Since I’ve started working full-time, I’ve really noticed how important it is to keep a budget. It’s not hard to make one – but I’ve found it makes a huge difference to my savings goals and helps me keep my spending under control. Basically, my budget consists of how much I earn (I get paid monthly, but the same principle applies if you get paid weekly or fortnightly too), then I break that down into how much money I need for my general living expenses, paying my board at home, petrol for my car, some money I give to my church, and other things like my mobile bill. Then I take out how much I want to save, and what’s left is my own money to do what I want! Some people get really detailed in their budgets, listing things like groceries, movie tickets and things, but mine’s a bit more general. When you have all the numbers in front of you, it’s easy to see where your money goes – and then you can play around with those numbers if you want to save more – or have more money to spend!
Cheers!
Luke

“Today is Teach Your Kid to Save Day!”

By srobbins | April 27, 2010

Too many parents assume that their children are learning about financial literacy in the classroom. According to the 2006 Capitol One Back to School Survey, Only 43 percent of parents have discussed the importance of prioritizing needs and wants with their kids, and a surprising 42 percent of parents have not taken any steps whatsoever to discuss financial basics with their children.

With April being Financial Literacy Month, it is the perfect time for parents to sit down and discuss with their children how important it is to save their money. These lessons can be taught to children of any age but more importantly need to be taught to young adults to who are getting ready to go off to college and manage their own bank accounts and credit cards.

While it is important for parents to be talking to their kids about money, Junior Achievement is a great way for them to be learning about it while in school. Junior Achievement teaches students practical skills that position them for success, such as how to create and use a personal budget, how to calculate the cost of credit, and the importance of saving and investing for the future. And, our programs are often delivered by volunteers from the local business community, who can provide positive career role models for students.”

I have been following the speakers at TED for only a little while now. As usual, I was trawling through youtube one day and I found a speech by Cameron Herold. The video really stuck out to me. I was inspired by Cameron’s determination to try and figure out how money works. I am not suggesting that you all go out and ‘do a Herold.’ But I would recommend reading through the transcript, or listening to the video as I’m sure that you will learn something. The transcript is pretty lengthy so I have spilt it into three parts…enjoy…..and don’t forget to leave your comments.

 The following passages have been transcribed from  

http://www.youtube.com/watch?v=dCar_sFfEf4

“When I was a kid in grade school, in grade 2, in Winnipeg, my teachers sent a note home to my parents and said that I was a terrible student and that I wouldn’t focus, and that I wouldn’t pay attention, and that I was sitting at the back of the class playing games, and they were right and that kind of happened in grade 3 and in grade 4 and in grade 5 and then all the way through school.  So, I would be willing to bet beer tonight that causes or does not cancer, I would be willing to bet that I’m the dumbest guy in the room because I couldn’t get through school, I struggled with school, but what I knew at a very early stage was that I love money and I love business and I love this entrepreneurial thing and I was raised to be an entrepreneur.  And what I’ve been really passionate about ever since and I’ve never spoken about this ever until now – so, this is the first time anyone has ever heard it except my wife three days ago, and she said, “What are you talking about?”  And I told her – is that I think we missed an opportunity to find these kinds who have the entrepreneurial traits and to groom them or show them that being an entrepreneur is actually a cool thing.  It’s not something that is a bad thing and is vilified which is what happens in a lot of society.

 Kids, when we grow up, have dreams and we have passions and we have visions and somehow we get those things crashed and we get told that we need to study harder or be more focused or get a tutor.  And my parents got me a tutor in French and I still suck in French.  Two years ago, I was the highest rated lecturer at MIT’s entrepreneurial master’s program, and it was a speaking event in front of groups of entrepreneurs from around the world.  When I was in grade 2, I won a city wide speaking competition but nobody had ever said, “Hey, this kid is a good speaker.  He can’t focused but he loves walking around and getting people energized.”  No one has said “get him a coach in speaking.”  They said get me a tutor on what I suck out.  So, as kids have showed these traits, then we need to start looking for them.  I think we should be raising kids to be entrepreneurs instead of lawyers.  And unfortunately, the school system is grooming this world to say, “Hey, let’s be a lawyer or let’s be a doctor” and we’re missing that opportunity because no one ever says, “Hey, be an entrepreneur.”

