A Financial Education Event
 

Summer Jobs For Kids

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Nifty Ways for Kids to Earn Money This Summer

The first job my sons Daniel and Philip ever had was a paper route. It gave them something to do during the summer, helped them start managing their finances and was even a little fun (at first). While we said they could only do it if they committed to it for a year, they occasionally passed duties on to their younger brothers, Jonathan (age 7 at the time) and Joshua (age 6).

While mama (age undisclosed) did the driving, the little boys did the delivering. On Joshua’s very first house, he grabbed the paper in his tight fist, barreled up the sidewalk, got his arm into an admirable wind-up and pitched the paper on top of the house! Rooftop-bound periodicals aside, allowing your kids to earn money can be a fun and prosperous adventure, as long as you’re willing to supervise them. Simply set boundaries that are appropriate and let them go to work.

Here are some great ideas to help your kids raise their own cash this summer while enjoying the benefits of earning, saving and sharing:

  • Rent-A-Kid – If you, a church or neighbor (someone you know) needs any odd jobs done, this is a great idea. When advertising the service, it’s important to plan early and be specific, polite and careful. You can even help your child make a small business card on the computer!
  • Washing cars and/or windows – This can be advertised similar to the Rent-A-Kid idea and only requires suds, soap and elbow grease. Focus on safe neighborhoods and quality work. Always accompany your child until you know the employer better.
  • Babysitting – A popular choice for young guys and girls, safety is key for this job. Encourage your child to take a babysitting/CPR course and babysitting people you know. Also, if they keep the house tidy and the kids happy, it can lead to repeat business.
  • Caring for pets – Since summer is a popular time for vacations, people are usually looking for affordable ways to care for their pets. For kids who like animals, this is perfect. Recommend they pass out flyers and visit the animal before they take the job.
  • Mowing lawns – For older kids, this is a go-to summer job and an excellent source of income. It can be dangerous, so it’s important to exercise caution and safety. Make sure they have the proper supply and safety gear and encourage a job well done (the best form of advertising).
  • Making and selling candy or drinks – Everyone loves candy, cool drinks and cookies/cakes, so this is a great option for the future chef. With permission, you can sell at sporting events, church bazaars, carnivals, festivals or farmer’s markets.

Before your kids take on a job this summer, be sure to think about safety, age-appropriate work, training, quality and following through. And after they’re finished, praise them for a job well done! Be sure they are working for family members or trusted friends and feel free to supervise their work by tagging along as long as they are young enough to need you!

What kind of summer job did you do as a kid?

Ellie Kay

America’s Family Financial Expert (R)

Red, White, and Scammed: Part 1

 

We have a long tradition of military service in our family. My grandfather was a bombardier who died in WWII, my father is a retired chief master sergeant in the Air Force, my husband, Bob, flew Air Force fighters for 25 years, our son, Philip, graduated from the Naval Academy and cross commissioned into the Marine Corp, our next son is a junior at the Air Force Academy, and the youngest son a plebe at Westpoint. In fact, the photo you see is Bob, pinning on the Philip’s Airborne wings–the very wings Bob earned 30 years ago when he was a cadet at the Air Force Academy!

Enlisted men and women are easy marks for sleazy car dealers, insurance scammers predatory lenders, and identity thieves. So pervasive are the rip-offs and so troubling is the debt incurred by military personnel that US Department of Defense officials recently labeled the situation a threat to national security. Here are a few things to keep in mind and to share with your military friends and family.

Q. The DOD has labeled the fraud situation among the military as a threat to national security. How does getting scammed impact lives overseas?

ELLIE: It’s all about distraction. When military members are distracted, whether it’s worry over identity theft or trying to wondering if their spouse is able to deal with messy finances at home—then that’s when accidents happen. Distraction leads to worry which leads to accidents. And when accidents happen, then there is loss of life. So if we want to help save lives overseas, then we can all do our part to protect our military members by exposing rip offs and scams whenever possible.

Q. What kind of paycheck does a typical recruit make & what are some of the questionable ways that local businesses try to get a piece of that paycheck?

ELLIE: They earn about $1800 per month & these paychecks can be carved to bits by bad deals. For example, a computer store outside of Great Lakes Naval Training Center in Illinois employs attractive women to troll for new sailors. Once they get them inside the store, they are pressured into buying a very basic laptop for more than $4000, which is three times as much as the computer is worth. Then they finance the deal and the computer ends up costing even more with the store also making money on financing.

