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So What Exactly Are these Health Reform Exchanges Things?

2013-09-24 20:14:57 healthday

A new way of shopping for health insurance is coming to your state.

Beginning Oct. 1, consumers can use a new health insurance exchange in their state to apply for health coverage. Depending on when you enroll, that coverage could kick in as early as Jan. 1, 2014.

The exchanges are the centerpiece of the Affordable Care Act, the Obama administration’s landmark health reform law, and are primarily intended to help uninsured Americans and small businesses find affordable health insurance.

Each state exchange will act like a shopping mall for health insurance. Uninsured workers can go to the exchange to buy a health plan. Individuals and family members can find out if they are eligible for Medicaid or the Children’s Health Insurance Program.

The state exchanges will help mainly two groups: People who earn too much to qualify for Medicaid but not enough to easily pay for health insurance on their own, and people living just above the poverty line — up to 138 percent of the federal poverty level — in states that aren’t expanding their Medicaid programs.

Each state will also have a “SHOP” — Small Business Health Options Program — exchange. This is where small businesses that decide to offer group health insurance can select coverage and where their employees will go to sign up.

But as the new system rolls out and consumers begin to wade through the new health insurance options, experts say there’s bound to be a steep learning curve.

“It’s definitely going to take a while for people to get their heads around this and understand, for me this path makes sense or for me this path does not make sense,” said Linda Rowings, chief compliance officer at United Benefit Advisors, an Indianapolis-based provider of employee benefits advisory services.

Here’s an easy-to-understand guide to help you get started:

What’s a health insurance exchange?

A health insurance exchange is an electronic marketplace where people can buy health insurance or enroll in public health coverage.

Each state and the District of Columbia will have one.

How can the exchange help me find health insurance?

You can use the exchange in your state to compare health plans and prices, much like you would if you were shopping for a major appliance, hotel accommodations or airline tickets. Many people who apply for health insurance will be eligible for federal tax subsidies to lower their cost of coverage.

Each state will also have an exchange where small businesses can shop for coverage for their employees. Once an employer signs up to provide coverage through the Small Business Health Options Program, employees may use the exchange to enroll in a health plan.

If you or your family members are eligible for free or low-cost health care through a public health program, you will be connected with Medicaid or the Children’s Health Insurance Program.

Do I need a computer?

Not necessarily. Beginning Oct. 1, the exchanges will operate toll-free call centers and have trained individuals available in your community to help you understand your options and enroll in health coverage.

But if you’re computer savvy, you can go online to review your options and enroll in a health plan. You can also pose simple questions via an online chat on HealthCare.gov.

Do I have to use the exchange?

No. You may buy health insurance outside the exchange. But you will only qualify for federal tax subsidies to lower your premium if you buy coverage through the exchange.

What if I don’t want health coverage?

Under the health reform law, most U.S. citizens and legal residents must have health insurance or pay a fine. Each uninsured person who doesn’t have an exemption from the law will owe a flat fee or a percentage of income, whichever is greater.

The penalty is $95 per adult, or 1 percent of taxable family income, whichever is greater, in 2014. That will rise to $325 or 2 percent of taxable income in 2015, and $695 or 2.5 percent of taxable income in 2016. Beyond 2016, the flat fee will be adjusted annually for cost of living, although the share of family income will remain at 2.5 percent. The cost for children is half the adult fee.

The maximum penalty for a family of three or more is $2,085, or 2.5 percent of taxable income.

What if I can’t afford health coverage?

Beginning in 2014, consumers with incomes between 100 percent and 400 percent of the federal poverty level can qualify for tax credits to reduce the cost of coverage they buy through the exchanges.

The amount of help will vary by income, family size and the type of coverage selected. In general, the lower a person’s income, the greater the tax credit.

A family of four earning $47,100 — or two times the poverty level — would not have to pay more than 6.3 percent of their income, or $247 a month, toward the premium, according to an analysis by the Center on Budget and Policy Priorities. That’s based on 2013 data.

The law also helps with out-of-pocket expenses, like deductibles, co-payments and co-insurance. People with incomes below 250 percent of the poverty level — or $28,725 for an individual and $58,875 for a family of four — may qualify for cost-sharing assistance from the federal government.

What if I already have health insurance?

If you have a health plan that meets minimum coverage requirements, say, through your employer, or you are on Medicare or Medicaid, you comply with the law’s so-called individual mandate that requires most people to carry insurance. You don’t need to use a health exchange.

Where can I find my state exchange?

The exchanges have names like New York State of Health, Covered California, kynect (in Kentucky) and MNsure (in Minnesota). To find your exchange, go to the federal government website HealthCare.gov.