 Entrepreneurs are people who’s a lot of in this room, who have these ideas and these passion or see these needs in the world and we decide to stand up and do it, and we put everything on the line to make that stuff happen and we have the ability to get those groups of people around us and want to kind of build that dream with us.  And I think if we can get kids to embrace the idea at a young age of being entrepreneurial, we could change everything on the world that’s a problem today.  Every problem that’s out there, somebody has the idea for, and as a young kid, nobody can say it can’t happen because you’re too dumb to realize that you couldn’t figure it out.

 I think we have an obligation as parents in the society to start teaching our kids to fish instead of giving them the fish.  The old parable, “If you give a man a fish, you feed him for a day.  If you teach him how to fish, you feed him for lifetime.”  If we can teach our kids to become entrepreneurial, the ones that show those traits to be, like we teach the ones who have science gifts to go on in science.  What about if we saw the ones with entrepreneurial traits and taught them to be entrepreneurs, we could actually have all these kids spreading businesses instead of waiting for government hand it.  What we do is we sit and teach our kids all the things they shouldn’t do – “Don’t hit, don’t bite, don’t swear.”  My 9-year-old right now is into swearing big time.  I’m harnessing a little bit.  He actually told me he learned the “C” word the other day and I was terrified and he said, “It stands for crap” and I was like, “Yes.”  Right now, we teach our kids to go after really good jobs and the school system teaches them to go after things like being a doctor and being a lawyer and being an accountant and a dentist and a teacher and a pilot.  And the media says that it’s really cool if we could actually go out and be a model or a singer or a sports hero like a long ago like Crosby.

 Our MBA programs do not teach kids to be entrepreneurs.  The reason that I avoided an MBA program, other than the fact that I couldn’t get into it, was because I got a 61% average out of high school and the only school in Canada that accepted me was Carleton. Carleton is a good school because you buy one term and get one free, which is kind of cool.  But our MBA programs don’t teach kids to be entrepreneurs, they teach them to go work in corporations.  So, who’s starting these companies?  It’s these random few people.  Even in popular literature, the only book I’ve ever found and this should be on all of your reading lists – the only I’ve ever found that makes the entrepreneur into the hero is Atlas Shrugged.  Everything else in the world tends to look at entrepreneurs and say that we’re bad people 

Now, I look at even my family.  Both of grandfathers were entrepreneurs, my dad was an entrepreneur, and both my brother and sister and I, all of three of us, own companies as well, and we all decided to start these things because it’s really the only place we fit.  We didn’t fit in the normal work.  We couldn’t work for somebody else because we’re too stubborn and we have all these other traits.  But kids could be entrepreneurs as well, and a big part of a couple organizations globally, called The Entrepreneur’s Organization and The Young President’s Organization, which came back from speaking in Barcelona at the WPO Global Conference and everyone that I met over there who was an entrepreneur struggled with school.”

more to come soon..

‘Financial literacy is one of the most important skill-sets a person can posess. The ability to make sound financial decisions can determine the quality of the life you lead. Young people must be taught these skills in order for them to master money, and not the other way around.’

Chris

Ahh, credit cards. That wonderful promise of being able to purchase anything that you want, whenever you want it. No more waiting for payday, no more budgeting and saving and ‘free’ money whenever you need it. Right? Yeah right! The banks have already got that one covered.

Credit cards are a great; they just have to be managed responsibly.

The banks (or financial institution) give you access to money before you earn it – so generous of them. For this wonderful privilege, they charge you a fee – that ‘fee’ is in the form of interest. Credit card interest can be anywhere from 10% – 30% compounded annually.  Credit cards are very useful and if used wisely can be a wonderful tool. The problem is many people don’t know how to use them correctly.

If we pay our credit cards off before the ‘interest free’ period then we don’t get charged any interest.  Unfortunately, most people don’t always do that – and that’s more money out of your pockets.

Next time you reach for your credit card have a think, it might cost you more than you think.

Mat