support her family while trying to pay off her medical bills, she felt bankruptcy was the only way out.

Unfortunately, her story is familiar to many other hard-working, responsible Americans around the country. An unexpected medical expense can quickly send the most diligent and responsible people into dire financial straits. Those unpaid debts go to collections, causing a major hit on a credit report and score. Once a person’s score drastically drops, it becomes hard to get a loan to refinance debt without a staggeringly high interest rate.

As of July, about 64.3 million consumers in the U.S. had a medical collection on their credit report, according to data from credit bureau Experian (EXPN), and a hope is on the horizon for them.

FICO (FICO) –- the company behind credit scores -– on Thursday announced an unprecedented change to its scoring model: FICO Score 9 will change the way in which paid collection agency accounts, unpaid medical bills and non-medical bills impact a score.

What Are the Changes?

Read about the changes and why they matter at DailyFinance

Posted in DailyFinance Tagged with: , ,

5 Credit Card Myths Hurting Your Wallet and Credit Score

Thus far I haven’t re-posted any of my articles that I’ve been writing over at, but I feel very strongly that this one needs as many eyeballs as possible!!

Credit cards, like any financial product, seem to create a certain amount of anxiety for people. There are myths and rumors running rampant about how to spend on a card, when to pay them off and whether or not to even have one. Unfortunately, some of these rumors may be causing your wallet – and your credit score – more harm than good.

Here are five myths we hope you’ll disregard next time you hear them.

1. Don’t get a credit card, just use prepaid or debit cards

Never drink one beer, you’ll just get incredibly sick.

That’s essentially what people are saying when they tell you not to get a credit card.

There is a common misconception that carrying a credit card will ultimately lead to damaging credit card debt. Sure, some people don’t understand how to handle credit cards – or have personality types (looking at you present hedonists), which aren’t conducive to having access to a credit limit.

Read the reason why and the other four myths over at MagnifyMoney’s Fine Print blog. 

Gif taken from GIPHY

Posted in Credit Cards Tagged with: , ,

How To Reduce or Avoid Student Loan Debt: A Guide To Being A Debt-Free College Student

I don’t have first hand experience with student loans, so I happy to introduce someone who knows a thing or two about how to handle them: Gary Dek. Gary is the founder of, a site focused on personal finance, career and education advice, and self-improvement tips. Below are his tips on handling student loans and paying for college without a massive price tag.

diplomasWith the rising costs of college and the overwhelming student loan debt most are graduating with, millennials are starting their professional careers with a negative net worth.

I was fortunate enough to attend a 4-year private university and graduate with only $13,500 in subsidized Stafford loans, which I paid off in 10 months. Although I did graduate a year early (note to high school students – those AP classes are worth thousands in the future), I still managed to get a $200,000 education for close to 5% of the cost. And no, my parents didn’t pay for the difference out-of-pocket.

Our host, Erin, did it even better – she’s never had student loan debt (or any other kind). Now that’s the kind of person you want to be taking personal finance advice from.

The following steps will help you avoid overwhelming debt and teach you how to reduce student loans.

Pick A Degree That Will Yield A High Paying Job

If you want to go to a prestigious university that will be expensive, plan to major in engineering, business, computer science, finance, or something that will help you land a job paying at least $50,000 a year after graduation. A decent salary will help you manage your debt.

Studying to be a teacher or artist at the same school will make it much harder to pay off your debt. If high-pay isn’t critical to your dream job, then consider the best public university you get accepted to.

If getting a diploma from a prestigious school is a goal, think about going to a junior college first to get your general education credits out of the way, and then complete your degree at the university of your choice.

Apply For Scholarships

One of the best ways to avoid student debt after graduation is to earn free money – scholarships. There are plenty of organizations giving away free money to those who are looking finance their education. Some scholarships are need-based while others depend on your academic achievements. Here’s how you can qualify:


Keep up the hard work all through college to maintain scholarships and be eligible for more!

