Making Financial Literacy a Game Worth Playing!

I know, I know... I say "budget", and you immediately retch in disgust. If I say "spending moderation", "investments", "401K and IRA accounts"... are you equally put off?

You shouldn't be... not if you can make a game out of it.

All of these things tie in together to make your complete financial picture. At first, it may seem a little daunting to comprehend all of these terms, but trust me - when you can roll them off your tongue like the latest football scores or most recent Paris Hilton scandal, you'll be thanking me!

A couple of years ago, I read Rich Dad, Poor Dad by Robert Kiyosaki. BRILLIANT book that showed how financial education starts when you're young. You are programmed from childhood about how to handle (or mismanage) money, and this book clearly illustrated how a rich "dad" educates his children about finances, and how a poor "dad" doesn't (or DOES, through words, actions, and deeds surrounding the subject of finances).

Recently, I became a parent of five (that's a whole other story, Dear Reader!). One of the things that I DID NOT WANT was to become a "poor dad", so my spouse and I worked on a plan to educate our kidlets on how to make, save, and invest money. The key way we have turned our clan into mini money moguls is by playing Cashflow 101.





This game is BRILLIANT. It introduces all to the concepts of a balance sheet, investments, stocks, doodads (unnecessary expenditures), money management - all in one board. My kids now play it on their own - we started playing it once a week on Family Night (it's a LONG game, so be prepared to set aside at least 5 hours the first go-round), but then, at various times of the week, I kept hearing, "Hey Jazmine! Can you come and play a quick game of Cashflow with me?" or, "Leon! We're setting up Cashflow - get the calculators!". Mind you - my kids are 15, 14, 12, 10, and 7, but they play with a vengeance. It's all out financial war when they sit down; they are so familiar with the educational aspects and concepts introduced, that now, they play for fun (actually, they play for financial DOMINANCE. They're vicious, this group... truly vicious!)

Cashflow 101 is a game played at most Real Estate Investment Association groups, so if you don't have a clan at home to play with, you can find a group in your area. This game is KEY to understanding how to manage your financial life - it's a must buy!

P.S. Cashflow 101 is meant for ages 13 and over. The game Cashflow for Kids is available to teach youngsters how to manage and grow money, and Cashflow 202 introduces advanced investment concepts, such as 1031 real estate exchanges and Call/Put investment options. We've graduated to 202, but we still don't allow my 7 year old, Nicholas, to play 101 yet. That pisses him off, but doesn't stop him from leaning over Dad's shoulder and offering investment advice. They don't even like to play Monopoly anymore. "Too slow," they say.

P.P. S. If you're spending your time focusing on Paris' weekly shenanigans and not your financial well being, shame on you!

Budgeting: A Tough Love Way to Handle Your Household Budget

Found a great article on budgeting to get you started!

Budgeting: A Tough Love Way to Handle Your Household Budget
By Douglas Hanna

Developing and living by a household budget is by far the best way to get your expenses under control which, in turn, can mean a much less stressful life.

However, many families find it very difficult to stick to a budget. It does take hard work and a lot of self-discipline, at least in the beginning. The good news is that most families find the longer they can stick to a budget, the easier it becomes. This is because sticking to a budget eventually becomes an unconscious habit, just like driving a car. And once it becomes a habit, the budgeting process just sort of goes on cruise control and requires much less thought or effort.

But what do you do during those first three, four or six months, when sticking to a budget feels so difficult?

There are several answers to this. The first is to make sure your budget categories are realistic. You may think you can get by with $100 a week for groceries, but is this real? Do you have checks or receipts that verify how much you have been spending at the grocery store? You really need to know. Otherwise, you may budget too little. In turn, this becomes frustrating because you will always be over budget.

Second, make sure you have all categories covered. There are some categories that are easy -- rent, mortgage payment, utilities, car payments, etc. But think hard about all other categories such as clothing, eating out, prescriptions, pet care, tuition, books, allowances, movies, CDs and DVDs, and computer software and games, to name a few. If you don’t budget for all these kind of expenses, I promise they will bust your budget.

Finally, if you find you just can’t seem to stick to your budget, here’s a sort of tough love answer.

Go to your nearest office supply store and buy a box of #10 envelopes. Take them out and label one for each of your budget categories. Then write on each envelope the amount you have budgeted for that category.

For the purpose of this exercise, it is not necessary to break down general categories into subcategories. For example, you can label one envelope “entertainment” and not worry about envelopes for “movies,” “eating out,” “DVDs,” etc. Just be sure the number you write on the envelope for any general category represents the sum of all its subcategories.

When you next get paid, cash your paycheck and bring it all home in $50, $20 and $10 bills. Then put and amount of cash in each of the envelopes equal to the amount you budgeted for that particular 6category.

Now, as you need to pay bills or buy groceries, etc., use the cash in the corresponding envelopes to pay them. You will know when you have reached the budgeted amount for any category because its envelope will be empty. What do you do when you find an envelope is empty? You do nothing. That category is all finished for this pay period. If the envelope is empty and you still have expenses, either you haven’t budgeted correctly or you have overspent. You might be able to fudge and take funds from another category envelope. For example, if you have a week to go and are $40 short for groceries, you might be able to take the $40 out of the entertainment envelope. Just keep in mind this means $40 less for entertainment.

Do this for a few months and I promise you will not only learn to budget accurately, you will learn to stick to your budget.

Douglas Hanna has lived in the Denver area for nearly 35 years and is an expert on both Denver and Colorado. He is also the author of more than 120 articles on Denver and Internet marketing.

Article Source: http://EzineArticles.com/?expert=Douglas_Hanna
http://EzineArticles.com/?Budgeting:-A-Tough-Love-Way-to-Handle-Your-Household-Budget&id=50295

Book Recommendations: Budgets for Beginners

For beginning budgeters (meaning, those who have never created a budget before AND those who think the word "budget" is a dirty word), I recommend the following books:

In the "For Dummies" series:
Personal Finance for Dummies
Frugal Living for Dummies

Now, some may think the "for Dummies" title is a bit harsh, but I find their books EXTREMELY helpful, well written, and well organized. They always take you step-by-step to achieving WHATEVER is on the book cover.

In the "Complete Idiot's" series: (another one of those "yeeesh!" titles, but good info!)
The Complete Idiot's Guide to Personal Finance with Quicken

I am a QUICKEN JUNKIE. I find that, once you learn how to maneuver through the software (not hard at all!), you can use it to effectively manage every aspect of your financial life! It's got alerts, stock tickers, online bank downloads, budgets, IRA trackers... everything you need to get your money straight.

There will be more book recommendations on all aspects of finances, including budgeting. We start here first, however, because you MUST understand where you are to see how to get to where you're going.

Get the books first, read the info, then try the software. One step at a time!