MyBrilliantKidz

In this sixth lesson in the Smart Consumer Skills Guide for Brilliant Kids series we ask you to explore debt and how good you really are with debt. In the last lesson, we gave 5 questions to ask yourself when spending. Debt is extremely important to understand and master. It can help in providing you with a great lifestyle, or can end up being a chain around your leg. It can ruin the rest of your life if a healthy respect is not given to it - it is a double edged sword, which unfortunately most of us do not understand.Debt is something that you will come into contact with sooner or later - the truth is that you need debt to live today - it is a fact of life and you need to be able to deal with it. The world economy functions when money is moving around it. Stop or disrupt that flow and people’s lives are affected by changing prices, changing interest rates, changing availability of goods and services. Debt is used to help money flow around more freely and quickly. It is readily available to all.

If you look at money, well, money itself is no more than an “I Owe You” note. Debt is an extension of this. So you can see that money and debt really are very similar.

What is Debt? Debt is where you borrow money from someone else, so you now owe them money and have to pay it back. This could be parents, friends, other relatives, or from a company. Unfortunately there are some critical differences when borrowing from a company compared to your family or friends.

Debt allows you to buy goods and services that you could not afford normally, or gives you convenience to live your life within a budget - smoothing out the bumps. It allows you to buy other goods, services, and most importantly, income generating assets - we will talk about leveraging in the Entrepreneur series of articles.

When you borrow, a company, such as a bank or credit card firm, will want your money back, plus more on top as interest. It’s their ‘fee’ for lending you the money. This is what it will cost you to ‘buy’ that supply of money. Debt is no more than this - a supply of money - a supply of more “I Owe You’s”, which you pay a fee or a cost to get hold of.

This is the product that these companies are selling you - you are buying a supply of money. What is the selling price? It is the interest you pay. So why treat debt any differently to any other product you may buy when you are ‘shopping’? Apply the same rules we discussed in earlier articles - ask the 5 questions; use the strategies to help you get the best deal.

A company will want the debt repaid in a specific way at a specific time that suits them. This is a legal contract for you to deliver. You have a legal obligation to the lender.

Governments have found it necessary to pass laws that determine how the supply of money is ‘sold’ to you, with various credit consumer acts. If Governments find it necessary to do this, you should realise the serious nature of debt. Get debt wrong and it will cost you a fortune - you cannot cancel debt - it is a legal obligation on you.

If you miss this, your costs will mount up. Let’s not forget: companies are not your friends. When people need to borrow money, they usually go to their bank and expect that someone there will know the best thing for them to do. A bank isn’t there to give advice, it’s there to sell you things and make fat profits. Whether or not to go into debt, and who to borrow money from, are two of the most important decisions you’ll ever make.

As this a hugely important area and no one will sit down with you to independently advise or help with these questions. We thought that it would be more useful for our readers if we spent little more time on Debt with more articles in this area.

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In the last lesson we asked how good you really are with your money, and looked at the 5 components you need to understand to be good you’re your money. In this fifth lesson in the Smart Consumer Skills Guide for Brilliant Kids series we look at what you need to be doing to helping curb that impulse buying resulting from good and clever marketing.

Remember only you are responsible for making the decisions to buy or not. No-one else is responsible for this. So take this responsibility seriously and let’s have a little fun. Before you spend, you need to do some thinking and analysis, by asking a series of questions to help you take the emotion out of the decision and decide on a more objective basis.

Like anything else, do not expect to become an expert at this overnight, or to get it right the first time - this will take a little time. The more you practice, the better you will become. It is more important to understand that these questions will develop a more logical thought process and this is the key in developing a smart consumer mindset - one you have this, the rest is easy.

These questions have been put together from my own experiences and reinforcing this with what the experts had to say.