Some states, like Florida, are not running their own exchanges, leaving it up to the federal government to do it for them. Other states, such as Illinois, are setting up exchanges in partnership with the federal government. In these states and others that are not building their own exchanges, you can go to HealthCare.gov to apply for coverage.

How do I apply for coverage?

You complete an online or paper application. Make sure you have current income information (such as pay stubs or W-2 forms) and Social Security numbers for you and members of your household. If any members of your household have health insurance, you will need the policy numbers of those plans.

Where can I get help applying for coverage?

The federal government has invested millions of dollars in grants to train people who can walk you through your health insurance options.

Depending on where you live, you may be able to get help at your local health clinic, library, church or other community-based groups. Contact your health exchange for information on where to get help.

What’s the deadline for signing up?

Open enrollment for 2014 begins Oct. 1 and ends March 31, 2014.

If you enroll in a private health plan by Dec. 15, 2013, your coverage will take effect on Jan. 1, 2014. During the remainder of the open enrollment period, you may enroll in a health plan but the effective date will be delayed.

After March 31, you may apply for private health insurance through the exchange only under special circumstances, like a birth, job loss or divorce. (Open enrollment for 2015 begins Oct. 15, 2014.)

You may apply for Medicaid or the Children’s Health Insurance Program at any time during the year.

Small employers may offer coverage through the Small Business Health Options Program at any time during the year.

Other questions?

The U.S. Department of Health and Human Services has launched a new toll-free consumer hotline to answer your questions about the exchanges. Call 1-800-318-2596 or (TTY: 1-855-889-4325).

This brochure from the U.S. Centers for Medicare & Medicaid Services tells consumers how to get ready for the new health exchanges.

More information

Visit HealthCare.gov to learn more about the new health insurance marketplaces.

To read a HealthDay story on the Affordable Care Act’s potential impact on young adults, click here.

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Don't be taken in by charity scams

2013-07-19 19:59:59 consumer-reports

The Coalition Against Breast Cancer sounds like a charity worthy of your support. And a lot of donors felt the same way, contributing millions of dollars to the group. But just because an organization has a worthwhile name, doesn’t mean it’s doing much, if anything, to further its charitable cause.

Saying that the coalition was nothing more than a sham being used by one of the state’s largest professional fundraising firms, New York Attorney General Eric T. Schneiderman recently obtained a court order requiring the firm to pay $3.1 million in restitution. The recovered money, which is in addition to a separate $1.55 million judgment against the defunct charity’s directors in April, will be distributed to legitimate organizations that fight breast cancer, Schneiderman said.

The case is just one of numerous actions states have been taking recently against charities and fundraising firms that officials say misused money donated for charitable causes. They underscore why it’s as improtant as ever to check out charity before giving.

Here are some other recent cases:

A Florida-based non-profit group has agreed to stop charitable solicitations in Ohio and pay a $44,000 fine after that’s state’s attorney general, Mike DeWine, accused it of collecting $19,000 in recycled clothing and diverting most of the money to a for-profit business. The money was supposed to be used for environmental causes.

•A New Jersey court has approved a settlement that will designate a new administrator to distribute an estimated $334,000 in contributions to the Hurricane Sandy Relief Foundation. The state had accused
two of the group’s principals
with diverting more than $13,000 in donations to their personal accounts and misrepresenting that contributions to the group were tax deductible. Under the agreement, the group will be dissolved after the remaining amount is distributed.

• Arkansas Attorney General Dustin McDaniel has filed a lawsuit against a New Jersey-based non-profit group and its Arkansas-based fundraising partner, accusing them of misleading the public into believing that donated money would be used to benefit the state’s emergency responders. Of the more than $231,000 raised in the state, only $500 went to charitable purposes, McDaniel alleged. The complaint says that telemarketers misrepresented themselves as police officers, firefighters, or other first responders.


WHAT TO DO

Here are some tips to avoid being a victimized by a phony charity:

Never give to charity on impulse. That’s especially important if you’re contributing a significant amount. Check out the group thoroughly, starting with the charity watchdog groups, Charity Navigator, CharityWatch and the BBB Wise Giving Alliance ). If it’s a regional group, your local Better Business Bureau may have done an evaluation. For more information on charity watchdogs and charitable giving, read from the Consumer Reports Money Adviser.

Avoid professional fundraisers. If a telemarketer calls you soliciting a donation, hang up. You need time to research the group. And by giving directly to the charity, you can avoid having a piece of your donation go to the fundraising firm.

• Consider giving through a federation. A fund-raising federation, such as the United Way, screens participating charities for you. That can be especially helpful if you’re considering giving to a local organization that hasn’t been evaluated by a charity watchdog.

