Teaching Financial Values to
Young Children

      A child of age four or five may seem too young to grasp the concept of money management, but even at an early age children can see that money buys things. Any wait at a supermarket checkout line provides ample evidence of "kiddie consumerism." It is important, therefore, to begin as early as possible to help your child understand the power money can have by allowing him or her to deal with money matters directly.

      Does this thought seem challenging? It doesn't need to be. The following suggestions can help solidify your child's understanding of money:

Include your child when you handle money. Have your child with you when you cash your paycheck or pay bills, if possible, and when you make regular deposits to your savings account. Explain comparisons at the grocery store as you buy favorite cereals. Involve the whole family in decisions about the purchase of a new video today vs. putting the money away for a wished-for trip next summer.

Give your child an allowance to manage in his or her own way. An amount received weekly, with the understanding that certain duties are part of being a family member, can help provide security and a chance to succeed or fail and, thereby, learn. Provide enough for necessary expenditures (e.g., school lunches) plus some discretionary funds. Discuss the pros and cons of different ways of using the money.

Provide opportunities for your child to earn extra cash for special events or personal wishes. Talk about whims vs. wants, and give your child regular opportunities to save and, thus, to see how saving can bring more money as interest makes it grow.

Demonstrate the importance of giving. It may be a tough decision to show your child the effects of poverty, but it can help teach two valuable lessons: money is important, and having money can allow you to help others.

      The saying, "children live what they learn" is true not only for instilling good moral values, but also for giving a child the necessary tools for dealing successfully with money. Teaching your children the fundamentals of money now will help equip them with the knowledge to build a financially secure future.

Take "Charge" of
Your Credit Cards

      Because paying with "plastic" has overtaken paying with "paper," here are a few tips to follow when using your credit cards:

• If possible, reduce the number of credit cards that you carry to just one or two.
  
• Store your unused cards in a safe place.
  
• Destroy all unwanted and unsolicited credit card offers.
  
• Use your credit cards only for essential purchases. Try to pay the balance by the due date to avoid finance surcharges.
  
• When you hand your credit card to a salesperson or vendor, always keep it in your line of sight.
  
• Never put your signature on blank charge vouchers.
  
• Don't give your credit card number out on the telephone, unless you have initiated the call and are comfortable with the company requesting the number.
  
• Be aware of where your credit cards are at all times. Report errors and questionable charges immediately.
  

      In today's economy, credit cards are a fact of life. Taking a few, simple precautions can help you build and maintain a sound credit rating—an essential component in establishing a secure financial future.

Keeping Personal Priorities in Focus

     In the rush of day-to-day business activities, many small business owners may find it easy to lose sight of what they had originally hoped to accomplish from their efforts. Over time, as a business grows and an owner ages, personal objectives that may have been suitable at one stage in life often change.

      Do you ever stop to reevaluate and update your personal goals and priorities? The following are among some of the key concerns of many small business owners:

Strengthening Personal Finances and Building Wealth. Many business owners become so engrossed in running their companies that they inadvertently end up putting their personal finances on the back burner. This may come about if most of their liquid assets are tied up in the business. However, to achieve financial independence and build personal wealth, it is important to make personal savings a priority. By conducting regular financial reviews, and taking follow-up action as needed, you can help develop and strengthen your personal financial position.

Preparing for Retirement. Many tax-advantaged, qualified retirement savings vehicles are available to business owners and their employees. The size of a company and the ages and salaries of employees often determine which type of retirement plan is best in a given situation. In addition, nonqualified plans allow you to provide selective benefits for yourself and your key employees.

Developing an Exit Strategy. Will your small business be marketable if and when you decide to sell? It is important to develop an exit strategy that can help provide cash commensurate with the value of your business in the event you choose—or are forced (due to death or disability)—to divest.

Keeping the Company within Your Family. Many closely-held businesses are operated by more than one family member. If you wish to keep your company in your family, it is important to spend some time learning about transfer tax issues and developing a business succession plan that will help secure your long-term goals and objectives.

Staying Focused

      As your company grows and develops, it is important to keep sight of your personal priorities, particularly as they may change over time. An annual review with a qualified financial professional can help ensure that your business activities are consistent with your long-term personal goals and objectives.

Planning Your Estate in a
Second Marriage

      Changes in living situations often call for changes in financial and estate plans. Consider, for instance, how a second marriage could affect your estate plan. This may be especially pertinent if there are children from both marriages.

      One important point to consider is that if you intend to leave assets to your children from a prior marriage, you may want to put them in your own name. Otherwise, new assets acquired in joint tenancy with your spouse will automatically be passed on to your surviving spouse, and then possibly to his or her children.

      You may also want to consider preparing a pre-nuptial agreement. Although this can be a sensitive subject to broach with your intended, it can be an important document to have if you desire to leave most of your estate to your children from a prior marriage.

      As in many financial endeavors, estate planning is not a "do-it-yourself" project. Second marriages, particularly with multiple families involved, may present complexities that could benefit from professional counsel. It is best to work closely with your estate planning team to ensure that your current estate plan fulfills your objectives and is appropriate for your current life situation.