We're Teaching Kids to Earn Money - Are We Teaching Them to Manage It? Money Management International Survey Shows Nearly 7 in 10 Children Participate in Fundraisers

/PRNewswire/ -- Money Management International (MMI), the largest nonprofit credit counseling agency in the nation, released a survey showing that nearly 7 in 10 kids in America are asked to participate in fundraisers on behalf of their school or organization.

According to MMI's 2010 Kids and Money Survey, the majority of parents say they take advantage of fundraisers as an opportunity to teach their children financial lessons. Two-thirds of parents say they teach children financial responsibility and basic math skills. Roughly half of parents use fundraisers to teach their children goal setting or basic business skills, and 4 in 10 parents use the opportunity to teach budgeting or charitable giving.

School and organization fundraisers offer kids the opportunity to earn money and practice raising funds, but lessons in responsible money management come mostly from parents taking the initiative. For parents wanting to take fundraising lessons a step further, MMI offers some ideas on teaching kids important financial life lessons while fundraising.

Teach goal setting. Many fundraisers make teaching goal setting easy because they offer a tiered system of prizes for kids who sell a certain amount of items. Before the fundraiser begins, talk to your child about their goals and help them set a realistic expectation of what they can sell based on the time and resources available. Make sure to explain to them that the funds they raise don't just earn them a prize at the end, but result in the greater prize of benefiting their organization or school.

Teach basic math skills. Help your children count back change to customers, total the funds they've raised, and calculate how much they still need to earn in order to reach their goals.

Teach basic business skills. Capitalism is the heart of the American economy. Use fundraisers as an opportunity to prune your little entrepreneurs' goal setting, budgeting, and customer service skills.

Teach responsibility. Responsibility was the lesson cited as the most taught by parents when it comes to fundraising, probably because responsibility encompasses more than pure financial skills. Remember that a single fundraiser will not teach kids responsibility as much as you setting a consistent example of responsible money management with your family's finances.

"Parents are highly influential when it comes to kids learning how to responsibly earn and manage money," says Cate Williams, vice president of financial literacy at MMI. "Parents should use fundraisers as a tool to expand on the financial lessons their children will use for life."

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New Federal Credit Card Law - 5 Things Consumers Need to Know

/PRNewswire/ -- On February 22, most provisions of a new Federal Credit Card Law will go into effect. While many of the changes are designed to help protect card holders, it is still important that consumers practice sound credit management.

"Despite changing requirements for credit card companies, consumers should not use credit cards as emergency savings accounts or to purchase items they cannot afford," said Mechel Glass, director of education for Consumer Credit Counseling Service (CCCS) of Greater Atlanta. "Using credit wisely is the most sensible way to build, and maintain, a solid credit history."

CCCS shares 5 things consumers need to know about the new Federal Credit Card Law.

1. Rate Increases and Credit Limits. Under the new law, credit card
companies must extend promotional rates for at least 6 months and, in
general, rates cannot be raised on existing balances unless you are
more than 60 days late with your payment. Creditors may lower credit
limits or close accounts without prior notice to cardholders."Consumers
who are more than 60 days late and experience a rate increase are
eligible to have the original rate restored after six consecutive
months of on-time payments," said Glass. Creditors may still raise
rates on new balances with a 45 day notice to cardholders, compared to
the 15 days required under prior legislation, and there is no cap on
interest rates.Purchases may be declined if a credit limit has been
reduced and a pending purchase would result in going over the limit.
Institutions may offer consumers the option of exceeding their limit in
exchange for fees, but only one "over the limit" fee may be charged in
a billing cycle. "Make sure you clearly understand the fees involved,"
said Glass.


2. Payment Protection and an end to Double Billing. Payments received on
the due date, or the following day if the creditor was closed and did
not accept payment, are considered on time, as are payments made at a
local branch. This can help consumers avoid late fees, as payments must
be processed the same day they are received."Under the new law,
consumers cannot be charged interest twice on the same balance," added
Glass. The practice of basing finance charges on current and previous
balances is no longer permitted.


1. How to Keep Your Credit Card "Active"One by-product of the new law is
that some credit card companies may close a consumer's account if they
see a card is unused. To keep your credit cards "active," Glass
recommends that consumers may want to purchase gasoline once a month
with a credit card and pay it off quickly. She says this recommendation
will help consumers who have low balances on credit cards that
otherwise may be closed by their card company due to inactivity.