Be extra careful during emergencies. The suffering caused by earthquakes, tornadoes, floods, and other catastrophic events demands immediate help. But emergencies also bring out scam artists out to make a quick buck by creating bogus groups. Even if it’s a legitimate charity, a particular group may not be in position to help in a given emergency. Often government websites list charities that are or will be providing relief in the current crisis. Or stick with well-known organizations, such as the American Red Cross. For more advice on giving during emergencies, read the Consumer Reports Money Adviser story .

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Why Summer Is A Good Time To Talk Cash With Kids

2013-07-09 16:00:00 your-money

Copyright © 2013 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

MICHEL MARTIN, HOST:

We’re switching gears now. Back here in the U.S., most young people and their parents are settling into summer routines. For younger children, that means summer school or visits to grandparents or camp. But for many teens, that can mean a first job and a first paycheck. And for many parents, that can mean a great opportunity to impart some lessons about financial management and financial discipline.

In a minute, we’ll check in with some of our regulars and our parenting roundtable to hear about how they’ve been doing this or how they wish they were. But first, we want to speak to our money coach Alvin Hall. He’s written a number of books about financial literacy, including one for kids. Alvin Hall, welcome back. Thank you so much for joining us.

ALVIN HALL: Glad to be here.

MARTIN: So I’m thinking about my first summer job – I thought I was rich. And I thought that money was mine, mine, mine, and I was not terribly interested in anybody else’s opinion about how I should spend it. So first – the first question I wanted to have for you, or allocate it I should say, is there kind of a first conversation you think parents should be having with their teens before they start that job?

HALL: Yes. They should be having a conversation about the importance of saving money. You can spend part of what you own, but you need to also save part of the money you earn so that you can build something toward the future.

Most parents think that kids are fairly naive about money or learning the lessons early on, but in reality, kids have been observing the parents’ actions all along. And talking about savings and making it a priority is very important.

MARTIN: You know, there are people who have the argument that letting your kid make the wrong choices about money or just kind of figure it out for themselves, particularly with that summer paycheck, is really the best way to let them figure it out for themselves because if they, say, blow it all on sneakers in the first week and then have to borrow money for the bus, then that’s a powerful lesson. What do you say to that?

HALL: I say that is a powerful lesson, and they’re going to make that mistake whether you are on message or not. So you can say, save, save, save, but they may choose not to. If they fail, let them fail. But do not try to pick up the pieces for them because they will gain the wisdom that failure. But it’s important, Michel, for the parents to be consistent in the message that they give the child.

MARTIN: Well, what do you mean by that? Like, tell me a little bit more about that.

HALL: So although the child may not be saving, you need to say, why aren’t you saving? You know, this is important. You can spend part of your money, you can save part of your money. What are you using the money to – what are you spending your money on? Have you set priorities?

I think it’s important for parents to ask simple straightforward questions. The child may not have the types of answers that the parents want, but it will at least start them to think about these things.

MARTIN: Well, you know, I have to tell you that – and I’m sure you know this – that a lot of people will just find this very conversation ridiculous, you know…

HALL: I know.

MARTIN: …Because in a lot of cultures it’s just assumed that a child is going to turn that paycheck over to the parents.

HALL: Oh, I know.

MARTIN: Right, that’s just an assumption. So even if you are not part of that kind of mindset, do you think that parents should enforce savings? I mean, should you start out by saying, you know, we’re opening this account, if you don’t have an account already, and this much is going into the savings or whatever, you know, half or something like that, or whatever you deem appropriate, or set a specific sort of savings goal. I mean, do you advise parents just to make it a rule?

HALL: Yes. I do advise parents to make it a rule, but don’t be surprised if your child decides to rebel in some way, in some small way, to show their independence. But I do think it’s a rule. But I was raised where I had to contribute to the household. When I got my first job, my mother made it imperative that I had to give her part of my money, and I did not like that at all.

But from that, I learned a very, very important lesson that became useful to me many years later. And that was about how to allocate my money. My mother and I, we would often just sit there and I would steam when I would have to give her my money that I had worked so hard for. But in the long term, it did prove to be a very, very good lesson about how to allocate my money toward necessities and then use the rest of it to get some of the things that I wanted.

MARTIN: If you’re just joining us, I’m speaking with our money coach, Alvin Hall who writes about and teaches about personal finance. He’s written a number of books about financial literacy, including one for kids. We’re talking about summer jobs and teens, and whether teens can learn lessons about financial management from that first summer job and that first paycheck. And I’m glad you’ve raised this question, though, because it is important to point out that a lot of teens work summer jobs, not because they necessarily want to, but because they have to or they feel that they have to, and it really is expected that they should contribute to the family economy, you know, overall.

