Reading is Fundamental

My children love to tease me about discussing what I read in the Wall Street Journal at the dinner table, but guess what; the dinner table is one of the places I got key pieces of my education, so I'm paying it forward. This is just one example of reading and talking about what you read. The more you read, the more various pieces of what you've read start to interconnect. Reading isn't just about reading books, magazines and newspapers though. It's about reading labels, reading advertisements, reading the fine print, reading disclosures, reading the unit pricing at the supermarket, and thinking critically about what you've read. In order to make informed decisions in your daily life, Reading is Fundamental.

I remember watching television as a child, and commercials would come on advertising something as new and improved or 25% better or 20% bigger. My father would say "25% better than what?" Over and over he said this about claims on cereal boxes and laundry detergent, and as commercials came across the TV screen. He taught me that you had to read the label to find out, and that usually the answer was not what you were expecting.

The supermarket is chock full of reading material that is often surprising. Teaching your children how to read labels, how to read unit pricing and decipher the best deal, and how to read through marketing claims is a terrific life lesson. It prepares them for critical reading, thinking and decision making later in life.

My key point here is not that critical reading helps you be a good supermarket shopper (although this is a good life skill). My point is that taking the time to read the details is essential to making informed decisions, and informed decisions are at the heart of making economic sense in a world of seductive marketing and invisible money. Here are some other examples where reading is fundamental:

• Pre-approved Credit Card Solicitations
• Free Credit Report Offers
• Any Offer of "3 free months of membership"
• Mortgage Terms
• CD and Money Market Account Rates

These are only a few, but I think you get the point. Like my Dad used to tell me: "don't focus on the big print they want you to read, read the fine print next to the asterisk".

Note: Since I talk about commercials in this piece, I have to give credit where it's due. As these ideas came together I remembered the little voice from TV commercials of my childhood saying: "Reading, It's Fundamental".

Founded in 1966, RIF is the oldest and largest children's and family nonprofit literacy organization in the United States. RIF’s highest priority is reaching underserved children from birth to age 8. Through community volunteers in every state and U.S. territory, RIF provides 4.5 million children with 16 million new, free books and literacy resources each year.

In 1966, former teacher Margaret McNamara brought a bag of used books to four boys in Washington, D.C., whom she tutored in reading. When she told the children they could each pick out a book to keep, their astonishment and delight led her to discover that these children, and many of their classmates, had never owned any books.

By that summer, Mrs. McNamara had gathered a group of school volunteers, and on November 3, 1966, they launched the book distribution and reading motivation program they called Reading Is Fundamental.

From November 1966 through the early 1970s, RIF expanded from a pilot project at three elementary schools in Washington, D.C., to a program reaching children in 60 of the city's public schools. More about RIF...

Lights, Camera, Distraction!

"17 Again" debuted at No. 1 at the box office, pulling in an estimated $24.1 million. I have to admit, I kind of want to see this one. Looks like "It's a Wonderful Life" meets "Back to the Future". Still, I'm pretty much of a cheapskate (big surprise) when it comes to going to the movies. Just ask my kids. There isn't a lot playing that motivates me to spend close to $30 (that's for me, and only one child to watch, and a Jumbo Popcorn). Bring the whole family? You must be kidding! I'll wait for the DVD, or maybe if it's free movie day for Optimum Rewards customers, I'll take a kid or two and go.

You'd think that now that times are tough, movies would be hurting, right? Nope, just the opposite. Overall box office receipts were up for the fourth straight weekend, surging 21 percent over this same weekend last year. So where's the recession? It turns out the recession is helping drive box office results. Why? Because when times are tough, people love distraction.

The surging box office results remind me of a story my father told me when I was a little girl. As I've mentioned before, my family owned a small department store started by my great grandfather. I never met him, but he was a very good business man. Anyway, one day a mother and daughter came into the store. The little girl pointed out to the mother that her socks were full of holes, and she needed a new pair. The mother scolded the little girl and said "you know we only have enough money for the train and the movie!" (Back then there was no movie theatre in town, and you had to take the train a few towns away to watch a movie). This said a lot to my great grandfather about priorities, if people would spend for movies over socks for their children. So, he opened a movie theatre in town. Great business sense! Pretty sad story about how people prioritize expenditures.

The desire for distraction plays out in many ways in a down economy. I read recently that sales of romance novels (like the harlequin kind), and fantasy/sci novels are way up. Even libraries are seeing increased demand for these titles. Disney DVD sales are down, and Netflix rentals are up.

Distraction is not a bad thing. A little escapism in a good book (okay, my definition isn't a harlequin romance, but whatever works) or movie is a nice reprieve from the realities of today's economic crisis. Here are a few thoughts and suggestions on employing some economic sense to your escapism:

• Reacquaint yourself and your children with the public library. Not only are the books free, but the trip gives you a free mini-outing together. Libraries are open pretty late, and on weekends so you can squeeze it in during non-working hours. The library frequently has a fund raising book sale where you can buy books for about $2. This is a great deal, especially if you don't want to deal with deadlines.
  