  • Do well in school. If you have a high GPA (grade point average), you may be eligible to receive a scholarship directly from your university. Talk to the Financial Aid Office (FAO) to discuss what types of scholarships are available and if there is paperwork you must fill out to be considered. For private, third-party scholarships, some companies give money to students who come from lower socio-economic backgrounds. This is called a need-based scholarship based on your parent’s income. However, there are also opportunities for academic scholarships, or a combination of both. Even if you aren’t a freshmen but your GPA has been high throughout college, you may still be eligible.
  • Be a good athlete. Some colleges are more likely to give better scholarships to athletes than those who excel academically. If you’re athletically gifted in a major sport, apply for scholarships at schools that value your skill. Keep in mind, though, that Ivy League universities do not offer athletic scholarships.
  • Show your leadership abilities. Aside from physical prowess and academic success, being a volunteer, belonging to clubs, and having strong leadership skills is a plus when applying for scholarships. In fact, the group you volunteer for may have scholarship programs that only volunteers can apply for, thus significantly reducing the pool of competing candidates.
  • Are you a minority? If so, there are several scholarships simply based on your ethnic or religious background. Organizations like the NAACP, the Jackie Robinson Foundation, and State Farm Insurance can help lower your out-of-pocket expenses.
  • What’s your major? There are scholarships available for specific programs of study such as Spanish or Sociology. These scholarships usually require a minimum grade point average.

Look Into Grants

Government grants are a form of free money as well and are awarded depending on your financial need. They won’t cover your whole tuition, but compared to scholarships, loans, and work-study offers, government grants are the easiest to get. Just fill out the FAFSA application starting January 1st of every year to determine whether you qualify for the following school year.

  • The Pell Grant: Pell Grants are based on financial need, the cost of attendance at your school, and whether you are a part-time or full-time student. The maximum Pell Grant award is $5,550 per year.
  • Federal Supplemental Educational Opportunity Grant (FSEOG). Students who can prove that they have extreme financial need can be eligible for this government grant. It ranges from $100 to $4,000 a year.
  • The TEACH Grant. The Teacher Education Assistance for College and Higher Education Grant is offered by the federal government for students who plan on teaching at schools in low-income areas or in a “high-need field”. Within the first eight years after graduation, students are required to teach for four years or the grant will have to be paid back like a student loan. The program pays as much as $4,000 a year.

All this information can be found at

Research Loan Options

If you have student loans, there are ways to lower the amount of interest you must pay back.

  • Know the difference between a “variable” and “fixed” interest rates. While a fixed rate might look more expensive upfront, as interest rates increase in the future, variable rates will increase with no ceiling. While the interest rate environment in the United States may be artificially suppressed for the next couple years, remember that your student loan has a 10-year term. Do you believe we will have low interest rates for the next 10 years? I don’t, and would recommend a fixed rate.
  • Know the difference between private and government loans. You can defer government loans, such as a Stafford or Perkins loan, so that you won’t have to start making payments until you graduate. Government loans tend to be cheaper and more flexible. If you become disabled or die, the government will forgive the loan. It’s in your best interest to use government loans instead of private loans, but if you find your expenses aren’t fully covered, you might have to consider a private loan. Fortunately, as of 2014, the U.S. government is doing its best to compete against private lenders and push them out of the market.
  • Have someone co-sign for you. Most of the time, you really don’t have a choice. Since students have little to no credit, lenders require a co-signor. Remember, though, that if you miss a payment, the person who co-signs will be responsible. This is one reason life insurance agents try to encourage young adults to buy life insurance since a death benefit will pay off the student loan and avoid it becoming a parent’s liability. Frankly, the risk of a young, healthy adult dying is slim, so instead of buying even the cheapest term life insurance policy, take the cash and pay down your student debt as quickly as possible.

Other Options to Reduce Student Debt

31833_412558826136_3194986_nGet A Job. With proper time management, you can work while going to college. You may have to manage your time better and forgo a few parties, but when you graduate and find you have little to no debt left over, you’ll be glad you took care of business.

Working through college will not only help you become a better planner, but your future job search will benefit from your past experience. Even if your part-time job during school is unrelated to your chosen career path, holding down a stable job demonstrates responsibility and reliability.

Work-Study Programs. Assuming your FAFSA results offer you a work-study program, you will have a chance to get a job on campus. With work-study, you will be paid to do office work in a department or lab. Some students may even be able to do research with a professor.