I’m wondering if you have some opinion about how much of that should go into kind of the family pot. I mean, ’cause some kids really – literally do turn over the entire paycheck. I mean, do you think that that’s OK, or do you think that kids should – this is kind of a lesson for parents now – do you think that you should allow the child to have some of that money for himself or herself?

HALL: I think it’s fair to allow the child to have some of that money for themselves. After all, they’re going out, they’re doing the work, they should have some of the reward from that. My mother would’ve argued, your reward is living in my house, and I understood that. But over time, we negotiated it so I did get to keep some of the money. And I think that’s fairer to the child.

MARTIN: How much?

HALL: And also…

MARTIN: How much? Do you have a rule of thumb about that?

HALL: …I think you negotiate that. No. I think you negotiate that depending upon the family’s needs in the end, and how much you think the child will need day-to-day. So letting the child keep a quarter of that money or half of that money seems to be within the realm of reason. Anything less than a quarter or 20 percent seems almost churlish and unfair to the child who’s actually going out and doing the hard work.

MARTIN: What about the other side of that question which is, families who are affluent, who don’t need the child to contribute to his or her basic support. Do you have some thoughts about how that should be handled? I mean, I know a lot of kids, for example, you know, my working assumption is a lot of kids, what they want that summer job for – I mean, some kids look, it’s clear, you are saving for college.

HALL: Yes.

MARTIN: You might not be saving for food and shelter, but you’re definitely saving for college.

HALL: Yes.

MARTIN: But for kids for whom it’s maybe not as pressing a concern, do you have an opinion about how that money should be spent or what kinds of conversations those families should be having about that money?

HALL: I do have an opinion about this because I have several friends who have children who are in exactly this situation. The parents are very well to do, they work on Wall Street, they own companies, so the child saving for college is not an issue. What they mostly talk about it is, what are your priorities? What do you want to buy with this money? What goals do you have with this money? And they sit down with the children and they talk about what things are important to you to buy with this money.

If they want to use it to go to concerts, that’s fine. If they want it to use it to take a trip with friends or a field trip, that’s fine. But they have the children set some goals, both short-term for the summer and perhaps some longer-term goals, so they have a little money sitting there for opportunities that come up during the school year that the child may want but the parents may not want to pay for.

MARTIN: I think one of the reasons, though, some middle-class kids get a job is so that they can get veto-proof stuff for themselves.

HALL: Absolutely.

MARTIN: Which is a term that our editor Alicia Montgomery uses.

HALL: Yes.

MARTIN: I have a feeling that she’s talking about somebody she knows very well, like herself. And things that perhaps her parents might not approve of, like particular clothing, a particular piece of electronics or something like that. I’m just wondering, do you have an opinion about that?

HALL: I think the money that the child keeps for himself or herself, you cannot really control what they spend. You can put some limits on it, but it is their money. And one of the big lessons that I’ve took away from a lady who worked for me many years ago, her name was Virginia White, she said that when you’re young, you spend money getting to know who you are and what your tastes are.

So your child doing that is part of the growth experience. You can’t shape them completely as a parent, some things they have to learn on their own. And buying that tube top or those trainers, that you may hate, is part of that learning process.

MARTIN: Well, I think some people’s learning process might be that those people who wear saggers don’t live in my house. I mean, I think that that could be part of the training process that some people have.

HALL: Yes. And when people put those limitations the child, you know, can rebel and try it and the parents can’t stop them. In my parents’ house, you were not permitted to wear jeans. It was just unacceptable to wear blue jeans at my parents’ house. And when I bought my first pair, I actually hid them from them, so they didn’t have to know. And I wore them outside, but I wouldn’t violate the rules.

So I think that’s part of getting to know your taste. There has to be give and take on both sides. Just because the child is earning the money as an – teenage years, where there’s going to be some rebellion there, they must remember that they are living in their parent’s households and their parents do set the rules.

MARTIN: I do have to ask you though, about people who might be listening to our conversation and might be saying, you know what, I’m not that good with money either. And…

HALL: Yes.

MARTIN: …You know, and as you said, you know, your parents are teaching even when they don’t think they’re teaching…

HALL: …Yes.

MARTIN: …And they’re setting an example even when they might not think that they are. What if you have a scenario where you know that you’re not terribly good with money and the child knows that you’re not terribly good with money and then, you know – obviously relationships are involved here and how you talk to each other are involved here – but how do you deal with a kid who says, look, I might have better ideas about spending money and saving than you do. I’m reading Money Magazine and you’re not.

HALL: Michel, when you mention this, I had this completely autobiographical flashback to my childhood. My mother once inherited some money and within six to eight weeks the money was gone. I still remember my grandmother looking at my mother and just shaking her head that my mother had spent all this money. My money – my mother was very bad at handling money.