Q. What are some other common ways that the military is ripped off and people should be aware of?

ELLIE: There was recently a multi-state investigation launched into life insurance scams that were being perpetrated against military members just before they took off to the Middle East. These scamsters sold soldiers extremely overpriced or misrepresented policies, taking advantage of the emotional situation of leaving families to go into harm’s way. This investigation ended with the companies offering more than $70 million dollars in refunds to thousands of service members. When it comes to life insurance, military members are offered SGLI or Servicemembers Group Life Insurance, which is a legitimate source for low premiums, so there’s really no need to secure other private insurance!

Q. Tell us about the “Red Cross” scam that is getting a lot of attention among military families?

ELLIE: This is fairly despicable, as it prays on the emotions of family members. A con artist claiming to be with the Red Cross will call a parent of a servicemember or their spouse, telling them their loved one has been injured and they need their social security number to authorize help for them. In some cases, they ask for an initial cash payment. Military members need to clear any report of injury through the chain of command or by contacting the base family community services.

Q. It seems that our military is very young, what is the average age of a service member and do they receive any kind of personal finance education as part of their training?

ELLIE: Yes, they are young, in fact, the average age range of military members is between 22 and 28 years old. Of the groups I routinely speak to around the world, I’d say that the average 22 year old has an even younger wife and a baby as well—so it’s a lot of responsibility for someone so young. The good news is that since 2004, service members learn about personal finance as part of their early training. When I go to give my “Heroes at Home” message I teach about finances and also encourage them to use the resources they have available to them on base. Army Community Services, Airman and Family Readiness Centers, Fleet and Family Support Centers—all of these have personal finance counselors there who are ready and willing to give free financial counseling to service members and their families. It’s what I call my $300 tip, because a couple hours with the caliber of financial professional at any of these centers is equivalent to paying $300 to a CFP or CPA.

Ellie Kay
America’s Family Financial Expert (R)
http://www.elliekay.com/

Job Interviews for Millennials

Back in May, I wrote a blog called (Un)Common Interview Questions, which talked about those questions that potential employers ask to find unique answers from their interviewee. Now is the time to get back to job interview basics. This time of year, children are going back to school and many are looking for part-time jobs to add extra income on top of schoolwork. If your teenaged or college-aged child is going for an interview, it is always great to review the basics before you walk into your (hopefully) potential employers office.

There’s an old saying we need to teach our kids: You never get a second chance to make a first impression. It’s important to dress to fit the job. If you child is applying for a summer job as a bank teller, they need to wear nice business clothes. If they’re applying at Peter Piper’s Pizza, they don’t need to wear a suit. They will need to bring a resume that lists their past jobs or experience. They should include addresses, phone numbers and the supervisor’s names. They should also have a couple of references with all the information listed. Here are a few quick tips for your child to keep in mind when they interview.

¨     Be Prepared – Your teen needs to be able to answer all questions about themselves and their interests. The answers should be short and concise.

¨     Homework – If possible, research the business to learn as much about the prospective employer as possible.

¨     Timely – Be on time. If the car ran over your cat and you have to run to the vet, which makes you late, then call the interviewer who is waiting for you. Leave early enough to compensate for these possible delays.

¨     Listen – Teach your child to never interrupt and have them practice with you! Listen to the interviewer’s name and repeat it if possible. Now is not the time to tell jokes or give additional information other than the questions that are being asked. Making eye contact while you listen is important, and it shows they’re listening.

¨     Money – Your child needs to know that the employer should bring up the topic of salary or the hourly wage. Any interviewer with at least two interviews to their credit knows that money is an important topic and they will get to it eventually.

¨     Watch Your Ps and Qs – Kids need to know that little things matter—especially in a job interview. They should never use slang or make uncomplimentary comments about other people. The handshake should be initiated by the interviewer, and they should never accept refreshments unless the interviewer is taking refreshment as well. Tell them to sit up straight in the chair and never comb their hair, file their nails, play with their nose rings or study their tattoos during an interview. Impression is everything.

¨     Ask Questions – Teach your child to listen so carefully that they can ask intelligent questions. Practice some questions they may want to ask, but tell them not to overdo this. A couple of insightful questions helps to clarify the job while giving a generally favorable impression.

¨     Fond Farewells – When they leave the interview, they need to graciously thank the interviewer for their time. Your child could lose the job in the last few minutes of the interview if they let their guard down for a minute. Make eye contact as you say goodbye and keep a positive attitude—even if the job offer is not made on the spot.

¨     Follow-up – The job offer is usually made within one to two weeks after the interview if there are several people being considered for the job. Teach your child to wait for this length of time before they call to check on the progress of the hiring process. In the meantime, they can send a thank you note to the interviewer, which is a gracious gesture that doesn’t appear overly anxious.