The best part about work-study is that down-time allows you to study for classes. For more information on work-study, discuss your options with a student advisor at your school.

Paid Internships. Another way to mitigate your student loan debt is to get a paid internship. A lot of majors require an internship anyways, so you’d be killing two birds with one stone. Not all internships are paid, but you’ll still get valuable experience that will look good on your resume and help you to find a better summer internship or job. Meet with your academic advisors, professors, or the career services center at your school for more information.

Live Within Your Means

Living in affordable housing and being thrifty with your money is really the first step towards making your debt less overwhelming. While living in a college dorm may be convenient and give you ample opportunity to make new friends, sometimes it isn’t the most cost-effective housing available. You may have to spend up to $1,000 a month to live on campus, but with good roommates, you could be paying as little as $400 a month for rent in an off-campus apartment.

Along with your dorm expense comes a required meal plan, which averages about $10 per meal. That’s over $200 a week for crappy dorm food. If you have an apartment with a kitchen, you can spend less than $200 a week on groceries for you and your roommates. If you all pitch in on groceries and cooking, you will save thousands. Just don’t sacrifice your health to save a few dollars.

Finally, resist the urge to splurge on expensive meals, alcohol, and other things you really don’t need. Have a budget in mind to help you avoid credit card debt. If you thought student loan debt is bad at 7% interest, imagine how financially devastated you’ll feel with credit card companies charging you up to 30% in interest fees.

Use Your Entrepreneur Skills

While you’re in college, utilize your special talents or skills to supplement your income. Charge students for tutoring, website design, become a freelance writer, start a personal finance blog to educate others on financial responsibility, or sell products on eBay or Amazon. Not only will you earn decent money, but you’ll develop real-world skills future employers will appreciate. And who knows, you may just come up with the next big thing.

Student Loans Are An Investment In Yourself

While a lack of research and planning can result in overwhelming debt, don’t skip a college education because of financial issues. Consider your degree an investment in yourself that will pay dividends for the rest of your life. College is worth it for most people, and there are options and opportunities available to help reduce or altogether eliminate student debt.

Start a savings account, be frugal with your money and apply for scholarships and grants. If, after exhausting all of your efforts, you still find that you can’t cover your entire tuition and school expenses, talk to your school. The university’s administration will work with you to find financing in forms you may not have thought of or couldn’t access on your own. Make an appointment with a financial aid advisor/counselor for more assistance. The office may even have extra funding left over for the year!


Posted in Debt, Student Loans Tagged with: , ,

3 Totally Common Financial Tips You Should Probably Ignore

IMG_3167Whether you get your financial tips by asking friends and family or checking out library books, attending seminars or searching online (at sites other than DailyFinance), impractical pieces of advice abound.

Too many personal finance experts tend to populate their cable appearances, books, columns and blogs with the same simple tidbits. But some of that common advice is also … useless. For each of these three cliched tips, let’s look at some better alternatives.

1. In Debt? Cut Up Your Credit Cards

Certain financial gurus advise people in debt to cut up all their plastic and consider using credit cards the eighth deadly sin. Here’s some advice: don’t.

Find out why and other pieces of advice to ignore on DailyFinance.

Posted in DailyFinance Tagged with: ,

Frugal Find Friday: Go For a Walk

Walk in the ParkAs a New Yorker (okay, New York City resident…I can’t say “New Yorker” for another seven years), I tend to do a lot of walking. It’s one of the main modes of transportation in this city, and you quickly realize distance is all relative. A mile can be a standard walk from point A to point B, while my car-driving-comrades wouldn’t fathom walking a mile in the summer heat. Not when you can roll down the windows and cruise, as Florida Georgia Line would croon.

Lately, I’ve gotten into the habit of going for longer walks than necessary. Instead of walking two blocks up to my subway stop, I’ve started clocking a mile or two depending on how energetic I’m feeling. Not only does this give me a chance to unwind and squeeze a little exercise in after sitting for eight hours, but I like taking various routes to my final destination so I can check out new pockets of my city.