And sometimes it’s best for you, the child, to look at another relative. So I looked at my grandmother, I looked at an uncle, and I looked at a family friend who was a better person at managing money. And sometimes I would actually talk to my grandmother about – why do you think my mamma is so bad with money?

And my mother would say – my grandmother would say – she doesn’t like to think about it, and – but you need to learn to think about money. So it was from those simple lessons, by looking at family friends and other people in your community, that you can learn good takeaways.

MARTIN: And finally, though, you know, it used to be that saving was straightforward. You know…

HALL: Yes.

MARTIN: …You’d put your money into the bank, you’d get a passbook, you watch your money grow, or you look at it on a computer. Interest rates are not high now.

HALL: No.

MARTIN: So what do you say to a child who is relatively sophisticated, right, who is reading the magazines or the, you know, financial pages and says, well, that’s a loser, you know, I’d be better off putting my money into Nikes and, you know, getting a secondary market on those. What do you say?

HALL: If there is a sophisticated secondary market for certain types of Nikes. I’d say to a kid like that, you need to have a safety cushion. You need to think about what money you’re going to need in the middle of the school year, later on in the year, when something could happen to you.

Buy what you want to now, but please put some away so that you can have that little safety cushion because maybe there’ll be a period when I may not have that money and you may need it badly and you can do this for yourself. It’ll be maybe your first act of real independence.

MARTIN: OK, what’s the dumbest thing you ever bought with your summer money?

HALL: Oh, I can still…

MARTIN: Fess up.

HALL: …In August, we used to have to go shopping and I really wanted a jean jacket. I wanted it so badly. And I bought this jean jacket, and my mother looked at me as if I had lost my mind. I have never forgotten it.

MARTIN: You did.

HALL: And she did not say, don’t wear it. But every time I put that jean jacket on, her look would just level. And eventually I just stopped wearing it.

MARTIN: I don’t blame you. Alvin Hall writes about and teaches about personal finance. He was with us from NPR studios in New York. Great speaking with you Alvin. Thank you.

HALL: Great talking with you.

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Kids Bring Home The Bacon: What They Need To Know

2013-07-09 16:00:00 your-money

Copyright © 2013 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

MICHEL MARTIN, HOST:

I’m Michel Martin and this is TELL ME MORE from NPR News. They say it takes a village to raise a child, but maybe you just need a few moms and dads in your corner. Just about every week we check in with a diverse group of parents for their common sense and savvy advice. We wanted to continue this conversation about teaching kids about money, especially when they get that first summer job.

We know that the last thing teenagers generally want after getting that paycheck is getting mom or dad to tell them how to spend it. So those are not easy conversations, so we thought this would be a good time to bring in our parenting roundtable for some more real talk about money. With us now are three of our regular contributors. Dani Tucker is an office administrator, fitness instructor, and mom of two. Leslie Morgan Steiner is author most recently of “Crazy Love” and a mom of three.

Lester Spence is a name you often hear in our barbershop roundtable on Fridays, he’s an associate professor at Johns Hopkins and he is a father of five. Also with us is Isra Hashmi, she’s founder of the blog “The Frugalette” and a mom of three. Welcome to you all, thank you so much for joining us.

DANI TUCKER: Thank you.

UNIDENTIFIED PANELIST 1: Thanks, Michel. Hi.

UNIDENTIFIED PANELIST 2: Thank you.

MARTIN: Dani, I’m going to start with you because you were telling us that – you’ve told us before, I think, that your kids each got their first summer job at 14. Did you want them to work? Or did they want to work? And did you have conversations with them about what would happen with that money?

TUCKER: Yes, yes, yes yes. Forgive me. I’m getting over walking pneumonia so I sound like Wolfman Jack.

MARTIN: I’m sorry.

TUCKER: But yes, I worked at 14.

MARTIN: You worked at 14? So 14 was the age at which you…

TUCKER: Yes, because D.C. has a summer job program, which is awesome. Yeah. So they were excited.

MARTIN: What conversations did you have with them about the money? Did you have some kind of guidelines set out at the beginning and what were they?

TUCKER: Yep. This is God’s cut. This is my cut. That’s your cut. Go to work. It’s real simple. God’s cut, my cut, go to work.

MARTIN: Was there any pushback?

TUCKER: Are you serious?

(LAUGHTER)

TUCKER: With me? You already know.

MARTIN: Leslie, what about you? Your kids are 16, 14, and 11.

LESLIE MORGAN STEINER: Yes.

MARTIN: And, I think, you’re not shy about pointing out that they don’t have to work. I mean, it wasn’t required that they contribute to the family household.

STEINER: That’s true.

MARTIN: But why did they want to work and what did you think about it?