¨     Persevere – Practice makes perfect and the more job interviews your child has, the better they will become as they gain experience.  Don’t let a “no” to a certain job opportunity discourage your child, but teach them that God could have an even better job waiting right around the corner. But they’ll never find it unless they persevere. If your child is waiting to find the right job, encourage him to create a profile on http://Linkedin.com/ to start building his resume. It also lists unique job and internship opportunities in your area. Another great website to search for jobs in your area (and to post your resume) is http://indeed.com/

Ellie Kay

America’s Family Financial Expert (R)

Career Choices for Teens and Beyond

Career Choices

My husband always said that “flying jets beats working for a living.”  But he didn’t start out flying fighters, he had to develop a good work ethic as a teen. He washed airplanes at the Van Nuys airport, dug ditches and he managed to get good grades in high school that earned him the privilege of going to the Air Force Academy.

Part of getting ready to go to college or launch into a career involves finding a good job. Many high school students want part-time jobs. Often these part-time jobs help finance their college and can become stepping-stones which lead to lifetime careers. For this reason, high school part-time jobs are to be taken as seriously as an adult’s profession.

  • Where do I begin? – Looking for work means looking—profound, huh? Here are a few places to start:
  1. Referral – There are decided advantages to a job referral by someone who is in the company. You might hear about a position before it is advertised through the idea of a referral. Ask people that you respect for a referral within their company. If they are respected, you can benefit from their recommendation.
  2. Help Wanted – Pursue help wanted ads in your local newspaper if your personal connections fail.
  3. Employment Agency – Go through a state or private employment agency to open other options
  4. Door-to-Door – One last area that should not be overlooked is to go from business to business to ask if there are any job openings.  Warning, make sure you look the part before you knock on that first door!
  • Developing Confidence – Oftentimes a young person is lacking in confidence, but parents can help them overcome this insecurity by helping them to see areas in which they have experience and skills.  Sometimes kids ask, “How can I gain experience if I don’t have the job?”

Well, your kids do have experience, even if it isn’t the specific job experience they think they need. There are plenty of other skills that are a good compensation for work experience. Here are a few questions from Larry Burkett’s excellent resource entitled Get A Grip On Your Money—Student Text (order at http://crown.org/) to go over with your teen. Ask your teen the following questions and discuss the answers to help them gain confidence in applying for a specific job. Then help them go through the job wanted ads to get an idea of how their answers can place them in a specific job.

  1. What skills has your life at home taught you which might be helpful in serving others?
    1. Do you have younger siblings? This could prepare you to do child-care.
    2. What about lawn care, being a farmer’s helper, wood cutting, snow removal, house cleaning (spring or fall), or painting or papering?
    3. What academic skills have you developed?
      1. Are you good in math, English or other subjects? If you are, you might be a good tutor to a lower-grade student or a teacher’s aide.
      2. What skills have you learned in school such as typing, computer skills, filing, shop classes automotive mechanics, sewing or cooking? These are all marketable skills.
      3. What skills and personal qualities have you developed in outside of

school activities such as athletics or clubs?

  • Following Up on an Ad – If your child decides to answer a want-ad placed by an employer they should read it carefully and do as the ad instructs. If it says they need to present a resume, apply in person, or talk to a specific person, then they need to follow those instructions.  That way, the first impression on the employer will be a good one.
  • Telephone Follow Up – Practice phone etiquette with your child before they make the call. Pretend you’re the employer and they are trying to get an interview. Ask for the person specified in the ad, say please and thank you and speak clearly. If the person is not available, ask when they will be back and call at the specified time. Teach your child to identify themselves by saying something like, “Hi, I’m Ellie Kay and I am calling in reference to your ad about writing financial humor books.” Have a pencil and paper by the phone and write down instructions. Tell them to ask questions to make sure they understand and never, ever ask about salary or pay in the initial contact.

What is your dream career?

Ellie Kay

America’s Family Financial Expert (R)

(Un)Common Interview Questions

 

With graduations upon us, it’s a natural time to start preparing for job interviews.  At 7.5%, the unemployment rate is at its lowest level since 2008, so opportunities are out there. In the Kay household, our kids were naturally prepared for grilling questions thanks to our habit of asking them about their day every evening at dinner.

“What was something good about your day?”

“What did you do at school?”

“What was the best part of your day?”

They were obviously more forthcoming some days than others, but the habit made it more natural for them to talk about their experiences. This easily translates to job interviews, where prospective employers ask both conventional and unconventional questions.

You have probably already heard about the most common questions, such as ones pertaining to your history, why you’re interested and your strengths and weaknesses. But every now and then, you’ll get a common question disguised as an uncommon one. Here are five of them:

1. “What was your best MacGyver moment?”

When an interviewer asks a question similar to this, they’re really looking for examples of your adaptability and resourcefulness. Have you ever had any unconventional homework assignments or projects where you didn’t have common resources? This is a good time to talk about them.

2. “How many employees does it take to screw in a light bulb?”

