Matt Bell's Blog, page 25

Profitable Ideas: Broke Lottery Winners, One Money Move for a Better Marriage, and More

Weekly list of curated personal finance articles from around the web. I do the reading skimming so you don’t have to.

Why do lottery winners go broke? (Common Good). In many ways, lottery winners aren’t so different from you or me. 

Ellary’s bake sale: how I’m learning from my generous child (National Christian Foundation). Great lessons on letting go when our kids want to be (overly) generous.

The real cost of what we buy (Becoming Minimalist). “We’re not just buying things with our money; we’re making decisions about what we value most.”

How your new car tracks you (Wired). Basically, our cars have become “smartphones on wheels.”

Four questions to ask before giving your child a phone (The Gospel Coalition). I also recommend using a contract. You’ll find the one we’ve used with our kids in the resources section of my site.

How to prioritize your spending (The Evidence-Based Investor). Budgeting isn’t about limiting spending, it’s about prioritizing spending.

The little-known way parents are beating college tuition hikes (Wall Street Journal). Reports of their death have been greatly exaggerated. Pre-paid tuition plans live, and many parents have found that they work really well.

Does merging finances lead to marital bliss or disaster? (Psychology Today). The culture is going one way on this topic while research and the wise go another.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Fostering Within Our Kids a Heart for Wise Money Management

Helping our kids become wise money managers involves more than simply teaching them what to do. If we want the lessons to stick, we have to get their hearts involved.

“Guard your heart for it is the wellspring of life.” – Proverbs 4:23

So many of the messages of our consumer culture are aimed squarely at the heart—at our identity, our sense of self-worth, and our hope for happiness. And those messages are aimed at our kids’ hearts as well.

What’s a parent to do? Fill our kids’ hearts with the Truth of God’s Word. 

“Fix these words of mine in your hearts and minds.” – Deuteronomy 11:18

As soon as your kids are able to memorize Scripture, I strongly encourage you to work in some essential verses about money. Here’s a key verse for each of the main financial topics.

Earning

“Whatever you do, work at it with all your heart, as working for the Lord, not for human masters.” – Colossians 3:23

Planning

“The plans of the diligent lead to profit as surely as haste leads to poverty.” – Proverbs 21:5

Giving

“Honor the Lord with your possessions, and with the firstfruits of all your increase.” – Proverbs 3:9, NKJV

Saving

“The wise store up choice food and olive oil, but fools gulp theirs down.” – Proverbs 21:20

Investing

“Steady plodding brings prosperity; hasty speculation brings poverty.” – Proverbs 21:5, TLB

Borrowing

“The rich rule over the poor, and the borrower is slave to the lender.” – Proverbs 22:7

Spending

“Whoever can be trusted with very little can also be trusted with much.” – Luke 16:10

Being

“See what great love the Father has lavished on us, that we should be called children of God!” – 1 John 3:1

That last one—making sure our kids know who they are—is the most important money management lesson of all. Our kids are not the brand of clothing they wear or the type of car they will one day drive. No matter what logo is on their clothing or where we can afford to take them on vacation, if they have placed their faith in Christ, they are children of God—fully loved, fully valued just as they are.

The rhythms of life

You don’t need to set up a chalkboard and hold classroom lessons on these verses. Just work them into the natural rhythms of your family’s life. 

Maybe you’re teaching your two-year-old how to help with the laundry, showing him how to match socks of the same color. In the evening, as you’re getting him ready for bed, tell him what a good job he did and how that must surely please God. Then read him Colossians 3:23.

Or maybe you’re introducing your 12-year-old to investing. As you teach her about the stock market and show her how it moves up and down over time, tell her that the best approach to investing is a long-term approach. Then read her Proverbs 21:5 from The Living Bible.

No vacancy

If our kids’ hearts are filled to the brim with the Truth of God’s Word, there will be no room for the lies of the culture. They’ll know who they are: stewards or managers of God’s resources, wise builders. And as they stop to consider how a manager of God’s resources would make all manner of financial decisions, they will have a clear biblical framework to draw from.