• Do I need it? If you don’t need it - don’t buy it. If you buy something you don’t need, it’s obviously a waste of money.
• Will I use it? What will you use it for, and how often. If you will only use it infrequently, then this is really a luxury buy and unnecessary. How much and how often will it inconvenience you if you don’t have it? Am I giving up anything else by buying this?
• Can I afford it? If you can’t afford it - don’t buy it. If you buy something you can’t afford, you begin a cycle of living beyond your means. Eventually, you’ll end up borrowing money either as loans, overdraft or on your credit card - the easiest of all debit, and this could take you into ever increasing debts. We will talk about debt in future articles.
• Can I get it cheaper somewhere else? Check and make sure that the same thing isn’t available at a better price somewhere else. Look in other shops, the local papers, and the internet to search for the best deal - try to make sure you know what the market rate is for this product. If you are not sure, then don’t buy until you have checked, even if the deal sounds too good to be true (if it does, then it usually is).
• Can I return it? It is important to know the returns and refund policy of the item. This is really about ensuring that who you buy from is credible, in that they have signed up to a code of practice. Also if something happens to the product - e.g. it fails. You know you can either exchange it, or get a refund - you will not be left with a dud product. It worth knowing the key terms of the returns policy - will they only exchange for other goods or offer refunds. If they offer a refund, what is the time scale? Is there a warranty of guarantee that comes with the product?

What you are really doing by asking these questions is assessing what is known as the “opportunity cost”. This is where you have one thing but, as a result, miss out on having another. This assessment is made by businesses all the time in finding the best ways to persuade you to buy - so why can’t you use this technique too for your benefit?

As you can see, it is easy to assess the opportunity cost. However, you need to ask yourself these questions honestly - remind yourself of your past history with products - how often have you used them? Did you really need them? This is the hardest part.

After reading these 5 articles, you now have the tools and understanding to become a smart consumer. Now you need to teach you kids the same way of thinking. As you do, talk to them about it and the thought process. Get them to ask the same questions as you - they may well be better at reminding you of your history. This will make it fun for them, and if they ask for something, you can more easily ask these questions of them.

A final word - with your children, you should try to maintain a distinction and a balance between this and reward for motivating them - if a child wants something - it is worth tying that to some actions that your child needs to complete. On completion he or she gets will get that item.

In the next article, we will talk about debt and what you need to know about debt.

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In this fourth lesson in the Smart Consumer Skills Guide for Brilliant Kids series we ask you to explore this question and make an honest judgement. In the last lesson, you learnt about how companies persuade you to buy, here will look at you and your habits.

Are you Good With Money?

When you ask people this question, many will say yes. Their reason will invariably be something like “I try and save, not spend, when I get cash”.

However, this doesn’t necessarily make you good with money. Being good with cash is just as much about how you spend, whether you spend it or not, or whether you save. It is about recognising the value of money, and what it can be used for and do for you. Remember that ‘saving’ is another product that companies will ‘sell’ you - just look around at the savings plans and accounts that offer seemingly attractive interest rates.

Can you effectively see through the thousands of companies telling you different things about where to stash it; where to spend it; and what to splurge it on?

Money is a tool, and as a tool, it is only as good as the person using it. Think about this - we are all born with the same opportunities - some people go on to make fortunes, and others struggle - why? The ones that make fortunes think differently about money and see it as a tool that they can wield. They have understood how money works and instead they have made money work for them.

Here is a little test - who do you think is better with their money?

Sally: She has $400 for a holiday. She spends $250 on a budget flight to Rome, and stays in a youth hostel managing to save $60 of it.

Silvia: She also has $400 for a holiday. She manages to find a bargain business class flight to Rome, stays in a nice hotel with a pool, sauna, fantastic breakfast bar and gets discount theatre tickets but spends the whole $400.

The answer depends on your circumstances and what you can use the money for. If Silvia’s in debt, and splashing out on a holiday, she’s not good with money even though she got the better bargain. For $60 more, Silvia probably had a better time, and made the most of the money. Being cash smart is both about understanding what money you have, and how to use it i.e. in reference to your circumstances.

The truth is that no-one is going to teach you about your money. There are 5 components of being good with money in this day - you need to learn these and practice them in order to be good with money:

1. The best ways to spend - let’s face it you cannot live without spending so learn how to make the most of it.
2. The best ways to save - you need to save for a rainy day, for a holiday, a car etc
3. The best ways to borrow money - in this day, you need to borrow to buy large items - your home, car, new kitchen, paying school fees…
4. How to budget and then stick to your plan - this is your control plan, where you can determine and adjust the level of spending for regular outgoings, one off’s, how much to save, and how much to borrow.
5. How to analyse - how to get the best deal - what are the financial and other effects of the deal, the ‘transaction’ you are about to carry out.