This is a unique way to see where you stand on being a team player and if you have problem-solving skills. Most careers have a fair amount of group projects, so interviewers want to see if you’re a lone wolf (“Just one. Me.”) or if you can work with others (“As many as it takes to do it efficiently.”)

3. “What is our receptionist’s name?”

This could also be a question about something or someone else in the building. The interviewer is looking to see if you’re observant, paying attention and have a good memory. Just be aware of your surroundings and you’ll be prepared for this question.

4. “If you were in the NBA, what position would you play?”

Believe it or not, you don’t have to follow sports to answer this question correctly. The interviewer simply wants to know if you’re a leader or team player and ready to contribute immediately. Focus on answers that show off your willingness to do anything for the team/company.

5. “If you could have dinner with anyone in history, who would it be?”

This is a good opportunity to talk about a variety of things, from your hobbies to who you value. It can be a current or past figure, but should be someone you truly admire. This is a great way for you to relate to the interviewer and ease any tension or awkwardness.

Again, these specific questions are rare, but if you’re prepared to talk about things like your resourcefulness, leadership abilities and interests, you’ll be ready to answer them. A good starting point would be to look at lists of the most common questions and rephrasing them in a unique way. It can be fun and a great way to prepare for your first job interview.

What are some of YOUR favorite interview questions? Be sure to send this blog to your favorite college grad who might be looking for that dream job (or any job).

Ellie Kay

America’s Family Financial Expert (R)

Job Scams and Homebased Businesses

 

I was on the ABC NEWS “Good Money” show, and answered your questions! Be sure to email us for a FREE “Homebased Business File” and mention you heard me on “Good Money!”

Q. We are interested in starting our own home business and want to know what first steps we should take in deciding what kind of business to operate from home.
Julie and Vick from Rancho Cucomonga, CA via facebook

ELLIE: There are basically three kinds of businesses: sales, service and manufacturing. Sales can take many forms such as retail or wholesale, mail order or direct sales. They tend to offer more flexible hours but require more paperwork. Service businesses are the easiest to set up and can require the smallest initial investment. If you do something well, like painting or decorating, fixing things, cleaning houses repairing computers, etc, you can start your own service business. Finally, there is manufacturing—everything from crafts to jewelry, furniture and more. Once you decide on the kind of business, do your research online or with the help of a research librarian, subscribe to industry magazines and talk to those in that kind of business.

Q. Are there any online resources available for us to find someone who will give us free advice on our small graphics and design business.
Mike and Victoria from Syracuse, NY via online contact form

ELLIE: Yes! You can go to SCORE.org, which is non-profit organization designed to help small business owners with over 12,000 volunteer counselors across the country. They can hook you up with a mentor to answer your questions online or in one of their offices. Their volunteers are made of experts in 600 fields who have been successful in their own businesses and include former CEOs! If you are interested in funding your startup business you can go to Kickstarter.com or since you’re an artist you may want to find funding for your project by going to IndieGoGo.com

Q: I’ve worked for the same construction company for 20 years and just got laid off. I have a dream to start my own carpentry business, but I’m not sure that I have what it takes to do it. How do I know if I can hack it or not?
Mark submitted via Online Contact Form

ELLIE: That’s a great question, Mark, and since the SBA says that 1 in 2 small businesses will fail within a year, you have every right to question your ability to succeed. I think the key lies in planning and doing your preparation work. It’s important and assess your personality and skills. You can take the Personality ID test offered at your SBA center, college, library or community center. It will help you look at yourself from a fresh perspective and asses whether your personality is best served as an owner or an employee. I also think it’s important to pursue your passion. Do you really love carpentry or has it just been a job to you? When you pursue your passion, not only does it get you up in the morning but it makes more likely to succeed!

Q. My mom sells Premier Jewelry and my best friend sells Mary Kay. Both of them are pressuring me to sign up under them in order to build their business. How do I make the decision about which homebased business to start.
Jenny Monroe from Oklahoma City, OK

ELLIE: Jenny, there’s a phrase you need to learn right away: It’s nothing personal, just business! You need to make your decision based on what is right for YOU, not based on who you love more: your mom or your friend! I’ll send you the Homebased Business file for free if you go to elliekay.com and in that file you’ll see 25 questions you need to ask each woman about their business including: What are the start up costs? What is the hostess plan? Does the company pay sales tax or do I have to do that myself? How many downline generations are paid? How much inventory is needed? It’s important to have all the facts available and then make your decision based on business and not on anything personal!

