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The Advantage Advisor

Volume 4 / Issue 2 / 2009

In this issue:

Teaching kids about money
It’s tax time
Important client information

Teaching children about money

Young adults are faced with financial decisions earlier than previous generations, which is why it’s important to educate children about money from a young age.

According to recent studies, 43 percent of college freshmen have a credit card and by the time they are seniors that number jumps to 74 percent. Forty-one percent carry a balance from month to month, and 25 percent say they use their credit card to make tuition payments.

Teaching kids about money can start at an early age. While most children under six don’t grasp the concept of money, you can start to introduce them to the subject by giving them a dollar and helping them find something to buy with it.

Once children start elementary school and start learning about money, they can better understand the value of it. This is also a good time to start giving an allowance.

There are two schools of thought when it comes to an allowance: giving an allowance as payment for work performed or giving an unconditional allowance, with the thinking being everyone should contribute to household chores. A possible compromise would be an unconditional allowance with extra earnings for extra work.

If you’re going to give your child an allowance, you might want to use the philosophy: Spend Some, Save Some, Share Some. You can require your child to put away a certain percentage of their allowance to donate to charity and to save. If your child’s allowance is a dollar, it might be good to suggest they put 10 cents aside for charity and 10 cents for savings. Paying your child’s allowance in coins will make this easier.

Requiring your child to set aside some of his or her allowance for savings can help you discuss savings goals. Talk with your child about something inexpensive they want to save for. It’s a good idea to make this something they can attain after a few weeks of saving. If it’s doable for your budget, match whatever your child saves.

If you’re going to give your child an allowance, there are some guidelines you might want to follow. Always pay your child’s allowance on time. Just like an adult relies on their paycheck, your child should rely on his or her allowance. Consider making Sunday night pay day. Your child will have to make it last through the week as opposed to blowing it all in the weekend.

Another good way to teach your children about money management is to get them involved in your routine budgeting activities. If your family is going on vacation, involve your children in determining your vacation budget. Show your children how you pay your bills and balance your check book. Involve your children in budgeting for groceries. If you’re looking to cut your grocery bill, go through store sale ads with your children and comparison shop. Or, let them help you clip coupons and show them how much money you save at the store by using coupons.

Remember, your kids will learn the most about money management from you. Before you start teaching your kids about money, evaluate your money management skills. Consider these questions: Is your approach to financial matters calm and rational? Do you argue about money? Do you feel guilty about money? Do you need money to feel “good enough?” Is money a way to express your feelings?

If you answered “yes” to any of these questions, step back and evaluate how you need to change your money management skills before talking to your children. According Kiplinger, “What you say to your children isn’t as important as what you do.”

Help us to better help you

The ability to deliver quality services to our clients is a top priority at Advantage Credit Counseling Service. The agency has developed a quality statement that summarizes the agency’s quality program. That statement is:

“Advantage CCS strives to ensure that its clients receive exemplary service from every agency employee they encounter.

The Agency utilizes a Quality Program to assure the consistent and effective delivery of services that meet or exceed our customers’ expectations.

The management team is committed to lead the organization in accordance with the Quality Management System and to establish objectives for the continuous improvement of the System’s effectiveness.”

An important component to delivering quality services to each and every client is the timely and accurate distribution of each client’s payment to his or her creditors.

It is very important that clients on the agency’s Debt Management Program include some specific information with their monthly payment. If you are sending a payment to the agency, please make sure to:

Send a money order. The agency cannot accept personal checks.
Make the money order payable to ACCS.
Print your name clearly on the money order.
Include your client identification number on your money order.
Print your return address on the mailing envelope.
Mail the payment to ACCS, 2403 Sidney St., Suite 400, Pittsburgh, PA 15203.

By including this information we will be able better serve you.

Dear Debt Monkey

Q: My credit score isn’t very high, and I want to buy a new car soon. I’ve been reading about how, because of the credit crunch, you need a really good credit score to get a loan. What can I do to boost my score?

A: Your credit score, or FICO score, can range between 350 to 850 points. The higher your score the more likely you are to get a loan and to get a good interest rate on your loan.

There is no fast way to raise your credit score. Your score is comprised of many factors including your payment history, the types of loans you have, the outstanding balances you owe and how much available credit you have.

Negative items, such as a charge-off or a bankruptcy, will remain on your credit report for 7 to 10 years.

Get a free copy of your credit report from www.annualcreditreport.com. Look for any errors that your report may contain and report them to the credit bureaus.

If you have any past due bills, get caught up as soon as possible. Stop using your credit cards and pay down your balances.

Please be wary of companies that promise they can “fix” your credit or remove negative items to boost your score. No one can legally remove accurate information from your credit report, and you can get inaccurate information removed yourself.

Be patient. It takes time to build up a good credit history.

Did you know …

You may be able to get an extension on your taxes?

If you can’t meet the April 15th deadline to file your return, you may be able to get a six-month extension to file from the IRS.

While this will give you more time to file your paperwork with the IRS, it doesn’t give you more time to pay on any taxes due. Not paying can lead to late fees and interest owed.

Visit www.irs.gov for more information, or call (800) 829-1040.

The Advantage Challenge

ACCS is challenging you to ...

Start working on your taxes. The sooner you send in that form the sooner you’ll know if you are getting a refund, or if you’re going to owe Uncle Sam.

If you’re getting a refund, you have a few options. If you don’t have an emergency fund, this would be a good time to start one. You could also put that money towards debt, or divide it between paying down debt and your emergency fund.

If you owe money, work with your budget and create a plan to pay the government if you don’t have the money available.

If you need help finding money within your budget or paying down your debts, call the certified counselors at Advantage CCS for help.

Resources

Tax Questions:

(800) 829-1040 or www.irs.gov

Tax Help for the hearing impaired:

(800) 829-4059

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