If you think about about it - all the companies that are selling to you, are good at these methods, and know how to use them all effectively. So why not take a leaf out of their books and apply them to yourself.

In the coming lessons, we will look at some tools and strategies to get you started on these components. Once you understand these and can apply them, the next components to add will take you towards entrepreneurship, as you will have the basic financial skills to run a business with these 5 basic skills.

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This is the third lesson in the Smart Consumer Skills Guide for Brilliant Kids series. In the last lesson we talked about how to turn the tables on companies who like to make money from you. In this lesson we will talk about how companies persuade you to buy.

If you can understand this, you will able to recognise this and know how to stop it from controlling your thoughts, impulses and emotions - this is what they appeal to in order to make you buy. Companies do not really sell anymore; instead what they do is “pre-sell” i.e. to put you in the comfortable state of mind to make the buying decision easier by making it look like your own decision.

How do they do this? The large companies always show a perceived problem or issue, or a desire that is not being fulfilled, then show you how good the solution to this will make you feel - the solution being their product. Once they have got this message across to you by advertising in the papers, magazines, on television and radio, the rest is about strategically placing the products to get the maximum number of eyeballs on their products.

This just reinforces the pre-sell message - the feel good and must have factor, and you buy. Just think about your journey to the supermarket and what you see when you are there. Companies have spent millions on researching and finding the most optimal placing of products on the shelves.

Here are some pointers for you to look out for on your next visit:

• The store layout and lighting - is laid out in a particular way that you need to follow a pathway around the store. This ensures maximum eyeballing time. The lighting is bright and fresh.
• The store usually starts with the groceries to match a consumer expectation of what the store should be doing. The smell of fresh fruits and the variety of colours is usually has a very positive effect on you.
• The staple products such as bread, milk, butter, cheese, eggs etc, tend to be found either sprinkled around the store or more commonly, at the furthest end of the store, so that you need to pass many other tempting goodies to complete your shopping. Again, this ensures maximum eyeballing time for products.
• If the store has a food area or bakery - delicious mouth watering food smells regularly waft through the store, tempting you to buy more food!
• Eye-level isn’t the best level. The most profitable stock is placed at eye level (or at children’s eye level if it’s targeted at them). Profitable goods for stores tend not to be the best deals for shoppers, so the adage ‘look high and low for something’ really does apply here.
• Not all sales are ‘super!’ While grapes and other attractive products may be placed near the front of a store to entice you in with a genuine bargain - the same signage and displays will be used elsewhere to promote deals, yet these mightn’t be competitive. Bright colours and the word ‘discount or sale’ make us feel good, yet the reduction may be pennies, and other equivalent products which are hidden on the shelf are a better bargain. Here is where term “spend to save” comes from! How can you be saving if you are spending?
• Notice that the sweets and magazines are always by the till. These are impulse buys, so putting them near the till gives the store one last attempt to grab our cash: by appealing to kids so they can nag their parents to buy.

On your next visit to a supermarket or any other store - look at the store from these eyes - from what you can smell, see and hear - everything is geared towards making you spend. Even in an electrical store - the glamorous items are at the back - the TVs and DVDs, the computer games at the front.

You need to keep asking yourself “Do I really need this? Or am I just being tempted to buy something”.

Look at the world in these eyes and you will start to recognise the clever and subtle marketing strategies that companies use. These strategies have been honed to perfection over many years of practice and research.

In our next lesson we will talk about how to overcome these temptations, and in doing so, being a smart consumer.

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 This is the second lesson in the Smart Consumer Skills Guide for Brilliant Kids series. In the last lesson we talked about a businesses job is to make money from you.

Business is not there to help and assist with daily life - that is your job - they merely provide you the products, tools and knowledge to do that. Because they want profit, this can work in your favour. So how can you use this to your advantage?

You can do this by comparing the offers by different companies for the same product or service. Make them truly compete against each other - play them off against each other, and see which is more motivated to make the sale, and in the process give you a saving. A business that is motivated to make the sale is also more likely to provide a better customer or after sales service.

