Back to College -- Debt Free (Part 1)

When Bethany was four years old, she came running in the house sobbing uncontrollably. I smoothed her blond curls and held her, “What’s wrong, Bunny?”
“I don’t want to leave you and go to college!” Her chubby arms held my neck tight.
“Um, well, Bunny, you don’t have to go to college any time soon!” I soothed, while rubbing her back.
She sat up straight, “I don’t?”
Wiping away her tears, she sniffed, “Good! Can I go back to Julie’s house and play again?”
I figured out later that all the drama was because Julie’s older brother was leaving for college and her friend’s family was sad to say goodbye. She thought she was going to have to leave us and it made her sad.
Fast forward the better part of two decades and she’s now a rising senior at Moody in Chicago, majoring in media communications. She’s not crying when she goes back to school, although we miss her. The good news is that she, along with all our other kids, are graduating debt-free! We don’t have any student loans and we didn’t have to refinance our house. Here are a few quick tips to pay for college. For more info, email assistant@elliekay.com and ask for the “College Crunch File.”


1. Make the Right Choice – Choose a school not because it’s the best, but because it’s the best value. Change the conversation from “I’ll go to the best college that I can get into” to “I will go to the school where I can get the best education possible for the least amount of student loan debt.” Our son, Daniel, chose the University of Texas (Arlington) over the scholarship he got to Syracuse and TCU because he would still have 60K in student loan debt after the scholarships ran out. He graduated with honors and a degree in journalism. He’s a working writer in Texas and doesn’t regret his college choice.

2. Save Big on Books by Renting – The average student pays more than $600 for course materials – the largest expense after tuition and room and board. I’ve recently partnered with Follett and found that by renting textbooks through their Rent-A-Text program, students can cut costs by 50 percent or more. CafeScribe’s digital textbooks are another great way to save, and both options are available to purchase at more than 800 Follett bookstore locations and online through efollett.com. Students at non-Follett schools can also purchase their digital textbooks on CafeScribe.com. I ordered Joshua’s textbooks this week and saved 52%!!

3. Make Scholarships a Part-Time Job – Millions of dollars of scholarship money go unclaimed every year. This is free money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Go to www.collegeboard.com or www.salliemae.com to find scholarships that might be a fit for you.

4. Create a Budget, and Stick to It – As a parent of a college student, your love for your student is unconditional, but your money is conditional. That’s what we’ve always told our kids. To ensure students are making the most of their money, set a budget for spending and manage it by loading funds on a campus card to help track spending. And determine which on-campus retailers accept financial aid to be certain you’re making the most of your college dollars.

Ellie Kay
America's Family Financial Expert (R)
 

Leaving Home 101 - Launching Money Smart Kids

My five-year-old son, Jonathan, was very mad and having a horrible, no good, very bad day. His three-year-old brother, Joshua, had taken all his favorite GI Joes and threw them in the toilet—again.
“I haffa tell ya’ mama,” He announced when he came into the kitchen where I was mixing a batch of brownies, “I’m gonna’ run away.”
Gazing at his determined face, I leaned down and met his eyes, “Well, we’re going to miss you around here, son. Let me at least pack you a lunch before you go.”
As a veteran mom of many, I knew Jonathan’s terrible, no good, very bad day would pass and that he was probably just going to his friend’s house to play. I asked his older brother, Daniel, to get on his bike and follow his younger brother to make sure he would only go as far as the Maerten’s house.
I dialed Leanne Maertens number, “Hey Leanne, is Jonathan there yet?”
I heard her doorbell ring, “Yes, I think he’s at the door now.”
“Well, he’s run away from home and I figure he’ll hang out until dinner. Let me know when he leaves.”
Fast forward a few years and Jonathan’s left home again—for good. He’s earned a $435,000 scholarship to The United States Air Force Academy. He learned that there’s a good way to leave home and a not-so-good way to leave. Here are the things parents can make sure their children know in order to leave home well.

Budget Babies
Before your child leaves make sure that you help them establish a workable budget. Go to my tools page at www.elliekay.com . The categories should include housing, transportation, clothing, food, entertainment, and (if necessary) tuition and books. Decide, up front, what they will pay for from their own work money and what you will cover. Ask them to send you a monthly budget report and review it with them. Look at this as an opportunity to coach them in right choices but beware of funding their failures by bailing them out on a regular basis. This is the time for them to learn to live on their own in a healthy way. A great resource is www.MoneyTrail.net , a free, online allowance and money management system for kids, teens and families. Kids & teens track their allowances, IOUs, cash and gift cards. They learn to make smart saving and spending decisions, too.

Bucks and Money Cards
Your college bound student will need banking accounts for checking and savings. Research banks (or savings and loans) that offer student banking programs. In our family, we like to get money cards like the American Express prepaid credit card that is safer than cash, do not require a credit check and are easily reloaded. With this money card, our college kids have the benefits of a debit or credit card without the liability or temptation to get into debt. They are convenient, safe and efficient—plus we can reload funds onto their cards either online or at our local store.
Now is also the time to educate your child on the dangers of easy credit. Direct them to order their free annual report from each of the three major credit reporting bureaus to make sure no one has stolen their identity.
Help your children set up their own credit card through your own credit card company with an "additional card" where you are the gatekeeper. You can set up credit limits and turn off ATM use as well. As they charge items that you were planning on pay for (such as books, rent, food) then pay off the balance each month, they’ll build their own credit score as well. Our son, Daniel, as a senior in college built enough good credit to prequalify for a townhouse! It all started with our involved effort to help him establish and build credit wisely—without getting into debt.