For more guidance on teaching your kids about money, pick up copy of my new book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management.

Profitable Ideas: Thinking of Future You, The Abstraction of Money, and More

Weekly roundup of recommended personal finance articles from around the web.

The key to making good financial decisions—connecting with your “future self” (Forbes). If we could get even a little bit better at thinking ahead, we would make all manner of decisions, including financial decisions, better.

Swimming pools make you happy (Klement on Investing). Spending well isn’t just about choosing between things and experiences. Some things foster wonderful experiences.

Here’s how much money Americans think they need to retire comfortably (CBS Money Watch). It’s pretty hard to deny that a lot of people really should be setting aside more for the future.

Dying without a will creates confusion and jeopardizes your family (Marriage, Kids, and Money). It seems like boring and unpleasant paperwork, but getting it in order is an act of love.

Biblical financial principles and 5 practical steps to live by them (Christian Stewardship Network). Using biblical principles in managing money isn’t all that difficult and it’s so beneficial. Which of these practical steps should you take next?

How today’s teens get more financial firepower than past generations (Wall Street Journal). Fintech has made managing money easier and cooler than ever, but it has also made money more abstract. Parental involvement highly recommended!

Expert says too many Americans are cashing out their 401(k) plans (Yahoo Finance). Especially if your balance is low, it’s tempting to think that it’s no big deal to cash out, but it is. Far better to roll the money into an IRA.

How your attention is auctioned off to advertisers (The Markup). Part of navigating life in our consumer culture involves understanding how advertising works today. 

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Raising Good Stewards in the Age of Social Media

Helping our kids learn how to think about and use money in God-glorifying ways involves much more than teaching them about earning, planning, giving, saving, investing, borrowing, and spending. It involves helping them learn how to navigate our consumer culture—how to live in it without becoming of it. Central to that is making sure they know who they are. They are stewards, managers, wise builders (Matthew 7:24-27)—not consumers.

As I’ve written before, the worldview of a consumer is completely at odds with that of a wise builder: 

Consumers put themselves first. Life is about their pleasure, their comfort, their happiness. Wise builders put God first. Consumers believe that money and things bring happiness. Wise builders know that relationships bring joy. And consumers believe life is about competition; it’s a quest for more. Wise builders know that life is about contribution; it’s an opportunity to use their gifts, talents, and passions to make a God-glorifying difference with their life. 

These two worldviews lead to two very different approaches to money and material things. 

The task has gotten tougher

Today, it has become more difficult than ever to live as wise builders and not consumers. It used to be that the primary influence pulling all of us, not just our kids, toward a consumer identity was “the media.” While that’s generally still true, social media is today’s 800-pound media gorilla. 

Platforms such as TikTok, Instagram, Snapchat, Facebook (if any young people are still using that one!), and others have greatly amplified the consumerist messages “You don’t have enough” and “You’re not enough.” And it’s leading to far worse outcomes than too much shopping and spending.

Earlier this year U.S. Surgeon General Dr. Vivek Murthy issued a report, Social Media and Youth Mental Health, that shows how widely adopted social media has become, highlights some of its dangers, and makes some recommendations for parents.

But mom, all my friends have it

The report describes social media use among today’s youth as “nearly universal.” Some 95% of young people ages 13-17 say they use social media—more than a third “almost constantly.” Although most social media platforms say they require users to be at least 13, nearly 40% of children ages 8-12 use social media.

What’s the problem?

While the report acknowledged several benefits of social media, it also said, “there are ample indicators that social media can have a profound risk of harm to the mental health and well-being of children and adolescents.”

The report noted that from ages 10 to 19 is a crucial period of brain development. It’s a time when well-being experiences the greatest fluctuations and mental health challenges such as depression typically emerge. Early adolescence is when young people’s sense of self-worth is forming, which makes them especially sensitive to peer pressure and peer comparisons—the currency of social media. 

The report described social media use as “predictive” of decreased life satisfaction for girls 11-13 years old and boys 14-15 years old. It found that “adolescents who spent more than 3 hours per day on social media faced double the risk of experiencing poor mental health outcomes including symptoms of depression and anxiety.” 