Q. I’ve dabbled in writing here and there but I want to try and go into it on a more full time basis, should I try to freelance various writing projects or should I offer my writing services as a subcontractor to an existing company that need writers?
Ted from Chicago, VA via Ellie Kay’s blog

ELLIE: The answer is “yes.” It’s easier to launch a service based industry, such as what you’re essentially talking about by subcontracting work to an existing firm. Outsourcing is becoming more and more prominent as jobs are streamlined and companies downsize. It’s cheaper to hire a contractor than paying benefits to a full time employee. So hook up with your local Chamber of Commerce and plug into businesses in your community. At the same time, get The Writers Guide online or from your local library and begin to pitch articles to various periodicals by writing a good query letter and tailoring each article toward the specific needs of the publication. Ted, with how work and bit of luck you’ll find yourself doing what you love and having your dream business at the same time!

Ellie Kay
America’s Family Financial Expert (R)
www.elliekay.com

College Debt – Ellie Answers Your Questions!


One of Yahoo’s most popular videos was yours truly on ABC NEWS NOW earlier this month answering your questions about college grads as well as debt!

Here’s the scoop:

Q. Our daughter just graduated from UCLA and we’re very proud of her. But even though she has a prestigious degree, she still hasn’t been able to locate work. Should we allow her to move in with us until she finds employment?

Bill and Carol from Quartz Hills, CA via facebook
Ellie: This is a tough one! As a mom of kids in this age group, I know it’s a fine line between enabling and empowering and it’s definitely one of those individual decisions. What may be right for a particular child may not be right for another one. I think you ought to support her emotionally and psychologically, letting her know you believe in her. You can also offer to help with resumes or job research. But I would make the offer to have her move in with you as a last resort only. Furthermore, if she does move in with you, it’s important to sit down ahead of time, come up with a responsibility/income agreement and have both parties subscribe to the guidelines.

Q. My husband and I have a son who graduated last year and could not find work, so he moved in with us until he could find employment. He found a modest job, and is not making very much money. He decided that continuing to live with us would be a better financial option than paying rent on a limited income. I love my son, and he’s only 23 right now, but I’m afraid of a “Failure to Launch” syndrome and I need to know what you would advise me to do.

Allana from Lancaster, PA via online contact form
ELLIE: OK, the Failure to Launch syndrome, it’s every parent’s nightmare. We finally have an empty nest, then boomerang children come back to inhabit a place where they no longer naturally fit. I think, Allana, that it is imperative that you and your husband develop an comprehensive exit strategy for junior. Make sure this plan requires that he pays room and board with you, that he develop a clear budget and make himself accountable to you (while he’s living at home) and then be clear about D-day. The day he will depart. Be loving but firm. Remember that the decisions you are implementing with him today will be the precedence you set for tomorrow. You and you alone, enable the boomerang effect, yet you also have the power to put a stop to that boomerang before it’s ever launched. Then you won’t have a “Failure to Launch.”
Q: I am a 26 year old single girl with a bachelor’s degree but not yet a Master’s. I am working with children in a library setting currently and am considering various Master’s programs. (Library Science included). I would have to take out loans for the program though, and I am not sure that taking on that debt would be a wise thing, even though it would lead to a professional job. What is your advice for women around my age who eventually want to marry and have a family and do not want the burden of school debt? I have read some of your books and very much appreciate your insights and time.

Jen Crouse submitted via Online Contact Form
Ellie: It’s admirable that you desire to go back to college for a master’s while you are still in your twenties and your work with children sounds very gratifying. Ellie usually recommends no more than 10K in student loan debt for any program (bachelors or masters). Instead, you could look into some of the following:
Step 1
Apply for a scholarship.
There are merit based graduate school scholarships out there so go to www.salliemae.com which lists almost 2 million scholarships. Talk to the admissions office at the college or university at which you’d like to apply. They can give you advice on applying for their own scholarships (if they have them) or point you to the appropriate federal and/or state scholarship programs.
Step 2
Look into a fellowship or assistantship
. Many colleges and universities offer programs that enable you to get a master’s degree while doing research or assisting professors in the department in which you wish to study. This is a viable option that also enhances your hands-on experience in your chosen field.
Step 3
Talk to your employer.
Many employers are willing to foot the bill for a master’s degree, especially an MBA (Master of Business Administration). Talk to someone in your company’s Human Resources department to get more information. Or another option is to talk to a military recruiter to join the guard or reserves. The Army, Air Force and Navy will pay up to $65,000 in student loan debts if you qualify for the program.

Q. My husband and I want to help with our son’s college expenses (he graduates in two years) and we don’t want him to be straddled with huge student loans. Several of our friends and other family members have said, “Just take out a second mortgage or use the equity in your home to pay for college.” What do you think about that?