Borrowing and Student Loans
Parents often ask, “How do we pay for college, should we get a HELOC or a second mortgage?” I do not believe you should leverage the equity in your home (which is part of your future retirement) in order to pay for your child’s future. HELOCs (Home Equity Lines of Credit) are also a poor choice. Instead, look at a variety of scholarships, work study programs, and other options available through the financial aid office at the school. Another financially healthy option is to have your child attend a college you can afford. Our mantra for our college bound kids is: I will go to the school where I can get the best education possible for the least amount of student loan debt.
My oldest step-daughter took a year off school between her sophomore and junior years at Columbia University in order to work to help pay for college. Some employers will help pay for college as well. Exhaust all your options and think outside the box in order to minimize college debt. If you must subsidize tuition through student loans, then make sure the loans are in your student’s name and that they do not exceed $20,000 by the time they graduate from a four year college. Email assistant@elliekay.com and ask for the "College Crunch" file for dozens of great ways to get through college debt free!

Bagels and Broccoli
My daughter, Bethany, was graduating from high school and I decided to let her do our grocery shopping in order to teach her how to shop wisely when she was on her own at college. When she got the the bakery department, she exclaimed: “Wow! I can get this bag of eight bagels for less than this other bag with only six!” She was so proud (and so was I!)
Be sure your kids know how to price compare and how to read the store labels as well. Show them the “price per ounce” on the shelf so that they can recognize value. Walk them through the frozen foods section to compare the difference between buying fresh broccoli versus frozen and let them see the savings in frozen convenience foods versus fast food pizza. We also teach them to use www.couponmom.com in order to match up coupons with local sales in order to get items for pennies or for free.

Launching a child in leaving home can be costly and stressful unless you are strategic and purposeful in your planning. With the right moves, you can help your student finish well at home and start their new life with a healthy financial perspective.

Ellie Kay
America's Family Financial Expert (R)

Saving Money at the Pump This Summer!

The good news for Joshua, the youngest Kay Kid - he inherited the 'Burb!
The bad news for Joshua, he inherited the 'Burb!

With gas prices rapidly approaching $5/gallon here in sunny southern cali, he may have to park that beast, before he ever gets a chance to drive it.

But there are ways to save at the pump, if you are strategic. Here are my tips:

• Plan – AAA’s Fuel Cost Calculator (www.fuelcostcalculator.com) helps you plot out the most efficient route. You can also put in the year, make and model of your car and it will compute what you’ll spend on gas.
• Prices – Get the app or go to sites such as www.gaspricewatch.com , www.fuelmeup.com , or www.gasbuddy.com and find the cheapest price for gas both at home and enroute. Find the app called Gas Buddy or AAA”s Trip’Tik Mobile iPhone.
• Pace Your Driving - Jackrabbit starts and constant speeding up and slowing down cost precious gas mileage miles. Instead, pace yourself.
• Pushing It Up! -- Will only speed up your fuel consumption. According to the Department of Energy (DOA) it takes a lot of energy for your vehicle to push the air out of the way as you speed down the road. Driving the speed limit of 65 versus 75 can save as much as 15% on fuel consumption because of the energy needed for higher speeds.
• Puhleeze Give Me Some Air -- At speeds of 40 mph or greater, it costs more to leave the windows open (due to drag) than it does to run the air. In a place like Palmdale, CA where the summer temps reach 110 degrees that's good news!
• Pitch the Junk! -- Take your golf clubs, soccer chairs, Salvation Army book donations and all the other JUNK out of your TRUNK. Otherwise, you're paying more to haul it.
• Pressure and Maintain - The National Highway Traffic Safety Administration estimates that one-in-four cars have under inflated tires by 8 pounds per square inch. By getting the right amount of air in your tires and taking a few minutes to change the air filter, you can increase your gas mileage by 3.3%! A tuned engine can save an average of 4% more and detected problems, like a bad oxygen sensor can help your mileage by 40%!
• Pool it -- Car pool whenever possible, and let everyone pitch in with their dough!
• Premium, Schmium -- According to AAA, only 5% of vehicles in the US require the premium gas--it does not help your vehicle for you to pay more for it. Buy the regular stuff and have no worries.
• Peak no More! – Plan trips, if possible, during off peak times to avoid traffic jams.
• Pay up! -- Make teens pay for gas when they aren't driving for sanctioned raod time (such as school, work, running your errands, etc). It's amazing how much less miles they will put on the car!

Happy Driving, Joshua!

Love Mama,
aka America's Family Financial Expert (R)

Bail Your Kids Out of Debt? Marry a Slacker? Co-Sign A Loan? - Ellie Kay's Q&A

Ellie was on ABC NEWS, and others stations across the country again this past week. All the following people who asked questions will get a free copy of The Little Book of Big Savings!

Here's her answers to your questions:

Q. Our son is only 20 and has $4,000 in credit card debt. He’s not able to pay and wants us to bail him out. I warned him about his credit cards because I made the same mistake when I was in my 20s and he didn’t listen to me. But I feel like a bad parent if I don’t help him out. What do you recommend?