It referenced a study of 14-year-olds that found greater social media use predicted poor body image, low self-esteem, and again, higher incidence of depression. Other studies have also linked the use of social media to self-harm.

What’s a parent to do?

The Surgeon General’s report included several recommendations for parents, including:

Create a family media plan in which expectations and boundaries are agreed upon. I would take this a step further and use an electronic device contract. On my website, you’ll see the one we have used with our three kids. In drafting it, I drew from various other contracts I found online and then tailored it to my wife’s and my convictions. Feel free to tailor it further to fit yours. 

Create tech-free zones. In our household, the dining room and bathrooms are tech-free zones. Also, our kids are not allowed to keep electronic devices in their bedrooms. They can use them there as long as the screen is visible to others, but they cannot keep them there.

Teach kids about technology. If your kids are 12 or older, I recommend watching the documentary The Social Dilemma with them and then discussing their take-aways. It’s one thing for our kids to hear some warnings about social media from us. It’s something altogether different to hear warnings from people who once worked for some of the biggest social media platforms.

Model responsible social media behavior. This may be the most challenging recommendation for many parents! But our kids need to see us not bringing our phones to the dinner table, not spending undue time scrolling through social media, and shutting things down at a reasonable time.

The wellspring of life

All of these are good ideas, and nothing will be more powerful and effective in helping our kids navigate our consumer culture than having God’s Word written on their hearts. That happens through time in the Word—reading, meditating, and memorizing God’s Word.

What if our kids’ hearts were so full of the Truth that there’s no room for the lies of our consumer culture? Next week I’ll recommend some verses for our kids to memorize.

In the meantime, for a more complete set of ideas about raising good stewards, pick up a copy of my new book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management. 

Profitable Ideas: A Tipping Backlash, Decluttering Your Finances, and More

Weekly roundup of recommended personal finance articles from around the web.

“Tipflation” may be causing tipping backlash as more digital prompts ask for tips (CBS Money Watch). That awkward moment when you’re asked for a tip in a situation that previously didn’t call for one. See also, What your barista is really thinking as you are about to tip (Wall Street Journal).

How often should I appraise a wedding ring for insurance, and who should appraise it? (Clark Howard). Something you probably haven’t thought about for a while.

How to declutter your finances (MarketWatch). Some good suggestions for bringing order to an area that can easily get messy.

Why you should check your credit report (Kiplinger). Errors are more common than you might assume.

The Bible is the story of God’s generosity: will we be part of that story? (Eternal Perspective Ministries, via FaithFi). God doesn’t need our money, but he graciously invites into His purposes. 

Paying for your children’s college education? 3 vital questions to ask (MoneyNing). Have any college-bound kids under roof? Some good starting points for planning how to cover the cost.

35 clever and unusual ways to save money (Clark Howard). There are bound to be some suggestions here that you’ll find useful.

How long should you keep tax records? (Kiplinger, via Fidelity). There’s no reason to be a tax return pack rat. Here’s where to draw the line.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Should You Tell Your Teens How Much Money You Make?

There was an interesting debate in the Wall Street Journal in which two personal finance writers squared off on the question in the headline of this post. 

In favor

Manisha Thakor, author of “On My Own Two Feet,” among other personal finance books, favors full financial disclosure—not all at once, of course, but over time and within the context of wide-ranging financial discussions about saving, spending, taxes, financial values, and more. Plus, she said, parents should be intentional about discerning when a child is capable of handling such information responsibly.

“The most vital part of this disclosure is explaining how your income figures relate to the cost of maintaining your household, so that your teen understands not just how much you make but how you manage your money. This is something that can’t be achieved nearly as well by talking in broad terms about finances without disclosing the actual figures involved.”

Thakor believes there’s a potential danger in withholding such information. “Not disclosing parental salaries…perpetuates the notion that money isn’t something to be talked about openly… Transparency—and the understanding it allows—is a key way parents can equip their teens to make smart financial decisions in the future.”