STEINER: Well, as you mentioned, my particular challenge is that my family is privileged in our economic stability. But just like Dani’s kids, my kids in their own way, are very motivated to work. My husband and I both went to business school and we’re very supportive of them earning their own money and it’s a great way for them to learn the joys and values of money. So my older kids, 16 and 14, they both work. Now it’s not a daily summer job, but our daughter is very industrious.

The 14-year-old, she got her babysitting certificate from the Red Cross when she was 11. And she is the neighborhood babysitter and boy does she rake in the cash. You know, $80 a night is easy for her. And she’s a big saver, too. So she puts a lot of money in her savings account, which I set up for all of the kids when they were about six. And then our 16-year-old is a basketball player and he is not quite as hardworking as his sister, but he is a very active participant in this sophisticated secondary basketball sneaker market. And he buys and resells these, you know, really expensive, colorful, crazy basketball shoes and he too, has made a lot of money and saved it. So they both are earning the value, although it’s not quite the same as going out and working at a job where you, you know, get a paycheck every week.

MARTIN: Well, what do you have to say about what they do with that money? Is the conversation that you have – I’ve got covered what you need, but you’ve got to take care of what you want? Are they expected to save a certain amount? Are they expected to save to buy something special that they want that you don’t want them to have? What do you say about that?

STEINER: Well, their money is for special things that they want to buy that I will not buy for them. But also, I have, without too heavy a hand, I have really encouraged them to save. It’s something that my own parents did with me and it’s, you know, with a light touch, I’ve gotten them to put a lot of their money in their savings account with the idea that, you know, the candy and the t-shirts from justice are not going to be around in five years. But if you save and save and save you will be able to buy a car or my daughter, the 14-year-old wants to buy, you know, a New York City apartment.

MARTIN: OK.

STEINER: God, love her. So, yeah. They save. I don’t force them to, but I pressure them to.

MARTIN: OK. Lester, what about you? You have five kids and your oldest is old enough to work right now.

LESTER SPENCE: Yeah, in fact, I think she’s serving coffee now. I think she’s working now, as we speak. You know, what I did was – with her was – and with all my other children, I just try to model good behavior, right. So I don’t have a cell phone. I don’t – I very rarely, you know, I play video games. I try to buy video games like a year after they come out when they’re cheap, just to show my kids the benefit of being frugal.

My daughter has been – she loves concerts so she uses her money for concerts, but she’s also – she’s taking summer classes now and she paid for her summer classes with her tuition. So I’d like to have more explicit conversations with them going forward, but she’s been really good with her money. I’ve been really proud of her.

MARTIN: Well, is that – I mean, with five kids you’ve got to have lots of different personalities. Do they vary in terms of the kinds of things they want and like, and how do you manage the fact that maybe one child might be a good saver and the other kid’s a spender?

SPENCE: So there I’m pretty forceful, right. So I have one kid who, every time, is like no, I want to buy something, I want to buy something, I want to buy something. But in my household, even though I’m liberal in some ways in my politics, as far as – they still have to come to me. Even if that money is in their account through their grandparents, they still have to come to me to OK all their purchases. At least, you know, the younger ones – my daughter is a different category.

MARTIN: All their purchases.

SPENCE: All their purchases.

MARTIN: There will be no tube tops in the Spence household.

SPENCE: Like I said, I’m a Democrat with a small D, but in the house, it’s a monarchy.

MARTIN: Isra, what about you? You write about taking your family from what you call fancy to frugal in a few years, why is that?

ISRA HASHMI: Hi, Michel. Yeah. So I grew up completely not being frugal. I was, you know, privileged, I guess you could say, growing up. Everything was bought off the rack, anything we wanted, best schools – I mean, my schools in elementary were, you know, as much as universities are now. I had no idea of how things cost and I just spent and spent and spent. And then I got married and I didn’t have my parents’ money anymore and I was kind of left out to dry and I got scared.

And my husband grew up the same way – no idea, no value for money. And we just started maxing out credit cards and we ended up moving to Boston from Tucson – very, very expensive city. I was pregnant with my second and we went to the grocery store and I couldn’t pay for diapers, and I got really scared that – what are we going to do? And that’s just – that was my catalyst for just changing our lifestyle completely. Literally, 180 degrees – it’s totally different. That was four years ago. And we have a third baby and I’m happy to say nothing was bought on credit, we actually have no credit cards. We got ourselves out of $56,000 debt on one very small income that my husband was getting from his stipend.

SPENCE: That’s a book.

HASHMI: And now I go back and say, I’m going to do things differently, a lot differently with my kids. And they’re young. I have three under seven and I think having the conversation starting at, you know, two – three is excellent, past second grade it’s already too late.