McKenzie Thomas from Stanford, CA
Ellie: I believe that you should never borrow on your own future to pay for your child’s future. In any discussion of college costs, it’s important to keep priorities straight. Your kid’s education shouldn’t cost you your retirement. This means it’s not a wise idea to take out a home equity loan, an equity line of credit or refinance your mortgage in order to pay for school. This would reduce the amount of equity in your home, increase the risk of possible foreclosure and incur costs in interest charges that may cost more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

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Q. My son-in-law just graduated with his Masters Degree in Education. They have had a hard time while he’s been in school and don’t have the best credit scores. They’ve asked us to co-sign on a new automobile loan and we are reluctant. What do you think about co-signing for loans?

Amanda from Wichita, KS via Ellie Kay’s blog
Ellie: Since you son-in-law needs a co-signer, it means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Daniel, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Ellie Kay

America’s Family Financial Expert (R)

ABC NEWS – I’m Answering YOUR Questions

Here are some of your questions that I answered recently on ABC NEWS “Good Money” regarding the blog I wrote called “The Road to Financial Heckie Fire.”

Q. I’m in my mid thirties and I haven’t had the problem of friends and family asking me to co-sign on a loan before. But in the last year, I’ve had three requests for this. What’s your advice on co-signing a loan?
Jill, from Bradenton, FL via facebook

Ellie: If you have a friend or relative who needs a co-signer, then that means their credit is so risky that no lender will give him money on his own credit history. The question is: why should you? The answer is that you should not! Even though it may come across as “helping a family member out” it’s still a business transaction and when you set the precedence of co-signing on a loan—be prepared to do it again and again. If not for the same person, then for another friend who may say, “well, you did it for Jennifer, why not me?” You have to assume you will be the one repaying the loan & you won’t have the associated asset, so it can’t possibly be a good business move.

Q. We are boomers in our early sixties and we were thinking of getting a reverse mortgage. Is this a good move for people our age?
Allison from Granbury, TX via online contact form

Ellie: Recently, you’ll see older actors on commercials offering these kinds of mortgages to seniors who are house rich and cash poor. They are portrayed as a viable means of getting a steady stream of income that is easy to obtain. But the fees and other costs associated with reverse mortgages can sometimes be considerably higher than on other loans. This is a bad money move unless you have no other income than social security and because of the high cost fees, it should be a last resort not a first resort. The better option would be a home equity loan. You could sell your home and move into a smaller, less expensive house. Or, you could sell the home to your kids and have a multigenerational family under one roof—this is a recent trend I’ve seen emerging. Your kids can use the inheritance to pay down the mortgage.

Q. I have $10,000 in Stafford Student Loans, an $8800 car loan at 9.99% and two consumer loans at $3500 and $3700, both at 12%. All my loans are current and I have $1000 to put toward one of these loans—which one should I choose?
Viviene via Ellie Kay’s blog

Ellie: It’s great that you are current with your payments and even better that you have an extra $1000 to put toward your debts. I recommend that you put the $1000 toward the $3700 loan at 12% in order to retire the loan. Then once you’ve paid off that debt, double up the payments on the $3500 loan. You will feel motivated by the fact that you’re paying off debts and you will also experience the “snowball effect” where you gain momentum in paying these debts and as you pay off one bill, you can put those monies toward the next bill. Before you know it, you’ll have all your debt retired!
Q. Last year, my teenage daughter couldn’t find a summer job and ended up kind of wasting those months. She tried hard, but there just isn’t much work where we live. Do you have some ideas that maybe we haven’t thought of in terms of summers for this age group?
Stephanie Corlew from Branson, Missouri
Ellie: Summer camps are a great place for kids like your daughter to plug into a summer job. My daughter, Bethany, found a job through the American Camping Association by going to www.acacamps.org/jobs (or just google “American Camping Association” and “jobs.”) She’s making enough for her college spending money and gaining the opportunity to impact the lives of young campers as well.
Another way to broaden a resume for this age group is to go to the local, state or federal political representative from your district and offer to intern in the office. My son, Jonathan, did this last summer as a high school sophomore and this summer as a junior as well. He only volunteered a few hours a week at Congressman Buck McKeon’s office (California) and it made such an impression on his resume that it helped him get into an exclusive summer leadership seminar at USAFA (United States Air Force Academy). His summer internship contributed to the community and it also has contributed to his future as he applies for college scholarships.

Q. My grandchildren are teenagers and are coming to live with me for the summer. I wanted to know if you know of some jobs they can do where they could make some extra money, but still have time for fun, too.
Connie Green from Tehachapi, CA

Ellie: Connie, if you email assistant@elliekay.com, we can send you a file that includes 30 different jobs your grandchildren can do locally and make good money as well. Just ask for the “Kids Jobs” file. There’s also a list of safety items you should check out before they work for someone they do not know. For example, there’s job’s like Rent-A-Kid where there may be people in your church or neighborhood who need odd jobs done. There are also jobs like window washing, Garage Cleaning Service, Babysitting Services for summer groups that meet, Mail Checkers (for those who travel out of town), and even Pet Minders.