Tim from New Mexico
Submitted via Facebook

ELLIE: Sorry to hear about your son's decisions, Tim. NO, you should NOT bail him out. It sets a precedence and you'll have to do it again (or do it for other kids, friends or family members). You can come alongside him and help develop a recovery plan. Or, offer to go with him to a free financial counsling center. Go to my free tools and click onto the section about consumer debt for more help. Your love for your son is unconditional, but your money is conditional. He made his own choices, now he has to deal with the consequences. You'll support him emotionally, but you won't fund his mistakes.

Q. Our daughter has a used car that we bought her when she was 18. She’s now 22 and newly graduated with a $30,000 a year job. She has to pay rent, insurance and all her living expenses and wants to buy another car. The one she has now runs just fine, but since she got a new job she wants a new car. However, we would have to cosign on it, what do you think?

Christine Thomason, Minneapolis
Submitted via Facebook

ELLIE: Congrats, Christine! You raised a baby girl who not only graduated from college, but also found a good job right away--well done! Now, the next step is to help her learn delayed gratification. She WANTS a new car, she doesn't need one. The fact that she needs a co-signer indicates the bank does not consider her a credit worthy risk--neither should you. Instead, encourage her to set aside $350 to $500 per month (whatever her car payment would be) for a year. Then, she can sell her existing car, buy another nice USED car and pay cash. If she saves this way for another year, she can sell the 2nd car for a nicer used car (using her saved cash) and still pay cash. This way, she's driving her "dream car" for free with NO car payments!

Q. We have two kids that are 14 and 16 and are on competitive basketball teams. They take a bus two to three times a week to tournaments and other competitions. We have to pay for their meals on the road and they are burning through our cash constantly. They’ll spend $15 or more (each) for a fast food meal and we’re going broke. Is there a way to motivate them to cut back on how much they spend?

Thomas Evers, New York
Submitted via email

ELLIE: Thomas you've found yourself in the place where you are getting played by your kids. I know what it's like, I've found myself asking: "How did I get here?" when it comes to my teens running over me with their personal agendas. It's time to regain your lost ground and be the dad. Tell your kids that you are putting them on a food budget and they will now have $10 (each) to spend on fast food. If they were eating in a nice, sit down restaurant, it would be different. But they're not. Tell them if $10 is not enough, they can bring a sack lunch on road trips or pay the extra expense with their own money. Either way, they're not going to starve and you won't go broke.

Q. Our oldest daughter is suppose to get married in December. She is 24 with a good job and her fiancée is 30, has a degree in electrical engineering but doesn’t really have a job. He drives a truck off and on. It’s spooky, because when I got married, it was a similar situation and we ended up divorcing because I was the main breadwinner and he couldn’t hold a job. I don’t want her to make the same mistake. Do you think a couple has a “right” to know about each other’s finances and attitude toward money and work before they get married?

Donna Michaels from Oklahoma City,
Submitted via blog

ELLIE: History has a way of repeating itself. There are so many red flags in this situation, that you are right to be concerned as a mom. First of all, your daughter needs to go to premarital counseling with her fiancee and stress with the counselor that they want an emphasis on financial issues. If her fiancee will not go, then I think she should postpone the wedding. A couple of facts are clear: he is well educated and underemployed. The reason might be something legitimate like "the economy" and counseling will make that clear. But the other reason could be that he's unmotivated when it comes to providing a living--in other words, he could be a slacker. So if your daughter wants to be the main breadwinner and face a life of living with a man who is underemployed, then keep the December wedding date. Otherwise, get the wisdom of a third party involved to determine the real reasons for his unemployment.

Please submit your questions and if I answer them in a blog, I'll send you a free copy of The Little Book of Big Savings!

Ellie Kay

America's Family Financial Expert (R)

What Should You Teach Your Three Year Old About Money?

Here we have the world's cutest four year old, three year old and 7 month old! But what should they be learning about money right now?

So how do you raise a kid that owns his car, debt free, owes no credit card debt and has a 760 FICO score upon graduating from college (no student loan debt) at the tender age of 22? We've been able to raise a kid (or two or five) that are financially fit. We still have some at home that we're working on! But you can raise financially literate kids, too!

It starts with a "Fiscal Report Card" and checking off what they need to know at various ages. Here's a partial report card you can review and if you want the full version (for free) just email assistant@elliekay.com and put "Fiscal Report Card" in the subject line.

Youngsters

Age 2 to 4
• Picks up toys cheerfully
• Is on a schedule for sleep, play, and work (or school)

Age 4 to 6
• Makes bed in a basic way (not necessarily neat)
• Picks up room regularly
• Brings clothes to hamper
• Knows how to set and clear the table
• Knows how to take out the trash


Middlers

Ages 7 to 10
• Knows how to sort laundry into whites, coloreds and darks
• Can fold laundry and put it in everyone's room
• Is given an allowance
• Has a savings account at home and at a bank
• Manages a fun kid budget (restaurant, zoo, amusement park, etc)


Ages 11 to 12
• Begins to do additional "jobs" for hire within the home and occasionally for friends or family.
• Has a savings account with at least $200 to $250 in it.
• Is learning the meaning of delayed gratification
• Can save up for half of a larger ticket item they want (bike, skates, video game, etc)
• Is regularly contributing to a community organization either through volunteer hours or donating goods (clothing, toys, money)

Teens

Ages 13 to 15
• Can manage and balance their own checkbook with supervision
• Has enough in savings to take out $200 to $300 to start a mutual fund
• Is able to do outside jobs for hire among approved "employers" in the neighborhood
• Regularly pays for outings (movies, theme parks, etc)
• Is saving for a vehicle
• Is aware of the fact their grades in high school will impact their ability to get into college and earn scholarships for college


Age 16 to 20• Can balance a checkbook without supervision
• Has an additional credit card (on parents account) and can use it responsibly
• Can manage and balance a clothing budget and personal financial budget
• Regularly works inside and outside of the home during breaks from school
• Has paid for 1/3 to 1/2 of the cost of their car
• Maintains a good GPA (or what they are capable of)
• Has a regular volunteer position (hospital, coaching, church involvement, etc)
• Can use social media to learn ways to save money

What are you doing with your kids that is working? Let me hear from you!

