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How To Ditch Your Allowance & Be Richer Than Your Parents!

9 Wealth Building Tools to Make a Teen Rich

By Patti J. Handy

27943 Seco Canyon Road, Suite 520
Santa Clarita, CA 91350

Patti Handy, Money Coach for Teens, has written a book to raise awareness and to increase the financial literacy of young adults. Mrs. Handy is a parent as well as a money coach, and she is dedicated to educating teens on money matters. The author received her bachelor's degree in Accounting, followed by a combined 25 years in the banking and mortgage industry. Currently, she holds a California Real Estate Brokers License and is a CTA Certified Life Coach.

This 135-page paperback book is divided into 9 chapters, or "wealth building tools," that walk readers through just about everything they need to know about handling money matters. I liked the fact that the book also includes a topic Bible verse related to the subject of most chapters.

The first chapter, "Money Mindset," sets the stage with the idea that our thoughts are powerful tools. Handy says, "As a result of your thoughts and beliefs, you have certain feelings (emotions), which in turn move you to take certain actions, which then give you your results. So, if you don't like the results you see, whether it be money, career, relationship or health oriented, change your thoughts." She also gives suggestions for further reading, authors such as Napoleon Hill and Joseph Murphy. One suggestion that I particularly appreciated was to be consciously grateful. Making a daily habit of "taking inventory" of all the blessings in your life and acknowledging them, never taking those things for granted.

Chapter two explains how to spend you money wisely, with suggestions such as tracking your spending, avoiding impulse buying, how to write a check, keep a checkbook register, and using a debit card (and keeping track of those receipts!). Followed by a chapter on debit and credit, wealth building tool #3, young adults are introduced to the concepts of that little plastic card! The Scripture verse for this chapter is one of my favorites: "The rich rule over the poor and the borrower is servant to the lender." (Proverbs 22:7) Thorough explanations are given on the differences between credit and debit, how to build a credit history, and what really is considered an emergency use for credit cards, as well as how to choose a bank. She describes her idea of "good debt" and "bad debt."

On the topic of saving, Handy explains what it means to "pay yourself first." She goes into some depth with concepts like compounding interest but also includes simple budget plans, such as how to allocate savings based on age. Handy advises that if a child is 12-16 years of age they should allocate 30% to "plain old fun" spending, 30% to short term savings including things they want to purchase in the near future, 30% to long term savings for things like your first car or even college and 10% to giving back. She goes on to explain how the allocations shift for children 16 and up.

In following chapters details are given on investing basics, credit scores, and--the biggie--the chapter about "your first home." This chapter is really geared toward adults who are ready to make that first step, but it would be advantageous for younger adults who want to be (and should be) prepared for one of the biggest investments of their life. Concepts such as down payments, closing costs, realtor commissions, adjustable rate mortgages, and so on are discussed with brevity. Last, but certainly not least, is "Give it away: it's the greatest gift of all." The final wealth-building tool deals with a subject that should be high on everyone's priority list: charity.

How to Ditch Your Allowance is a great educational tool for children; however, readers in my family found the title misleading. The title gave us the idea that we would be learning how to replace or start an income for young adults. The idea that a child could give up their allowance and still have money to spend and save is implied by the title. "Where the money comes from" is not really addressed in the book, and there must be a source of income before a child can really implement any wealth-building tools. Some parents do not give allowance, leaving children with the question "Where will the money come from?" While the book doesn't give us the answers, the author's website does have some tips and job suggestions for young people. At www.teenscashcoach,com children (and adults) can sign up for a free weekly video series called "The Money Minute for Teens." So, enjoy the book, but realize that the contents are not necessarily what the title implies.

Reading this book opened up communication about money in our home--topics such as how we feel about storing up treasures on earth, how much money is enough, where our happiness should come from, where and how to give, not only of your possessions but of yourself. I sincerely wish I had read a book like this one when I got my first job at age 15. The advice would have been very useful. Truthfully, children old enough to read chapter books should have a copy of this book on their "most read" bookshelf, and it should be highlighted and worn out! Not only is the book educational, but it is written in everyday language that is easy to understand due to the fact that the author wrote the book based on conversations with her son. The book was given the "Teen Approved for Radical Parenting" seal! The book might be a bit pricey ($17.95) for some budgets; however, you can download an e-book version for about half the price.

Product review by Rebecca Huff, The Old Schoolhouse Magazine, LLC, January 2010

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