If they are switched on enough to make an effort to get your custom, then they are going to try to keep it, as they will realise that the value of a loyal customer is far greater. A good impression increases the chances of future sales - “better the devil you know, than the one you don’t”.

So what are the strategies can you use to help you do this?

Online

• Google or Yahoo search - compare 2 or 3 sites and you will get a good feel for the price
• Price comparison sites - always a good place to start from. I would try a couple to get a good indication. Whilst they are good, you can still get products cheaper outside, as these sites rely on online retailers - if a business is offline, it won’t appear in their search results. And not all online retailers will appear on these sites either - only those who run affiliate programs - that is, they are willing to pay the comparison site a commission for each click or sale. This is how these sites are funded and make money.
• Ebay - you can get a whole load of items cheap here, but look make sure you check the sellers statistics - how long have they been on Ebay, how many items have they sold, what feedback have they had, what payment methods are they using - stick to paypal, as any other method requires you part with your money upfront, do they give any guarantees or do they have a returns policy. Many powersellers are effectively retailers who use the Ebay model.
• Amazon - Amazon now offer other retailers to promote their produces on the Amazon site. 

Offline

• Check the local papers for who has offers and sales - show these to other retailers to see if they will at least match the discounted price.
• Word of mouth - who do your friends and relatives recommend and why. Do they know the business owner sufficiently well to get you a discount.
• Shop at the end of the day. The end of day strategy is really good for perishables and foodstuffs - especially at market stalls where they will sell at a large discount, rather than throw away the fruit or vegetables. At supermarkets, look out for marked down items which have reached their “best by” or “display until” date. These items are still good to eat, and have not spoiled. These dates are telling us that the item will retain it’s best and freshest quality until the date displayed. The difference in quality is very small and not noticeable. The nutritional value does also is affected similarly. The price might be up to 80% less, for a small 5% drop in quality.
• Shop at end of season if the item is seasonal or coming to the end of the product range’s life. This strategy works really well, provided you are not going to need to keep going back for more items, and you can pick some superb quality products at deeply discounted prices. For Example, retailers will stock up for the winter 3 - 4 beforehand, and will clear their summer ranges during August and September - a good time for bargain hunting. The winter stock is usually sold off in January.

Apply these strategies, talk about them, teach your kids, and get them involved in this process as a fun exciting exercise and they will pick up these smart habits.

In our next lesson, we will talk about the tricks and strategies companies and retailers use to persuade you to buy from them.

www.MyBrilliantKidz.com

Teaching kids about money at an early age is the smart thing to do. They will grow up already familiar with how money works and be smart with money. Usually they are far more interested in the real world - games, videos, toys, play…

The real challenge is to make your children so savvy with money that they actually end up saving money for you as parents. In the last article we talked about companies spending billions to make you buy from them, because this makes them a lot more money. You just need to be able to control this. In order to do that, there are some questions you need to be asking, and some rules that you need to live by - and teach your kids. We have created this Consumer skills guide as a set of lessons that summarizes what you need to know and teach your kids.

You will need to understand how money works - what is an asset, what is debt, and then to develop the skills and strategies to use this knowledge. It is surprising to find that many adults, let alone kids do not understand money - yet they spend their whole adult life running after it. Because they do not understand, they end up being a ‘slave’ to money - it runs their lives.

In the developed world, we live in a capitalist system or economy, where companies and businesses are run to make a profit, by providing a service or products to customers - us the consumers. That is their primary and main purpose. They may provide a great service or product along the way, but that this part of making money. A better product or service can attract more custom and generate higher profits. The capitalist system is the most powerful economic system known to man; it has generated massive wealth, security, comfort, employment, power and has afforded a high standard of living for us.

However, until you understand that a company’s job is to make money by persuading you to buy - you will make the wrong decisions. You are the only person who is really bothered about you and your family. If you don’t learn this lesson, the companies will be left with smiles on their faces… while you’ll be left with a future of cold baked beans at mealtimes because it could be all you can afford.

In the next lesson we will talk about how to use this to your advantage.