Ellie Kay
America's Family Financial Expert (R)

Atonement - How to Keep Your Kids from Making the Same Mistakes You Made

Can you atone for the financial mistakes you made and keep your kids from making the same errors? This week in national media, I'm talking about how to help your kids make right financial choices. Here's my main talking points.


Statistics indicate that the majority of high school graduates cannot pass a basic financial literacy test and end up accruing $3800 in consumer debt in college. In fact, a 2010 American Express survey of parents with children between the ages 6-16 revealed that:

• 71% of parents say their children understand we are in a recession.
• 91% of parents say they are committed to instilling lessons of financial responsibility upon their children, with 62% giving their children a weekly allowance.
• One in five children (20%) has indicated to a parent that "maybe we shouldn't buy that due to the recession."

Q. Ellie, in a day where foreclosures abound and consumer debt is at an all time high, there are many parents who are watching who want to help their kids avoid the mistakes they made. Have you ever made any financial mistakes?

ELLIE: Yes, I’ve “been there/done that” and have the t-shirt to prove it. Our family had 40K in credit card debt when we were first married even though my husband had a good job. There were a couple of weeks when we didn’t have money for groceries, things were so bad. We were able to change our ways and became financially healthy and we don’t want our kids to make the same errors we did.

Q. Why do parents need to take responsibility for teaching our kids good money management, aren’t there new financial literacy programs, such as Jumpstart, that are making a difference?

ELLIE: I’ve spoken at Jumpstart conventions and they are a fantastic organization, but these programs aren’t available in every school and it’s up to parents to take that responsibility. In fact, I think that one of the greatest things we can do for our kids is to teach them about money management, something they don’t learn in the classroom. Since the number one reason cited in divorce is “arguments over money” teaching our kids to be financially literate can even help them in their future relationships.

If they don’t have to worry about debt, they know how to manage a budget and they learn smart ways to save money, then we’ve given them the best gift possible. We all know that kids learn most about how to manage money from their parents. And parents have a huge opportunity to teach kids healthy money management habits at an early age so they don’t make the same mistakes we made.

Q. What are your favorite ways to give your kids financial responsibilities without losing control?

ELLIE: There are several options out there for parents looking to stay in control of family spending while still extending financial empowerment to their teens and young adults. One of the things we’ve done is to teach our kids from a young age that if they “borrow” money from us, they pay it back at their next allowance, thus developing the habit of not carrying a balance from month to month. This concept is most closely identified with the Charge Cards that we have with American Express. In my work with their consumer education area, I decided to add additional cards with custom limits to our own account that is in the children’s name so we can teach them about the smart use of plastic and they can never spend more than the limits we’ve placed on the card. One of the reasons I believe in a charge card is that you have to pay it off at the end of each month. These cards are on the parents' account, not the teens, but we can go online and see how they spend the money and we can also set limits for each additional card. Once they turn 18, these cards, while still under our account, can be also used to develop our child’s FICO score.

Q. What are some of your favorite money management tactics?

ELLIE: One of my favorite money management tactics is to teach kids the art of managing an allowance. By getting an allowance, kids learn to manage their own money while they are still in our house and have the freedom to fail under our safety net. We teach them to give, save and spend smart. We’ve also used the tactic of a “Fun Kid Budget” where we set aside a certain amount for trips to the movies, zoo or an amusement park. They manage the money we’ve given them for the fun outing and the key is: they get to keep what they don’t spend. As they get older and become teens, their budgets expand to include a school supply budget, clothing allowance and a gasoline budget. A great option is to put their designated amount on a American Express PASS , which is a prepaid, reloadable card that once again, we control. That way, we don’t have to worry about them taking cash to the mall or using our debit card and the funds can be replaced if the card is lost or stolen. It’s like driver’s ed for the teen’s wallet but parents are in the driver’s seat.

Q. You have a “Family 401(k)” how does that work and what age do you start this kind of savings program with your children?

ELLIE: A “Family 401(k)” is a program where our kids have to earn half of the money for a large ticket item that they want such as a bike, videogame, roller blades, skateboards, etc. It may take months for them to earn their half, but once they’ve earned it and purchased the item, they take far better care of it than if we just bought it for them outright. They worked hard to earn their half so they’re going to make sure that videogame doesn’t get scratched and that they don’t leave their bike out in the rain. They can start this program as young as 6 or 7, depending upon the maturity of the child and their math skills. I remember our daughter, Bethany, saving for 8 months to get an American Girl doll, she was only seven years old but she was so proud of it and took such good care of it that it’s still in good shape and she’s now 20 years old!

Q. How can activities like back to school shopping help parents teach kids about money management?

ELLIE: A recent survey that examines consumer back to school spending intentions, notes that 39 percent of Americans plan to spend more on back to school shopping this year than in 2009, yet the majority (63%) say they will have a set budget and virtually all parents (94%) say they will look for ways to be resourceful and stretch their dollars.