Against

Beth Kobliner, author of “Make Your Kid a Money Genius (Even if You’re Not),” said your kids are “better off not knowing” how much you make. As she explained, “without a thorough understanding of economic subtleties like the cost of living, family size and your tax burden—subtleties that teens, and especially younger children, probably can’t totally grasp yet—your salary is just an abstract number.”

In fact, Kobliner thinks sharing your salary with your kids could be harmful. “Does a big number make them feel like they should keep up with the Kardashians, with all the wild spending and borrowing that suggests? Will a lower one make them feel ashamed, especially if they think it’s below that of their peers’ parents?”

Kobliner believes your household income should be kept from your kids until their senior year of high school when they may be applying for college and financial aid.

My POV

There were no research studies cited by either author; they were simply giving their opinions. Here’s mine.

I favor sharing more than less. It’s been my experience that kids can grasp more than we sometimes think they can. Disclosing information about our household’s finances helps them understand the real world of money and tells them we trust them with that information.

I do think that context is essential, though. A salary figure without any understanding of what things cost won’t be very meaningful. I remember reading about a family that went to the bank and withdrew cash equal to their monthly income. They made sure to get the money in fairly small denominations so when they dumped it on the dining room table in front of their kids, it made quite an impression!

To the kids, it looked like all the money in the world. But then the parents started pulling out various amounts for each of their bills—food, clothing, insurance, gasoline, utilities, and on and on. That, too, made quite an impression, helping their kids see how quickly the money goes. It led to some great discussions about needs vs. wants, making trade-offs, and saving for bigger ticket items.

We haven’t done that—yet. But I think it’s an interesting idea. I’m a big believer in making things as real as possible for our kids.

Read Teaching Kids About Money By Keeping It Real

One step we’ve taken in this direction is giving our kids a monthly clothing budget that they have to manage. We may start having them pay our household bills online (with our supervision, of course), so they can get a better sense about what we spend on water, electricity, and so forth. (H/T to a reader of this blog named Karen, who told me about the great experience she and her husband had in having their daughter do this.)

Read The Absolute Best Way to Teach Kids About Money

Start a conversation

A T. Rowe Price survey of 18-to-24-year-olds found that 40% thought their parents were reluctant to talk with them about money when they were younger. One in seven said their parents never talked about money with them.

If you’re hesitant to talk with your kids about money, why? Are there aspects of your financial situation you need to clean up? Let the prospect of talking with your kids about money motivate you to take action, whether that’s about getting out of debt, building savings, or living more generously. Even if you’re not talking with your kids about money, they’re watching, listening, and learning more from you than you may realize. Let that, too, be a motivator to work on your own finances.

How much have you talked with your kids about money? Have you told them how much money you make? Why or why not?

For more guidance on teaching your kids about money, pick up a copy of my new book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management.

Profitable Ideas: Everyone Wants a Tip, Tag Those Bags, and More

Weekly roundup of recommended personal finance articles from around the web.

Those iPad screens are getting us to tip more—way more (Wall Street Journal). How “dark design” spurs us to give.

Don’t store cash in Venmo and PayPal, US regulator warns (CNN). There are few, if any, protections for such money.

More than half of Gen Z holds investments, and most got started before turning 21 (Money). I love the idea of young people getting started with investing, as long as they understand what they’re investing in and can trust the people giving them advice.

How to know if you’re living with a ‘money avoider’ (MarketWatch). And how to get them talking about their least favorite topic.

Dave Ramsey faces $150M lawsuit for promoting company accused of fraud (CBS via Yahoo Finance). When advice is given, it’s important to know whether there are any conflicts of interest.

14 attributes of greatness (Art of Manliness). Lots of good insights here, with implications for career management and many other spheres of life.

Should I buy an AirTag for my checked airport luggage (Clark Howard). In a word, yes!

What Gen X needs to know about their aging parents’ finances (Kiplinger). It can be difficult to open up these conversations, and it’s so important.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Money Books for Older Kids

Last week’s post about giving a money book to your young kids prompted some requests for recommended books for older kids, which is what this article is all about. The suggested age ranges are in parentheses.