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At MyBrilliantKidz, we believe that all our children are Brilliant Kids in the making - it is up to us parents to bring this out. Whilst we may think about this as primarily being linked with education, we should not forget the “real world” skills and attributes that are needed to get the best out of adulthood.

Unfortunately these are not taught at schools, leaving our kids to pick them up in later life or at best copy our habits. We are all swayed by the powerful media and advertising companies to buy and behave in particular ways.

Very few parents take the time to ‘educate’ their children in these skills. Not only can kids be smart and savvy in developing those important financial skills, they also lay the foundation stones for taking the first steps to entrepreneurial mindset.

Your body is made of 2 halves - the head and the rest of your body. The rest of your body has the ability to earn in the $20 - $100 per hour region. Your head or mind has the ability to earn $ millions. To awaken this potential, an entrepreneurial mindset is required. The younger a child starts the easier and more natural this becomes.

There are a number of tools and games that will help do this, which we will talk about in later articles. The first set of articles in this series will talk about how to become a financially aware consumer.

Companies spend over $300 billion a year on marketing, advertising and teaching their staff to sell! Why such a high figure? The answer is that we as consumers, spend over $7 Trillion a year!

The result is that everywhere we are bombarded and tempted to buy spend our hard earned cash. From the billboards, TV to the supermarket, we constantly encounter many imaginative and varied ways and techniques to get us to spend.

Companies also spend millions to train their staff to buy when they are buying for the company as procurement officers. Yet as consumers - we are the buyers who do not get any “buyers’ training”. Yes there are consumers groups, but these are small and cannot compete with the big budgets of the multi-nationals.

That’s why we at MyBrilliantKidz have started this practical survival guide to living in the most competitive consumer economies in the world.

www.MyBrilliantKidz.com

After the Test

You and your child can learn a great deal from reviewing a graded exam paper. Reviewing will show him or her where they had difficulty and after some analysis, why. This is especially important for classes in which the material builds from one section to the next, as in math. Students who have not mastered the basics of math are not likely to be able to work with fractions, square roots, beginning algebra and so on.

Discuss the wrong answers with your child and find out why they chose the answers - i.e. what their thought process was. This will help to relate back to the question - did they understand the question? or misread a question? If they understood the question and knew the answer, did they fail to make the answer clear?

You and your child should read and discuss all comments that the teacher writes on a returned test. If any comments aren’t clear, tell your child to ask the teacher to explain them.

Reviewing the test paper is also has another benefit - it reinforces the understanding that the test was not difficult. It is important to nurture this thought process in your kids, and to link this to the revision and work they did before the test. By doing this, you are reinforcing the following thought processes:

• test or exam preparation is not difficult
• the best way is to revise the work as you are doing it
• a little discipline now goes a long long way to preparation for tests and exams
• doing the exam or test is not difficult, as long as you follow a strategy or a system
  Remember, you are looking for small wins - where you see this, make you comment and praise them on it.

Finally, don’t get upset because of a single test score. Many things can influence how your child does on a test. She might not have felt well on test day or she might have been too nervous to concentrate. She might have had an argument with a friend before the test or she might have been late to school because of traffic. Remember, one test is simply one test. This needs to be balanced with the child’s overall well being - this may require some trial and error.

Lastly, enjoy the experience, and have faith that it will work out. It does not require a major change in your lifestyle, but this can reap major rewards in the long run.

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Continuing this series of practical articles to help you and your children - Helping your Child Succeed in School, and test taking, in this article we discuss how we can work with our children in helping them prepare for exams, and getting through school.

Kids are intelligent enough to understand comprehend the world around them. They will also be willing to do something if they understand why, although this might need to be reinforced by some ‘rewards’. Here are some tips to consider.

Talk to your child about testing. It’s helpful for children to understand why schools give tests and to know the different kinds of tests they will take. Explain what tests are and how the process works.

Discuss with your child that occasionally, he or she will take “standardized” tests. Explain that these tests use the same standards to measure student performance across the state or even across the country. Every student takes the same test according to the same rules.

Don’t place so much emphasis on your child’s test scores that you lose sight of their well being. Too much pressure can affect the test performance - you do not want your child to think that you will only love them if they do well on tests.