Q. Ever since I was a teenager, it’s been a dream of mine to go visit Israel
Is going on a tour with a large group the least expensive way to go to big tourist destinations? How can I save money on this trip?
Pamela from Acton, CA

Ellie: Tour groups with your church or community may not be the cheapest route to go since someone usually gets a free trip or two by booking a large group. In some cases, you actually pay more money to go to Israel with a reknown author or professor than you would if you go on your own. To help save money, go to the website GoIsrael.com and do as much planning as possible. Stay in a hostel, guest house, or a kibbutz, which comes with a free breakfast. Buy a pass for all national parks in order to save as much as 35% on the most popular attractions.

Q: Our company downsized and I laid off work. I’m thinking of launching my own homebased business, but there’s so much out there, I’m not sure what I should do. How do you know it’s a good business to get into and what should I keep in mind as I make my decision?
Nicole, Albany, NY
Ellie: One area of our economy that is thriving is direct sales companies (DSC) as people explore new ways to make money. As you are searching for the best fit for you in your homebased business start with following your passion. Do you love to cook? Then Pampered Chef may be a good option. Do you enjoy wearing the latest styles in jewelry, then try Premier Designs. If you follow your passion you are far more likely to succeed. But all DSCs are not created equal. Before you decide, find out what kind of inventory you have to stock. I know far too many people who went into debt to buy their inventory and then quit the business within a year—but kept the debt! Also find out the percentage you make on sales as well as the hostess plan that the company offers. Does the company take care of filing sales tax for you or do you have that job, too? For more information, email assistant@elliekay.com and ask for the “Homemade Business” file. Have fun pursuing your passion!
Please ask me YOUR questions!
Ellie Kay
America’s Family Financial Expert (R)

ABC News Now – When Two Incomes Becomes One

I just love my bloggers, FB friends & eblast recipients! Once again, you guys helped make the latest segments on ABC NEWS NOW really great!

You can view the first segment and then be sure to view the questions and answers, where YOU had your questions answered on the air and WON a copy of Little Book of Big Savings!

Here’s part of the transcript
1) ELLIE, 9.7 PERCENT UNEMPLOYMENT IS HUGE– WHAT KIND OF PROBLEMS ARE YOU SEEING AS A RESULT OF THESE NUMBERS?
ELLIE: I think these numbers only indicate part of the problem. For every person we have who is unemployed we have others who have taken pay cuts to keep their jobs or they’ve had to accept a position significantly below what they had before. Even when the recession ends and we are in recovery, I think we’re going to see the contagion effect of unemployment and underemployment.

2) MOST PEOPLE PANIC WHEN THEY ARE NOTIFIED THAT THEY WILL BE LAID OFF. WHAT IS THE FIRST THING A COUPLE SHOULD DO IF ONE OF THEM BECOMES SUDDENLY UNEMPLOYED?
ELLIE: Step one is to “Review and Re-evaluate your Financial Goals.” When you go from two paychecks to one, all of the sudden money for your four year old’s college fund and/or funding retirement isn’t as important as making the house payment. It’s time to radically re-evaluate what needs to get paid to survive. Essentially, you will work backwards. Determine what you need for the end of each month to cover the basics (house, car, insurance, credit card bills, food, etc) and then work backward toward that financial goal.

3) ONCE YOU’VE WORKED THAT OUT, WHAT IS THE SECOND THING COUPLES SHOULD DO?
ELLIE: Establish a “One Income Budget.” This will, hopefully, be temporary, but you will need to readjust how money is spent until your spouse is employed again. This will include cutting back on expenses where you can. But don’t panic. Before you cut the cable or disconnect the internet, look at ways to cut back that are less painful and more productive.

4) YOU HAVE SOME TIPS ON HOW TO DO THAT..LET’S START WITH HOMEOWNERS INSURANCE:
ELLIE: Call the company and let them know you think you are paying too much & that you can get coverage cheaper elsewhere. It’s amazing how motivated they’ll be to help you reduce costs. You can raise deductibles to cover the big things and then lower those again when your spouse is employed. My literary agent took this tip to heart and discovered he had an old policy that had been grandfathered in, when they updated it, he saved $475!

4B) HOW CAN CONSUMERS CUT BACK ON AUTO INSURANCE NOW THAT THEY AREN’T DRIVING TO AND FROM WORK?
ELLIE: It costs less to insure a car that is no longer driven to and from work. Go to http://www.progressive.com/ to get comparison quotes on your auto insurance, then call your provider and ask for all the discounts that are available to you. Most clients I’ve worked with save an average of $350.