• If the library really isn't an option, buy your books at a discount store like Sam's, online from Amazon, or used from Half.com. I used to cherish my books (and still do, some great ones I wont part with), but realistically do you really need to own all of them? As one of my bosses used to say, if the square footage to store the books is worth more than the books you're storing, you need to rethink. Consider reselling the titles you don't want to keep on eBay (or their site half.com), or you can resell on Amazon. No time? Donate them to the library or a local hospital.
• Use the current economic hard times as a teaching moment for your children. Were there books you loved as a child? Read them together. When I think back, I actually read a lot of books as a child that taught good economic sense, self-reliance, and how to deal with hard times. I'll talk about some of these books in a future post, but I'm sure you can think of some that you read as a child.
  
• Rent DVD's from Netflix (if there are other subscription services out there fine, but Netflix is what I know and love). They have plans that are less than $10/month, and you can take your time watching the movies if you're busy. They also have thousands of titles you can watch online. Same as books, how many DVD's do you really need to own? Even titles from the $5 bin at Walmart (another good source) aren't necessarily keepers, and just clutter up your house. Again, sell them online or donate them to the library or a local hospital (keep track of what you donate and take a tax deduction). I especially like the hospital option. Many children's floors have DVD or VHS players in the rooms, and a library of movies for borrowing/viewing. If you've ever been in the hospital with a sick child, these are a real blessing.
• If you really want to go to the movies, check out the schedule for the bargain matinee (at least you'll save a couple of bucks), or if you're a Cablevision customer, get an Optimum Rewards card so you can see movies for free on Tuesdays at Clearview Cinemas. I feel a lot better about a $7 tub of popcorn, when my ticket is free.

So, go ahead and enjoy some escapism. Just don't get distracted from economic sense. Socks without holes really should be more important than an afternoon at the movies, but if you want to strike a balance try buying the socks (or whatever that boring, but necessary item is) and renting the movie.

I'm putting together a list of great books I read as a child for a future post. If you've got suggestions about memorable books from your childhood, I'd love to hear them.

A World of Invisible Money

I was raised by a very fiscally responsible family. I was taught the value of hard work, saving, and most importantly, deferred gratification. When I started raising my own family, I somehow assumed that my children would glean, by osmosis, the same money sense I had gleaned from my parents. But as they grew up, I realized that this wasn't happening. And it wasn't just my kids that had no concept of financial reality, it was other kids and younger colleagues, too. What happened? I pondered this for some time. I had set a good example for my children. I worked hard, saved, lived within my means, shopped frugally, and had no credit card debt. Then one day it hit me when my very bright 16 year old daughter asked me if she could deposit cash in the bank. I was dumbfounded! At first I couldn't even grasp what she was asking me. What's the bank for, if not for depositing cash? How could my bright, beautiful daughter who'd come to the office with me since she was small, who'd travelled with me on business trips to Europe, who knew there's always a breakfast buffet at a hotel and that you can call the concierge if you forget your toothbrush, not know that you could deposit cash at the bank? Then she told me. "Mommy, I've never seen you deposit cash". She was right. Why would I? My paycheck is direct deposited, and aside from depositing an occasional birthday check, I never go to the bank. Money has become invisible. It goes electronically to the bank from your employer, and comes out magically when you put your ATM card in the machine. Even better, now we all just pay with our debit cards, so we barely touch cash.

Before I go any further, let me make it very clear that I love technology and the convenience of direct deposit and debit cards. To me, the best part about debit cards is that I don't need to carry cash or write checks, and they are not credit cards (which I knew from an early age are bad, but that's another post).

When I was a little girl, I had a passbook savings account. I learned to deposit the 50 cents a week allowance I got, so I could save up to buy things. When I was 8, I started working in my father's clothing store for 25 cents and hour. I deposited my earnings in my savings account, and learned that every month you got a bonus entry in the passbook called interest. My father used to send me down the street to the bank with a green pouch to deposit money from the store in the bank (unbelievable in this day and age, but that was small town America in the late 60's and early 70's). Okay, this is all very nostalgic, but why does it matter? It matters, because I saw money being earned, counted, deposited in the bank, and earning interest. Money was real, tangible, and visible. You earned a finite amount, and you could spend a finite amount. The money you had in the bank was the money you put in the bank. A simple equation.

How did our economy get into so much trouble? While it makes good populist TV to blame greedy Wall Street fat cats (and there were some), the bottom line is that too many people lost sight of that simple equation. You can't spend more than you have. Invisible money is fine, and very efficient, as long as you learn that behind the scenes is real money that has to be counted and kept track of. The challenge now, is to teach an entire generation how to keep track of their money and determine what they can actually afford. But that's the stuff of future posts.

If you have stories about how you learned (or didn't learn) about money while you were growing up, I'd love to hear them.