I come alongside my kids and teach them how to compare prices, recognize quality and shop the sales, even using a coupon on some of these items. For our teens, we let them use our smartphone while in the mall to local coupons and the best deals that are accessed on the phone and used at the register. For example, retailmenot.com will list coupon codes and special deals. The fact that we’re using their “language” which is technology drives the financial lesson home in an upbeat and lasting way.

One of the other things we do is to teach them that “we pay for the item but you pay for the brand.” So if my son wants the latest Air Jordans, then we tell him we’ll pay $50 for the tennis shoes and he pays the additional $70 (for a total of $120) for the brand. It makes them realize what’s a need and what’s a splurge, then they can decide if it’s worth it to spend their own hard earned money on a brand.

If we can help our kids do better, then you can, too!

Ellie Kay
America's Family Financial Expert (R)

Back to School Savings Tips

Back to School Savings Tips

I've been on KLOVE lately sharing these tips

• Loving The “Two For One” – (Financial Literacy and Back to School Budgets) – Why not teach your teen two things at once such as financial literacy by using a back to school budget? Set a spending amount on a prepaid card or their own supplemental card (I added cards on my American Express account) and coach them on what their limits are for the shopping season. Whether the budget is $50 for your teen to buy school supplies or $500 for your college student to buy dorm room essentials, you can monitor how they are spending and coach them on the best ways to use their budgeted money.


• Layer the Savings – In today’s economy it is no longer enough to just save by buying something on sale—today, you have to layer the savings. For the store, this means buying items on sale when you also have a coupon. Go to couponmom.com to see what is on sale in your neighborhood and the matching coupon.
For online shopping, look for sale items where you can also use a coupon or coupon code to save on the price, shipping and more. Go to RetailMeNot.com or CouponCabin.com to find the right code. It requires a little research, but it can also translate into hundreds of dollars of savings for your back to school season.


• Loss Leaders – When shopping for back to school, take advantage of the loss leaders that retailers are offering. You may get that name brand shoe for 50% off and they are hoping you’ll do the rest of your shopping at their store as well. If you take advantage of all the different stores’ loss leaders by shopping at places that honor competitor’s ads, you’ll not only save money, but you’ll save gas and time.


• Little from Big – When planning for kids school lunches this coming fall, buy lunch staples in larger sizes to save by buying in bulk, then repackage them into smaller sizes. For example, take that 5 pound bag of mini carrots and put them in snack sized plastic bags for a healthy and affordable option for lunch at a 30% savings over buying the smaller pre-packaged sizes


• Logistical Savings – When our kids went out of state to college and we had to buy items for their dorm rooms, we chose online retailers who also had physical stores in the town where they went to school. These vendors had site to store options where they would send the products to one of their local stores and not charge a shipping fee. This option allowed us to shop at our leisure online, incorporate all the savings factors we could, and have the convenience of our kids going to their local store to pick up the items we ordered. For example, Walmart's site to store program offers free shipping to the local store for pickup.


• Limited Spending Plan – One technique we’ve used for all our children, whether they are in elementary school or college is to make saving money a family affair. We give the kids a spending plan, telling them how much money we will give them for their back to school budget. The fun comes in when we tell them that they get to keep what they do not spend. So if we’ve budgeted $75 for tennis shoes and they find them on sale for $35, then they get to pocket the extra $40. It’s amazing how our kids can distinguish between “needs” and “wants” when it comes to this added motivation of learning ways to spend less and save more. This fresh idea not only saves our family money, but it has trained all our children in money matters, making them more adept as young adults.

• Lengthen The Shopping Season – One of the reasons families overspend for back to school items is because they are locked into the idea that they need all the school supplies, clothes and gadgets the first week of school. In reality, the majority of these items will be on sales or clearance, especially clothing, within the first month after school starts. So consider letting your child start the year with just enough clothing to get a good start and f inish out their wardrobe as key items go on clearance. The same can apply to backpacks, lunch boxes and sporting equipment. As long as they have a prepaid card or a supplemental card with their limit, you’ll find yourself right on track and get more for less.

• Leverage High Tech Savings – One thing that I’ve learned as a mother of seven is that I only have a limited amount of time to teach my kids the things that matter most in life. By making back to school shopping a family effort, I’ve been able to train our kids in money matters in fun ways that incorporate their strengths. For example, I let our teenagers shop in a different part of the mall, encouraging them to do their online research by comparing store prices with other deals on their smart phones. For example, they see a scientific calculator in the electronics store for their algebra class, they can search mysimon.com to see if it’s the best price. Then they text me the numbers and I give them approval to buy it, which empowers them to contribute to our family’s economic well being while allowing them to learn financial literacy as well.

• Long run Lessons – Every year, I’ve used back to school shopping as a key opportunity for my kids to learn financial literacy lessons. By setting them up with a budget through the use of a PASS or SUPP card, I’ve been able to teach them how to spend wisely and then helped them start to develop a good credit score when they are 18. They key is that I get tomonitor and track their spending so they can’t fail. The result is that my children have great scores at young ages. In fact, my 22 year old son, had a 750 credit score when he graduated, good enough to prequalify for a townhouse mortgage!