4C) THIS NEXT TIP CAN SAVE YOU AS MUCH AS FOUR THOUSAND DOLLARS PER YEAR… CLIPPING COUPONS?
ELLIE: Whether you live on one income or two, you still have to buy food. By taking ten minutes to go to http://www.couponmom.com/ before you shop, you can save as much as $4,000 per year. The site does most of the work for you as it tells you what is on sale, what manufacturer’s coupons are available, what other store coupons are offered and the final price of what you’ll pay. There are dozens of items each week that cost only pennies or are free.

5) IS THERE ANYTHING ELSE FAMILIES THAT ARE UNEMPLOYED OR UNDEREMPLOYED SHOULD DO DURING THOSE ONE INCOME SEASONS?
ELLIE: Proactively Plan for Your Financial Future. Just because you’re unemployed does not mean you should enter the panic mode-this can lead to poor financial decisions. Go get help at the National Consumer Credit Counseling service (nfcc.org) which is a non-profit that won’t make you accrue more debt as the “for profit” counseling services will do. Oftentimes the nfcc knows the programs that you may qualify for in order to keep your house, renegotiate with lenders and help you proactively plan for your financial future.

Congratulations to Kristen Whirrett of Fort Wayne, IN; Ruth Schmidt of Willard, MO; Stephanie Woods of Sheperdsville, KY; Karen Power of Keller, TX; Rachel Morales of Victorville, CA and Kathy Hansen of San Diego! You guys had the questions selected by the producers of ABC NEWS NOW – GOOD MONEY show!

Ellie Kay
Americas Family Financial Expert (R)
http://www.elliekay.com/

Ellie on Neil Cavuto — Financially Pinched Companies Pinch Employees

Goodyear Tire announced that they were reinstating their 401(k) program after cancelling it in 2003. But it’s not the “good news” it appears to be because at the same time they froze more traditional pensions, thereby saving hundreds of millions of dollars at employee’s expense! So what do YOU do when your company cuts benefits–do you have a recourse?
Basically, you take charge. You don’t rely on your company to be your uncle sugar, you realize that you have to rely on other resources that are available to you. Today, I shared this on Neil Cavuto
1) TAKE ADVANTAGE WHILE YOU CAN: Invest in your 401(k) if/when it comes back into play. Companies are reinstating formerly suspended 401(k) plans. These may come back for six months, a year or longer. TAKE ADVANTAGE OF THE MATCHING PORTION up to the the % the company allows (usually 4% or 5%). Even if they are only matching 25%, that’s a much better percentage than what you can make on your money in today’s market.
2) TAKE MATTERS INTO YOUR OWN HANDS: One of the things that companies are doing is kind of a bait and switch tactic. For example, they may be reinstating 401(k)s but they are coming in the back door and cutting pension programs that are far more costly. It used to be that you could cound on social security and your pension to retire, but that is no longer true during a recession. Therefore, you need to fund your own retirement through Roth or Regular IRAs or even a SEP IRA (Simplified Employee Pension) if you or your spouse own a small homebased business. Max out the amount you contribute to your IRA based on your age (up to $5,000 for a traditional IRA or $6,000 if you are over 50) and don’t trust your company to fund your retirement.
3) TAKE CARE OF YOUR OWN HEALTHCARE: Just about the time we find out that healthcare costs are rising 7% to 8%, we also find out that more and more companies are cutting healthcare benefits. Yesterday was the time to check into a high deductible individual or family plan with an HSA (Health Savings Account). For example, if you’re an individual and have a $2900 deductible on your health insurance, you can tuck up to $2900 into a tax favored HSA account. If you’re a family you can contribute up to $5800 per year. These tax favored funds are not the old fashioned “use it or lose it” rather they are your funds that will be rolled over from year to year and can eventually be used at retirement. Premiums for this high deductible plans are about half what a costly group plan can cost you and your family, so now is the time to have that safety net of covering the big medical expenses while not trusting your employer to be there for you when it comes to healthcare.
4) TAKE IT TO THE TOP & BE THE TOP: Employers still want to attract and keep the best talent. Show them you are not the weak link and make yourself indispensable. Go the extra mile, do quality work, bring in business, get along with your peers, support your boss and make sure that YOU are the talent they want to keep.
5) TAKE THE HIGH ROAD: If you are in the position of having to accept a severance package realize that you can still negotiate it. You can often test the wiggle room to get a higher amount and you can determine whether you take a lump sum or a longer payout. You also need to be sure to negotiate for longer lasting health and life insurance benefits. Don’t sign any papers the day you are let go and don’t make any rash or emotional decisions. Take a breath, take your time and realize that you still have options.

Ellie Kay

America’s Family Financial Expert (R)