MARTIN: Really? Well, talk about that. What kind of conversations do you have? I mean, do you, you know – ’cause kids at that age have very little concept of the intangible of – what is real to them is what they see, you know.

HASHMI: Exactly.

MARTIN: So what kinds of conversations do you start having even that young?

HASHMI: You know, starting at 18 months, two years – once they realize they can take something out of the store and take it home is when you start to understand that, you know what, they’re getting that they can have this thing. But what they’re not getting is that middle part, which is we’re giving money to get this thing. So we – I mean, I have a two-year-old right now and she understands when we go to the store and I will tell her, we don’t buy right now, no buy.

You know, you have to take it down a level and it’s a conversation that starts young and really ends never, it just progresses as they get older.

My seven-year-old, you know, we do allowance, but I don’t do allowance just for, you know, being alive or, you know, just living in the house. I don’t get, you know, a paycheck for just, you know, sitting on the couch and doing nothing. I would love it, but that’s not reality. And I don’t want them to think that’s how money comes either. So they have, you know, their responsibilities, their chores. At the end of the week, if everything is done, just like a paycheck, they can get their allowance.

MARTIN: That’s how it is. So no allowance, but you can do jobs around the house. Dani, what about you? Where are you on the allowance question? Did your kids ever get an allowance?

TUCKER: Yeah, I allowed you to live in my house. That’s their allowance. That was their allowance.

(LAUGHTER)

TUCKER: No, you ain’t getting no money from me for doing no chores. I didn’t get no money from my parents for doing no chores. Like my father said, I allow you to eat. I allow you to sleep. There’s your allowance – go to work.

MARTIN: Where are you on the whole question of discretionary items, like we were talking about earlier – the veto-proof items. Is the idea for the kids, if there’s something that – if they’ve satisfied your other requirements like God first, me next, the house next…

TUCKER: No, I still have to veto-proof because, you know, like I always tell my kids, Prada does not pay your rent so stop paying his. OK. Prada don’t pay your rent. So why am I going to Prada’s? He got more money than we got. So they’ve learned, but at the same time, I don’t keep it because, you know, they work hard, especially when they accomplish something and they’re like, OK, Ma, you know, I really want to get these Nike’s. Get them, because there’s got to be some reward, you know. So I do, but you won’t roll Nikes in twice a month. No. You know, once a quarter, twice a year, maybe, you know, when they go on sale, but other than that…

MARTIN: Lester.

SPENCE: Real quick. I grew up struggling. My parents, I remember, I want to give an apology to my dad, ’cause I remember that there was a moment where my mom was like, I will give you a dime allowance for every year you were. And I was like ten, so it was, like, a dollar a week and there were several weeks that I didn’t get my dollar. I started calculating, right. I remember telling my dad, Dad, you owe me. And I now understand on the other side, right. Like, man, Dad, I am so sorry.

MARTIN: He owes you a lot of interest now.

(LAUGHTER)

MARTIN: Do you – Lester, do you give your kids an allowance?

SPENCE: No, no. But, I mean…

MARTIN: I hear a t-shirt line coming to the floor here. Your allowance is living in my house.

SPENCE: Yeah. I like that, I like that. I wish I could, but my loot just doesn’t allow for it right now. It just doesn’t allow for it. So what I plan to do is teach them ways to make their own money, but shoot, I’m in the position my dad was when I was a kid.

MARTIN: Leslie, what about you? Where are you on the allowance question? ‘Cause some people really believe in it and some people really don’t.

STEINER: I have off and on, since my kids were very little, given them a weekly allowance, some small amount. And it’s their job to ask for it and to keep track of it. And so, yes I believe in it. I don’t think that it’s an answer to anything. It’s not a silver bullet to teaching them about money. And right now, they have – my older kids have a clothing allowance, which is quarterly and, again, they keep track of it, ’cause I think it’s important for them to have an allowance so they know that there’s a limit and to make their own spending decisions.

And I also got tired of them just coming to me – can I have this, can I have this, can I have this? And I want the ownership to be on them. And it’s fascinating that they spend so differently. The 14-year-old daughter is very steady in how she spends and our son’s sneaker business came out of his allowance. His first pair sneakers was with allowance money and then he wanted more, and we wouldn’t pay for any more. And so that’s how he got into the resale sneaker business, to fund his own obsession with sneakers, which is fine. He’s learned a lot of good lessons.

MARTIN: If you’re just joining us, our parenting roundtable is talking about how they teach their children how to manage money. With us are our regulars: Leslie Morgan Steiner and Dani Tucker and Lester Spence – you often hear him on our barbershop roundtable. Also with us, Isra Hashmi. She writes thefrugalette.com, a blog. That’s fascinating. And so, Isra, you were saying you do do allowance or you don’t do allowance?