Look for Scholarships -- Millions of dollars of scholarship money go unclaimed every year. This is free-lunch money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Salliemae.com has over 1.9 million scholarships to research valued at 16 billion dollars! You child, for example, could write a 500 word essay on skateboarding or other areas of interest—there are thousands of scholarships that go unused every year because kids don’t apply for them. Don’t forget to have students apply to local civic organizations and community scholarships as well—the high school counselor should have a list of these scholarships.

: Locate Discount Books - Buying your books from a used bookstore can save money, but buying them online can save even more. My son, a journalism major, bought had a book that was $150 new, $30 at a used book store and he found it for $1.50 at amazon.com. You can also try Campus Books or Abe Books to compare prices across the internet to find the best values. Just be sure to buy them two weeks before classes start. As soon as you get your book list, begin your search because the early bird gets the best value on books!
Happy Back to School Savings!

Ellie Kay
America's Family Financial Expert (R)

The Family Road Trip

This week on ABC NEWS NOW, I talked about how to take a Family Road trip that won't traumatize your children! I remember my dad stuffing us kids in the back of a VW bug and traveling from TX to IN, making about 600 miles per day. Need I say more?

Here are some ideas that will make your family trip a lot more fun and affordable.

Q. First of all, let’s look at a question that many families are asking: is it cheaper to take that long family road trip, or is it more cost effective to fly?

ELLIE: It’s all in the numbers including how far you have to travel, how many family members and how many nights on the road. It’s going to be pretty easy for you to calculate the bottom line for flying versus driving. Just go to costToDrive.com to calculate the mileage, gas, travel time and carbon footprint of anywhere in the US. You’ll also need to go to hotels.com to add that expense to your total. Then, go to bookingbuddy.com to find the best price on airfare. This site will compare the prices from other travel sites such as expedia, orbitz, Travelocity, cheaptickets and more. Don’t forget the rental car if you’re flying, you can research that on hotwire.com .

Q. One of the greatest expenses while traveling down the highway is for snacks, lunch and dinner. It can not only get pricey, but these purchases can also take a toll on health as there seems to be an emphasis on eating fast food while on the road. Do you have any ideas on other options?

ELLIE: If your children are little, the stops you make on the road are essential for them to be able to get out and stretch their legs—adults need that, too. When our kids were little, we packed a lunch for the first day on the road and stopped at roadside parks. It’s easy to plan these stops with the assistance of your GPS or your smartphone, just locate a parks along the way and plan accordingly. To save money on snacks, pack some healthy options in individual bags for each family member and include options such as carrots, grapes, cherries, pretzels or trail mix.

Q. One of the tips you share is to set realistic expectations. So how long can you realistically expect to travel in a car with a three year old?

ELLIE: I think that you shouldn’t try to conquer more than 300 miles a day with a preschooler, because they’ll arrive tired and cranky at your destination AND SO WILL YOU! You need to know your child(ren) and adjust your expectations accordingly. Are you one of those blessed families whose kids sleep as soon as you get in the car? Then you can probably handle a few more miles a day. Does any of your family members have health issues that require frequent stops, then add some extra time to your trip so you aren’t stressed. Setting realistic expectations will help you and your family have a better trip.

Q. Another challenge for families is keeping the kids occupied. Older children can use their Ipods to stay busy and everyone enjoys movies on the way. But even these options can lead to the inevitable boredom as kids start to get restless. You’re a mother of many, what do you suggest?

ELLIE: I think this is where creativity comes into play. When our kids were all school aged and we had a long trip (or a military move), I shop ahead of time for small games, books, activity puzzles, little toys and other trinkets I knew they would like. Then I’d wrap these “surprises” in gift paper and put each child’s name on it. At the top of every hour, if they were good on the road, we would give them their individual present. Sometimes, a grouchy child wouldn’t get his because he wasn’t co-operating. He’d watch his siblings playing with their gifts and it would motivate him to behave. I also think that an adult should be in charge of not only disbursing the surprises, but also handing out the individual snacks at certain times as well. You can give them out at certain mile markers that the kids can look for and it becomes an effective way of passing the time.
This is also the time to develop your own traditions. My older kids liked creating Mad Libs and played slug bug or I Spy. But our younger kids developed a game called, “Name that movie line” which became a tradition in our family. We still play it when we get together and find it creates family bonding moments and is a unique Kay Family Tradition.

Q. How do you feel about souvenirs? Do you think that saving money means you just say “no” to the t-shirts, coffee mugs, statues and commemorative books?

ELLIE: I think that souvenirs are an important part of any vacation time but it’s also important to not overspend on these category. We give our kids a budget for souvenirs and let them choose. We also encourage them to pick things that are of a better quality and yet inexpensive such as spoons, shot glasses, or magnets.

Q. What if you haven’t taken a vacation yet and don’t know if you can afford it. Do you have any creative ways to save money on a place to stay on the family road trip?

ELLIE: If you have friends that you like a lot and think your friendship can survive the test of a family road trip and vacation, then double up with that family and cut your bills in half. For example, the normal price of a week-long mountain cabin rental with three bedrooms in Manitou Springs, CO was $900. If each family pays $450 instead of the full price, they may be able to afford a vacation that might not have been available to them otherwise. You can go to vrbo.com or www.findrental.com. Suite hotels that offer extra rooms are also an option such as the ones found at orbitz.com or cheaphotels.com. For those who love the great outdoors, sharing campsite fees or RV rentals can split the price of a camping adventure. At RVRental.com we found rentals across the country that ranged from $117/day to $385 per day. Depending on the owner of the RV, other charges to consider are hospitality kits, kitchen kits, and/or emergency road kits. Cleaning fees will apply if the RV is not returned in the condition in which it was rented.