Encourage your child. Praise him or her for the things that she does well. If your child feels good about herself, she will do her best on a test. Children who are afraid of failing are more likely to become anxious when taking tests and more likely to make mistakes.

Do try plan ahead and introduce a small amount of revision everyday, even if it is only 15 minutes.

Avoid test anxiety. It’s good for your child to be concerned about taking a test. It’s not good for them to develop “test anxiety.” Test anxiety is worrying too much about doing well on a test. It can mean disaster for your child. Students with test anxiety can worry about success in school and about their future success. They can become very self-critical and lose confidence in their abilities. Instead of feeling challenged by the prospect of success, they become afraid of failure. If your child worries too much about taking tests, you can help to reduce the anxiety by encouraging the child to do the following things. This has the opposite effect to what you need to achieve.

Make sure there is plenty of time to do other activities that allows your child to feel relaxed and content. A content child is likely to do better in the tests.

Get away from “cramming” the night before. This will likely increase your anxiety, which will interfere with clear thinking. Get a good night’s sleep. A light flick through the notes is better.

Go through the test mechanics - how to do the test:

• When you get the test, read the directions carefully before you begin work. If you don’t understand how to do something, ask the teacher to explain.
• Look quickly at the entire text to see what types of questions are on it (multiple choice, matching, true/false, essay).
• See if different questions are worth different numbers of points. This will help you to determine how much time to spend on each part of the test.
• Do the easiest questions first
• Do not spend too long on a question, move on to the next question if you cannot answer or your mind goes blank. Do not spend time worrying about it. Come back to the unfinished questions at the end.

These tips will help get the best out of both you as the parent and your children. In the next article, we will talk about what happens after the exam.

www.MyBrilliantKidz.com

This is the next series of practical articles to help you and your children - Helping your Child Succeed in School, and test taking. If you understand the importance of tests and results, and how to use them to nurture confidence and assurance in your children, it will go a long way to reinforcing the positive traits in your children.

What are Tests?

Tests are yardsticks that teachers, schools, school districts and even states use to measure what and how they teach and how well students are learning what is taught. Most tests are designed and given by teachers to measure students’ progress. The results tell the teacher whether they are keeping up with the class, need extra help or are ahead of other students. As parents we should also pay attention to this yardstick. Remember regular small wins is what we are looking for.

The results also tell schools that they need to strengthen courses or change teaching methods. Still other tests compare students by schools, school districts or cities. These become school league tables.

What ground work should you be going?

There are some things you can do to really help and get a head start in this process. The first thing to remember that you are not aiming to make your child top of the class for everything, but are looking for ways to boost and reinforce the overall outlook and thought processes of your kids.

It is worth meeting with your child’s teachers as often as possible to discuss his progress and what they are likely to cover in the school term. Ask the teacher to suggest activities for you and your child to do at home to help your child’s understanding of schoolwork.

Make a study area - a quiet, comfortable place for studying at home. It is good to get your child used to this and form a habit to study here.

Do provide books and magazines for your child to read at home. By reading new materials, a child will learn new words that might appear on a test. Ask your child’s teacher for lists of books for outside reading or get suggestions from your local library. Provide games and puzzles or other things that make your child use their brain - problem solving, creative, or making things….

It also helps if your child has an evening and bed time routine - this makes it easier, and is not questioned, and helps to ensure that he or she is well rested on school days and especially on the day of any tests. Children who are tired are less able to pay attention in class or to handle the demands of a test.

Plan ahead. Start studying for the test well in advance. Make sure that you understand what material the test will cover. Try to make connections about what will be on the test and what you already know. Review the material more than once. Make a study plan - which topics your child needs to cover on each day. Make it a habit for your child to study a little every day if there is no homework.

Each time your children do this, reward them at the end by giving them something or playing with them or letting them do something they enjoy. It is also good for a child’s discipline to stick to time limits as much as possible.

You will to find and strike a balance between this and not over ‘cramming’ and at the other extreme, total freedom for the child. Where you put this scale is up to you, but there is no doubt that this kind of programmed approach is very effective.

The next article in this series will discuss some practical specifics in relation to tests and exams.

www.MyBrilliantKidz.com