The opportunity to go for a walk also gives you a moment to relax your mind without the constant distraction of social media, TV and the constant bombardment of interruptions we deal with during our waking hours. Well, you could stream Netflix on your phone while pausing to tweet as you walk — but I wouldn’t recommend it. Unless you want to get side-swiped by a bike messenger.

To bring this back to money, I’ve started to use nighttime strolls as an opportunity to catch up with one of my friends who lives in my neighborhood. We both get caught in the “busy trap” of life, but lately we use our spare time for a power talk and walk session. We hit the pavement at 9:30 or 10:00 at night and spend 30 to 45 minutes catching up while walking (at a New York pace which is most people’s power walk) for two or three miles. It’s a great way to clear your mind before bed, and catch up with a friend without the cost and calories of grabbing drinks, drinks or coffee.

You also see some pretty great sites when you open yourself up to just wandering around. Here are some of my highlights from the last month:

  • Peach and I went for a late-night stroll during our trip to Austin and witnessed a proposal (which I shamelessly photographed).


  • I had a lot of solo time during my recent trip to London and spent most of it just walking around. My first afternoon there I stumbled upon Big Ben, the next afternoon I found Buckingham Palace and the third morning I sauntered into St. James Park while aimlessly wandering.

BigBenSt. James Park

  • My friends and I took a leisurely stroll through Central Park after brunch last Sunday and found a quiet meadow tucked away from the sights and sounds of New York.


So take this afternoon to just go for a walk!

Posted in Frugal Find Friday Tagged with: ,

Review: The Lemonade Stand (Plus a giveaway)

IMG_0745Long-time readers may remember my first financial lesson came from the rough-and-tumble suburban streets in North Carolina on a hot summer’s morning. To make all my journalism professors happy, I can condense an 800+ word story into a few sentences:  As an enterprising seven-year-old, I set up a doughnut stand during my mother’s yard sale. My father backed my business by fronting the money for supplies. After I sold out and made a nice little profit, he shocked me by taking part of my funds to cover the start up cost as well as pay my younger sister for being an employee.

This moment started a lifelong quest to understand money: how to make it, how to save it and how to invest it.

Betraying over-indulged millennials everywhere, I’m a strong advocate for tough love, especially when it comes to money. This is one of the many reasons I’ve always been enamored with Shannon Ryan of The Heavy Purse.

Shannon, herself a graduate of tough-financial-love school, is a force to be reckoned with in the field of financial literacy. She’s truly passionate about teaching children (her own and others) to understand money and helping parents learn how to create a financially literate generation.

She recently came out with a children’s book called The Lemonade Stand to help explain financial concepts like net profit, charitable giving, saving, budgeting and fairly distributing profits. Much like my Dad, Shannon didn’t shy away from teaching her kids how to handle money at a young age by treating them maturely. She too requires they pay her back for funding their entrepreneurial endeavors.

I started smiling as soon as I flipped the first page of The Lemonade Stand. My Dad would’ve loved to have a bedtime like this, instead of having to read Little Girls Wiser Than Men from The Book of Virtues for the millionth time (I had a feminist streak at a really young age).

Shannon does a great job of simplifying basic financial concepts to make them accessible to kids, without dumbing down the content. I wouldn’t be surprised if this book creates a huge surge in lemonade stands summer. Hopefully the parents can handle fulfilling their part and taking money from their babies.

I posed some questions to Shannon to get her take on how parents should handle talking to their kids about money and her true feelings on tough-love tactics.IMG_0744

Did you have a hard time “taking money” from Lauren and Taylor [Shannon's daughters] when you first taught them about net profit? 
Honestly, no. Does that make me a mean Mom? :) In all seriousness, it didn’t because I have worked with so many people who left home ill-prepared to face the realities of earning and managing their money. And these were smart people who didn’t have an entitlement attitude and had very loving parents. But because money is taboo in so many homes, they had never been taught how to make good decisions with their money. Nor did they understand the long-term ramifications of their bad decisions. It was worth a few initial grumbles to teach my girls that in the real world, employee or business owner, you don’t get to keep everything you earn.