Q. What about saving money on food and entertainment once you get to your destination?

ELLIE: I recommend you go to entertaimnent.com and enter the zip code of where you’ll be traveling in order to preview their entertainment books for that destination. These are currently on sale and you can find discounts on food, movie tickets, amusement parks, hotels and much more. Also go to restaurant.com and enter the zip code to get gift certificates for half price and while you’re there, see if they have any sales. I recently bought $25 gift certificates at that site for only $2. Plus, use your smartphone by entering the attraction’s name to see if there are any coupons or codes you can download on your phone and use on the spot.

Enjoy your Family Road Trip!

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

Your Summer Savings Questions: Drive or Fly? What's SHARE? Kids & Budgets?

I recently appeared on ABC NEW NOW and answered your questions on summer travel, budgeting, SHARE for groceries and more!

Q. A friend of mine is in a part of a food co-op called SHARE and she gets $45 worth of food for $20. How do these co-ops work and do you think that they can save you money on your grocery bill?
Angie from Temple, TX via facebook

Ellie: S.H.A.R.E has been out there for quite a few years and our family even participated with this when we lived in New York. SHARE is an acronym for Self-Help and Resource Exchange – is a program where people get a break on their grocery bills by exchanging volunteer time for the opportunity to buy affordable food. For each package of food purchased, we simply ask for two (2) hours of “good deed” time, whether at SHARE, other institutions in your community, or your own neighborhood. Food packages (worth up to $45) offer meats, fresh fruits and vegetables and grocery items. The price you pay is based on what you select from the menu but you can generally save about 50%. SHARE purchases the food from growers, brokers and packaging plants and is never donated, government surplus, or salvage. Just google "SHARE" and your city to find the program in your area.


Q. We’re driving from Arizona to Louisiana for a family reunion. It’s just me and my wife, how do I tell if it’s going to be cheaper to drive or to fly this summer?
Al from Scottsdale, AZ via online contact form

ELLIE: That’s a good question, Al, because if you were going solo, it would definitely be cheaper to fly. But the way to figure the costs is to first do a mapquest to get the exact number of miles you would cover in a car. Figure your gas mileage and divide it by the total number of gallons by getting the price for gas at gaspricewatch.com. Multiply the number of gallons you’ll use by the average price per gallon and be sure to add the cost of a hotel in case you need an overnight stay. Then go to bing.com to look at the predicted costs of flights or go to bookingbuddy.com to see the average price of flights. You also need to factor in whether you’ll need rental car if you fly. Once you compare air fare versus driving, don’t forget to factor in the time off work it costs you to take the extra two days (or more) to drive.

Q: I read on your blog, Ellie, that you can purchase gift certificates at sites like restaurant.com. You said that when they run on sale, you can get a $25 restaurant certificate for $2. Are there any restrictions or stipulations we should keep in mind when purchasing these?
Steffy, Birmingham, AL submitted via facebook

Ellie: When you go to restaurant.com, you'll see that the restrictions vary from restaurant to restaurant. But all the stipulations are listed on the website before you. Most will not add in the alcohol to the minimum purchase and almost all will add an 18% gratuity based on the price BEFORE the certificate, just to make sure the server gets their full tip. So be careful not to double tip (adding yet another 15% to 20%) when you get the bill. You usually have to buy $35 in food to use the $25 gift certificate. You have up to twelve months to use the certificate. But if you do the math and if you spend the minimum $35, adding the 18% tip, then you’re paying $42 before the gift certificate and $17 afterward. Add in the $2 you paid for the certificate and you’ve paid around $19 for a $42 tab, which is a savings of over 50%.

Q. We are newlyweds and we’re trying to pay cash or debit for groceries, gas and entertainment, but still seem to go over budget. Do you have a secret for tracking how much we’re really spending? There are two of us and we don’t always know what the other is buying and before we know it, we’re over budget.
Joshua & Emmy from Fort Bragg

Ellie: My husband, Bob and I had this same problem when we were first married as well. It can get complicated when one partner is buying groceries and the other also stops in to get some essentials on the way home from work. Even though you may not be duplicating purchases (getting two gallons of milk instead of one), you may be overspending at the store, unaware of what your partner is spending. The easy solution is to get the cash you’ve budgeted for the week and put it in an envelope marked food, gas, entertainment. When you know you’re going to need gas on the way home from work, get money from the appropriate envelope. With both partners taking cash from the same source, you’ll soon see how quickly you’re getting to your stopping point and you’ll be able to more easily track your spending.

Q. We have three children ages 6 to 10 and when we go out to eat, they want to order the most expensive thing on the menu. Sometimes our eight year old has a more expensive meal than his father, and he never finishes it! How do we keep our kids on a budget so that we can afford to eat out more often?
Samantha Evans from San Diego

Ellie: I think that it’s important to get the kids in on the process of economizing and you can do it in a fun way. First, call a family meeting and discuss the fact that when you go out to eat (or to a movie, the zoo or a theme park) that you’re going to give each child a fun budget. You’ll pay for the outing, but they have an amount they need to stick to. If they come in under budget, they get to keep the extra money. That’s what makes it fun. When we did this with our kids, it was amazing how they suddenly wanted to order water instead of soda and eat ice cream at home instead of in the restaurant.