1. More Favorable Payment Allocation and TimingIn most cases, current
credit card agreements outline plans to apply payments to the lowest
rate balances first. Under the new law, any payment above the minimum
amount due must be applied to the highest rate balances first. In a
provision that went into effect last August, credit card companies must
send statements 21 days in advance of the payment due date, compared to
14 under the old requirements.

2. Gift card protectionOf the $87 billion dollars in gift cards estimated
to be purchased in 2009, approximately 6 percent, or $5 billion dollars
will go unused. Many will be eroded by fees and eventually expire
without ever providing a benefit to the recipient. Under the new law,
gift cards will not be able to expire for at least 5 years, and
inactivity fees will not be able to begin before 1 year after the card
is issued.


Changes in the credit card law are designed to help consumers be better fiscal managers. To help consumers navigate the new requirements, Glass recommends that consumers continue to use credit wisely. "Use credit cards only to make purchases that you are prepared to pay off when the bill comes in. Pay bills in advance of the due date and work toward creating an emergency savings account that will reduce dependence on credit in the event of unplanned events."

Need help getting your credit under control or understanding how the new laws might impact you? CCCS can help. Our certified counselors can help you review your current financial situation and work with you to create a budget and financial plan to get you back on track. Contact CCCS at 800-251-2227 or online at www.cccsinc.org or www.cccsenespanol.org.

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Understanding The Changing Tax Picture

(NAPSI)-As more baby boomers reach retirement age, analysts say it could pay to give some extra thought to taxes.

Indeed, tax efficiency and dividends will become important income streams for a growing number of retirees. And, according to a recent survey, investor interest in tax management strategies-which can help avoid the loss of returns to taxes-is on the rise.

One key to protecting your assets could be to work with a financial advisor, since investors who do so are twice as likely to invest in mutual funds that are specifically designed to minimize the effects of taxes. But it's also important to understand the tax picture. This quick quiz from Eaton Vance could help:

Questions

1. T or F? For the average taxable mutual fund investor, about 2 percentage points of return were surrendered to taxes each year over the past decade.

2. T or F? The highest tax rate on both qualified dividends and long-term capital gains today is 15 percent.

3. T or F? Tax-managed stock funds, municipal bond funds and variable annuities are examples of investments best suited to be held outside of a qualified retirement plan such as an IRA or 401(k).

4. T or F? AMT stands for "Alternative Minimum Tax."

5. T or F? All municipal bonds are "tax-free" and therefore are not subject to the Alternative Minimum Tax.

Answers

1. True. Over the past 10 years, taxable mutual fund investors gave up between 1.3 and 2.2 percentage points of return because of taxes.

2. True. The Jobs and Growth Tax Relief Reconciliation Act of 2003 reduced the tax rate on qualified dividends and long-term capital gains from almost 39 percent to 15 percent. This now gives investors two incentives to better manage the tax consequences of their investments.

3. True. The optimal use for each of these tax-advantaged investments is outside of a qualified retirement plan. Investors should generally use their qualified retirement plans to shield investments that would otherwise be fully taxable. Investors who are unsure of how best to use qualified plans should consult a financial advisor to help them make the correct investment decisions.

4. True. The Alternative Minimum Tax, or AMT, is calculated alongside ordinary income tax for all households. Under the AMT, taxpayers must pay whichever is higher, the AMT-usually 26 percent to 28 percent of income-or their typical blended tax rate. The AMT was originally adopted in 1969 to ensure that the wealthy would pay taxes. But, because the AMT's exclusion level is not inflation-indexed and incomes have risen, many middle-class American families are now subject to this tax. Without additional legislation, the AMT could affect nearly half of households earning between $75,000 and $100,000 by 2010.

5. False. Municipal bonds issued by entities-such as housing agencies, airports and industrial developers-are subject to the AMT because their use is considered outside of government purposes. These bonds, which comprise about 10 to 12 percent of the overall municipal bond market, are popular with municipal bond investors (including some mutual funds) because they tend to provide income (yield) that is about 0.25 percent higher than similar AMT-free bonds. While this can provide a good source of income for investors who are not subject to the AMT, after-tax yield comparisons between these bonds are not favorable for AMT-paying investors. Because AMT status may not be clear until the end of a tax year, municipal bond investors should ensure that holdings are AMT-free.

For more information or to begin learning how changing government regulations might affect your tax returns in the coming years, visit www.eatonvance.com/mediacenter or call 800-225-6265.

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