Story-based books

A key difference between money books for young kids and money books for older kids is that the ones for younger kids are stories that convey a money-related message whereas those for older kids tend to teach the lessons more directly.

However, the first three recommendations straddle the two worlds.

The Ultimate Gift (14+). Jason’s great uncle passes away and leaves part of his fortune to him. But he also puts some conditions on the money, leaving Jason a series of life-changing instructions that he recorded before he died. Faith-based lessons about money and much more.

The Richest Man in Babylon (16+). First issued in the 1920s as a series of pamphlets, this is one of the true classics of personal finance. As the description on Amazon puts it, “Countless readers have been helped by the famous ‘Babylonian parables,’ hailed as the greatest of all inspirational works on the subject of thrift, financial planning, and personal wealth.”

The Wealthy Barber (16+). A fictional barber, Roy, teaches customers important lessons of wise money management as he cuts their hair, teaching that even on a modest salary people can achieve financial success.

Personal finance books

The Grad’s Guide to Money (16-19). I had to include this one since I wrote it! (It’s part of the Navigator’s series of “The Grad’s Guide to…” books.) Teaches young people the importance of cultivating the right financial habits now. Even though they may not have much money at this stage of life, the habits they build now will be magnified once they do have some money—for better or for worse. Practical applications of clear biblical principles.

The Money Challenge for Teens (13-19). Trusted Christian author Author Art Rainer introduces readers to some fictional young friends who are navigating financial waters and learning how God would want them to face college choices and car loans and thoughts about retirement (yes, even as a teenager!).

O.M.G.: Official Money Guide for Teenagers (10-18). This short (48 pages) book filled with illustrations is a quick read that covers the essentials—from budgeting to saving, and from insurance to philanthropy—in an engaging format.

O.M.G.: Official Money Guide for College Students (17-22). Also short (52 pages) and filled with illustrations, this one targets the college-age crowd with additional topics like student loans.

Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By (15-21). “…initially developed by the author to pass on to his five children as they entered adulthood,” the 99 principles are grouped into eight overarching lessons.

The Teen Money Manual (15-18). Packed with illustrations, charts, graphs, and checklists, this book covers all the essentials in a detailed, yet easy-to-read way.

Secret Millionaires Club (8-12). This one probably should have been on last week’s list since it’s for younger kids. It’s Warren Buffet as a cartoon character teaching kids “26 secrets to success in the business of life” — lessons about personal finance and personal character.

Investing books

The Motley Fool Investment Guide for Teens (12-16). The founders of a very successful series of investment newsletter direct their breezy, humorous style of teaching toward teens. The examples may be a bit dated, but the principles are timeless.

Blue Chip Kids (12-16). An introduction to the world of investing by an investor/lawyer who originally wrote this for his 13-year-old son because of his frustration over the lack of investing books for kids.

Career books

What Color is Your Parachute for Teens? (15-17). College is a very expensive place to find yourself. Far better for our kids to know what they want to do with their lives before they move into the dorm.

Bonus idea: Crown Financial Ministry’s Career Direct assessment.

Entrepreneurship books

How to Start Your Very First Business (8-12). Companion book to The Millionaire Kids Club, the cartoon version of Warren Buffett is back, teaching kids lessons on creating and managing their own business.

The Richest Kids in America: How They Earn It, How They Spend It, and How You Can Too (14-18). Written by one of the co-creators of the Chicken Soup for the Soul series, this book provides guidance and lots of inspiration by telling the stories of real kids who’ve started their own businesses.

What other books would you add to this list?

Also, don’t forget that summer is a great time to be intentional about teaching your kids a comprehensive, biblical approach to money. To help with that, pick up a copy of my new book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management.

If you haven’t done so already, why not subscribe to this blog? Twice a week, you’ll receive ideas and encouragement for using money well. Also, please share this post using the social media icons below or email it to a friend by clicking on the envelope icon.

Profitable Ideas: When Things Were Just Things, Investing’s Confidence Gap, and More

Weekly roundup of recommended personal finance articles from around the web.