HASHMI: I do. I’m kind of, you know, the back-and-forth, too, a little bit. I mean, there’s no, you know, hard you have to do it every week, but when they do start, you know, asking every time you go into a store, can I have this and can I get this, you realize, you know what, that’s something you need to start deciding for yourself with your own, you know, little bit of money that you get.

So for my seven-year-old, you know, he doesn’t ask as much now when we go to the store because he’s starting to realize that if I buy this with the money I have now, then maybe if I wait I can get something bigger. So, yeah. I do, starting around first grade which is when I started with him. And my other two, probably around first grade, I’ll start, you know, doing allowance.

MARTIN: Leslie, I’m fascinated by the clothing allowance idea. How did you develop that idea?

STEINER: I have no idea. It was just out of desperation of getting sick of saying no, no, no. And I also, I didn’t like that I was the one deciding if our daughter could buy a $15 t-shirt or a $45 t-shirt. You know, I wanted her to make those kind of crazy decisions. And it just worked and I like they keep track of it, there’s some math involved. They have to divide the year into quarters and, God, it just works so well. And our 11-year-old, who doesn’t have it yet, is dying to get it. And I also just want to echo that the age timing – I think that around first grade is a really good time to start giving kids a little bit of control and a little bit of an allowance because that’s when they really start to, kind of, put all the pieces together.

MARTIN: Yeah. Dani, I wanted to ask you about that because teenagers, in particular, is when – even really younger – first of all, all kids TV – TV in general is about spend, spend, spend, buy this, buy this, buy this. And then it starts to be a thing where kids feel, kind of, that’s how they belong, you know, this is how they, kind of, belong to a group. I remember when I was a teenager and we’d get on the bus. I mean, there were girls who would literally do an inventory of what you had on. Oh, you’re wearing this and you’re wearing that and – how did you manage that?

TUCKER: Well, I was a single mother so it was managed. I mean, they didn’t have those choices. They had to, you know, wear what I could afford or what other gave them. But they learned to appreciate it as a blessing. You could have nothing. And then we went from there and they worked hard. They worked hard to – when they really wanted something, like Leslie’s kids, I wouldn’t call it a clothing allowance, but they were known for, I’m getting this, I’m saving for it. So everything they did – they was always looking for jobs, you know, cutting grass – whatever they could do. But that was their thing…

MARTIN: That was the thing.

TUCKER: …Babysitting. Yes, you know it. Always, can we go to Michel’s? I know she got something for us to do.

MARTIN: True.

(LAUGHTER)

TUCKER: Call her, call her. But I like that because they hustle. For us, it’s called hustling. Hustle to get what you want.

MARTIN: Final thought? Lester, you have a final thought? Is there one piece of advice you wish you had had that you’d like to pass on?

SPENCE: You know what, I just – I wished that – my parents did an excellent job with me. I wish there was – I wish I could give people like a bulletproof answer to dealing with kids and their spending habits, but there just isn’t, right, ’cause you’re going to have a kid who just saves, saves, saves, no matter what. And then you’re going to have kids who, no matter how much you tell them to save, they’re going to go for broke literally. So that’s it.

MARTIN: Isra, what about you? The best piece of advice you wish you’d given or you want to give.

HASHMI: My best piece of advice really is just, you know, we as parents, we don’t want to see our kids making mistakes with money. But, you know, it’s better to let them make the mistakes now, early on when it doesn’t really matter than, you know, later when, you know, they have their own families and they get married and have their own kids they have to deal with, and then they max out their credit cards. I’d rather they buy something now $5 that they regret, you know, the next day than, you know, doing that later when they’re grown-ups.

MARTIN: Leslie, final thought from you really quickly.

STEINER: Well, the risk for me has been that my children grow up to be either spoiled brats or to feel overly guilty about their unearned privilege. And my goal has always been to teach them to value and respect money’s power without worshiping it or attaching too much significance or anxiety to it.

MARTIN: Leslie Morgan Steiner is an author and mom of three. She joined us for New Hampshire Public radio in Concord, New Hampshire. Isra Hamshi is the founder of the blog “The Frugalette” and a mom of three. She was with us from NPR West in Culver City, California. Lester Spence is an associate professor at Johns Hopkins and a dad of five, with us in our Washington D.C. studios, along with Dani Tucker an office administrator, a fitness instructor, and mom of two. And she was also here in D.C. Thank you all so much.

TUCKER: Thank you.

HASHMI: Thanks, Michel.

SPENCE: Thank you.

STEINER: Thank you, TELL ME MORE.

MARTIN: That’s our program for today. I’m Michel Martin and you’ve been listening to TELL ME MORE from NPR News. Let’s talk more tomorrow.

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