Happy Savings!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

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)

http://www.elliekay.com/

Kids and Money -- Listen to Ellie on Voice America!

Do you want to know how to teach your kid's about money? Listen to Ellie on VoiceAmerica!


Wed 10 AM PT/11 AM MT/12 PM CT/1 PM ET on VoiceAmerica Variety Channel
Real Parents. Real Solutions.
Money Matters: Teach Your Child How to Be Money-Savvy

Teaching your child how to manage money is a big responsibility. In today’s show, Ellie Kay, financial expert, author and mother of seven, will break it down to make the job manageable. Should you give your child an allowance? How much should it be? Should Learn More >> Missed the Live Shows? Past Episodes are available On Demand and Podcast Ready.

Tax Free Holidays

Consumers across the country are searching for ways to cut their spending and still buy what they need, especially when shopping for back-to-school essentials for kids. Many states offer tax free holidays during the back to school shopping season to help families purchase back to school necessities.


The tax free holidays are just around the corner and if your state offers this, it's important to take full advantage of this holiday. Here are some tips to help:

• FIND OUT THE DEALS - Take advantage of savings opportunities linked by local retailers to the upcoming Tax Free Holiday weekends. Don't worry, there will be lots of ads in your local paper. Some stores like Sears even offer further discounts like $10 off a $50 apparel purchase just for showing your PTA or PTO card or student id. Be sure you go shopping prepared with these forms of identification to get your discounts.

• FIND OUT LIMITATIONS - Each state has its limitations, so ask the cashier at your retailer what the rules are for your state. For example, some states will only allow up to $100 on any single item of clothing and only up to $750 on a computer. So know the rules by googling your state, "tax free holiday" and "2009."

• FIND LAYAWAY - Some stores such as K-mart have reinstituted layaway in direct response to the recession. This option varies from family to family but our family tries to minimize credit card debt and layaway is another option that helps avoid consumer debt.

Upcoming Tax Free Holiday Dates

STATE

Vermont 8/22
Georgia 7/30 to 8/2
Mississippi 7/31 to 8/1
D C 8/1 to 8/9
Alabama 8/7 to 8/9
Iowa 8/7 to 8/8
Louisiana 8/7 to 8/8
Missouri 8/7 to 8/9
New Mexico 8/7 to 8/9
North Carolina 8/7 to 8/9
Oklahoma 8/7 to 8/9
South Carolina 8/7 to 8/9
Tennessee 8/7 to 8/9
Virginia 8/7 to 8/9

Happy Savings!

Ellie Kay

America's Family Financial Expert (R)

http://www.elliekay.com/

Money Making Kids

"I know how I can make some extra money" read the caption on the outside of the card featuring a woman from the 1950's with a big smile. When you opened the card it read: "I'll sell one of the kids!" My son, Daniel, gave me that card, knowing how perfect it was for his mama!

Well, I learned how to save money using my kids, but in a slightly different way (rather than putting them up for sale on e-bay.) Jonathan, who prefers to remain anynomous (thus, the mask) wanted to earn money for a new electric guitar. I realized that I could turn over my "coupon job" to him and let him "earn" money by maintaining my coupon box. I've been so busy in the last few weeks, that I didn't have time to keep up with those little critters. I knew I was missing out on these savings in the grocery store.

So Jonathan began cutting, organizing and filing my coupons. The agreement was that he got the money I saved at the store from the manufacturer's coupons (including double coupons when I shopped at that kind of store) and I kept the savings from the store sales and store coupons. The first week, the total before savings was $189, the amount I paid was only $81 ($44 sale savings, $23 store coupons,and $41 in manufacturer's coupons). Jonathan bagged the $41 in cash and it was a win/win for both of us.

If you want to make money off your kids, you'd better watch it, especially if you have a really smart child! The next week, we ran to the grocery store to pick up a pharmacy prescription. Jonathan picked up a store coupon featuring sodas "four 24 packs for $7.99" with store coupon. He handed me the coupon and asked, "I know you don't usually buy us sodas because you don't think they're healthy. But do you think you could make an exception this week--especially since we have this coupon? Pleeeeze?" He batted his big brown eyes and gave me a sweet smile.

I bought the sodas, saving $10 with the store coupon.

When we took the stash to the car, Jonathan unloaded the drinks into the trunk, got into the car and turned to me, "Hey mom, do I get my $10 now?" I was incredulous, "What, Jonathan?" He grinned sheepishly, "You know... I gave you the coupon and you saved $10?" I smiled back at him, "Son, do you honestly think that I'm going to PAY you $10 for the privilege of BUYING you some soda? Besides, I used a store coupon, not a manufacturer coupon. " He was busted, "Well, it was worth a try."

Email this to your friends with teenagers and let them in on this way to make money from your kids! If you aren't familiar with ways to incorporate store sales, coupons, double coupons, store coupons, etc, then link onto the "Grocery" label and read the "how to" on my blog!

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

Money Savings Kids!

Well, my kids are getting in on the money savings act--literally! Jonathan went to Texas to visit his older brother, Daniel. While he was there, Daniel and his fiancee', Jenn, decided to give Jonathan "the" money savings tips talk. The took some tips from one of my books and make a short film about savings money! So funny!

Please enjoy watching "The Hendersons" as they teach their son about saving money!

http://youtube.com/watch?v=omPIoJcp6rw

You'll see that the apple doesn't fall far from the money tree!

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