Remember when the things we bought were just things? (World). “Are we so attached to our past consumer purchases that we’ll flock to movies about them a couple of decades down the road?”

Why tipping prompts are suddenly everywhere (Wall Street Journal). “I just wanted an energy drink, not a whole moral crisis.”

The death of ownership (Business Insider). More and more, “buying” something today means subscribing.

Regulators want fashion brands to pay for their textile waste (Bloomberg). If we didn’t buy so much clothing, wouldn’t manufacturers make less? See also, How to shrink your clothing budget (MoneyNing).

How tech threw sports betting a curveball (Slate). “You can’t turn on the TV or use the internet or even listen to a podcast without the ever-present opportunity to take the over or the under.”

Rolling over 529 plans into a Roth IRA (Saving For College). Saving for college has become more flexible.

The gender confidence gap in investing (Axios). “There’s been a lot of academic research suggesting that men think they know what they’re doing, even when they really don’t know what they’re doing.”

15 years, 15 lessons: my journey of becoming minimalist (Becoming Minimalist). Happy anniversary to one of my favorite blogs.

To weigh in on any of the above, just leave a comment below. And if you haven’t done so already, sign up for a free subscription to this blog.

Put Some Money Books on Your Kids’ Summer Reading Lists

If you’re the parent of school-age children, the start of summer vacation marks a big change in routine. Suddenly, the kids have a lot more time on their hands. You’re probably already building in some extra reading time, and many libraries offer rewards for kids who read certain numbers of books.

Make sure there are books on their list that will help them learn about money. Here are some of my favorites, especially for younger kids.

Alexander, Who Used to be Rich Last Sunday. Poor Alexander. He had good intentions for the dollar his grandparents gave him. But with all the tempting things to spend it on, it was gone before he knew it. Teaches some great lessons about the importance, and the difficulty, of practicing delayed gratification.

The Gift of Nothing. What gift do you buy for the friend who has everything? It’s a gift that money can’t buy.

The Berenstain Bears. I have my issues with how this family is depicted, like the fact that Papa Bear is always coming up with bad ideas. But there are several books in the series that teach some important money lessons, including:

The Berenstain Bears Think of Those in Need. Some good lessons about the excesses in our lives and becoming aware of those who don’t have very much. Designed for kids ages 4 to 8.

The Berenstain Bears and the Trouble with Commercials. The Bear kids learn that the commercials they see on TV may not always tell it like it is.

The Berenstain Bears’ Trouble with Money. The little bears learn how to strike the balance between hanging onto money too tightly and spending it too freely.

The Berenstain Bears’ Dollars and Sense. Brother and Sister Bear learn how to manage an allowance.

I’ve asked readers for their input on this in the past, and here are some of their recommendations:

Abigail mentioned Bunny Money. As she described, “These siblings are on a trip to buy Grandma a present, and in the process they learn that money is finite, they need to make choices, and there are consequences for the choices they make about money.”

Pam recommended Ramona and Her Father by Beverly Cleary and Double Fudge by Judy Blume.

Amy said, “Two great money books for school-age kids are The Seventeenth Swap by Eloise Jarvis McGraw, which is about a boy who ‘swaps up’ 17 times in order to get his disabled friend the pair of red boots he desires but can’t afford, and The Toothpaste Millionaire by Jean Merrill, which is about a boy who becomes a millionaire by selling toothpaste almost at cost because he finds out what the mark-up for it is and thinks it’s so ridiculous. He develops his own line, creates his own business plan and goes for it. It’s a very funny book and there is a lot of learning in it, too—math and how a business works, etc.”

What are some of your favorite money books for young kids? Leave a note in the comments section below.

Summer is a great time to be intentional about teaching kids other lessons about money as well. To help with that, pick up a copy of my new book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management.

Who else do you know that would benefit from reading this article? Please forward a link. And if you haven’t done so already, you can sign up for a subscription to this blog by clicking here. Twice a week, you’ll receive ideas and encouragement for using money well.