How do other parents respond to the methods your using to teach your daughters financial responsibility?
Overall, very well. It’s interesting because children and money is unfortunately an overlooked topic and missed opportunity for most parents. Whenever I speak at group settings, I have so many people approach me afterwards with a ton of questions because they now see the importance of teaching kids about money. And I love it when I get emails from parents telling me their children have their save, spend and share jars set-up. One young girl went to the bank to open her first savings account and the bank teller asked her what she does with her money. She said, “The 3 S’s, of course – save, spend and share!” LOVE it!

What has been your proudest moment as a mom watching her daughters become financially responsible?
There are so many! A couple that come to mind is how much my girls have embraced sharing. Lauren took to it right away, but Taylor did not want to share. I didn’t want to force her because I wanted her to love sharing and not see it as an obligation. After she experienced firsthand how good it felt to share through our family share goal and saw how much her big sister loves sharing, she was ready to try it. And now she loves sharing. I think we, as parents, sometimes overlook sharing, and it’s such an important mindset to develop in our kids. It definitely helps prevent that entitled mindset from forming too. I am also really proud of how much the girls love earning money. In fact, it is very rare these days for them to ask to buy them something they find at the store. Instead they ask me for more ways to earn money so they can buy it themselves. Music to my ears.

How old should a child be when their parents parents should start teaching him or her lessons about money?
I believe parents should start talking to their kids when they are toddlers, around 3 years old. Now this often surprises parents. I don’t think you should start talking to them about your investment portfolio, but toddlers, in particular, are watching and mimicking you, including how you handle money. They are very sensitive to your emotions and take your words very literally too. At this stage, it’s more about being a good financial role model and being mindful of your words and actions around money. Plus it also makes everyone comfortable with the topic of money and sets the stage for when they are older and those conversations deepen.

Have your daughters’ understanding of finances ever surprised you?
Absolutely! My girls overall love to talk about money, especially their goals, but they are kids. Some days I wonder if they understand all the things I talk to them about. And then, of course, that is when they surprise me with the depth of their understanding. I taught them to set goals that make their hearts happy and when we were on vacation last summer, we offered to buy the girls a little souvenir. They talked back and forth with each other and declined our offer to our surprise. Their reason – they liked the souvenir, but they didn’t LOVE it, and they wanted to wait until they found something they LOVED so the family money wouldn’t be wasted. They truly get and I am incredibly proud of them.
Thanks, Shannon!
Hey Reader – Scroll down to find out how you could win an iPad mini!


The Lemonade Stand – iPad Mini Giveaway

July 14-31, 2014

Sponsored by The Heavy Purse

Co-hosted by Are Ya Gonna Eat That, Broke Millennial, Budget and The Beach, Budget Blonde, Budgeting for More, Busy Mom Budgets, Cash Cow Couple, Cents and Sensibility, Club Thrifty, Color Me Frugal, Debt Debs, Debt Roundup, Disease Called Debt, Eat Laugh Purr, Enemy of Debt, Eyes on the Dollar, Femme Frugality, Financially Blonde, Frugal Rules, Living Richly Cheaply, Luke 1428, Making Sense of Cents, Money Saving Dude, Monster Piggy Bank, Not Now Mom’s Busy, Reach Financial Independence, Shoeaholic No More, Stacking Benjamins, Tackling Our Debt, The Broke and Beautiful Life, The Finance Girl, The Frugal Farmer, The Random Path, Thrifty Dad, VeegMama, and Young Adult Money.

We’re Giving Away an iPad Mini to One Lucky Reader!

Help us celebrate the release of The Lemonade Stand and join Shannon in her mission to increase financial literacy in both children and adults. Broke Millenial readers can receive $3.00 off The Lemonade Stand with the coupon code TOUR3114.

“Everyone handles money. Unfortunately, not everyone does it with confidence. Money has long been a taboo topic in many homes, which makes it even harder for parents to know where to start or what to teach. So I created a series of children books to help parents ease into these important conversations. Financial literacy is one of the most loving gifts you can give your children, and I encourage you to make money conversations a priority in your home.”

The giveaway runs from July 14-31, 2014 and is open worldwide.*

* A winner located outside of the United States will receive a cash equivalent prize via PayPal.

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