20 money milestones for kids

As school exams get underway there’s a lot of stuff being digested in teenage bedrooms all over the country. I don’t just mean chocolate hob-nobs, but maybe some geography, german and algebra too.

Are modern kids prepared for the money world?

However,  one subject that’s notably absent from the modern curriculum is financial literacy. 

In a couple of years hoards of these youngsters will be managing their own finances, perhaps while saddled with student loans. And research shows that a big chunk of them won’t understand the money basics, like the difference between AER and APR or how compound interest works, by the time they reach adulthood.

That’s why I welcomed the launch this week of a website aimed at helping kids understand money. Moneyasyougrow.org is a site that features 20 essential money milestones that kids go through from the age of three to eighteen.

OK, it’s a US site but loads of the common sense stuff applies here too.

As do the key activities that help kids to learn at each age stage. I’ve selected just one for each age group here:

3 – 5 year olds need to understand that you may have to wait before you can have something that you want (see my earlier blog on one thing to teach your kids)

6-10 years olds need to know that it’s good to shop around and compare prices before you buy

11- 13 year olds are advised to save a dime for every dollar they get (for kids in the UK that would be 10p in the pound, although I suggest a third is better)

15 – 18 year olds are advised to use cash rather than credit cards for purchases and the over 18s are told they should only use a credit card if they can pay off the whole balance in full every month.

Many of the money problems we see in adults have their roots in childhood. 
So many of us had little or no financial education as kids and grew up into financial illiterate adults. Others had parents who handed down such strict money rules that money strikes fear in them years later and they avoid responsibility. 
One way to stop this pattern repeating itself if you have kids is to start a simple money education as soon as they are old enough to reach up and hand their pennies over the sweetie counter. The moneyasyougrow site is a good place to start; there are also lots of tips in Sheconomics.

What ‘price’ do you put on being fashionable?

Fashion theorists often debate whether fashion liberates or enslaves women. Arguably, all fashions are enslaving. 

But some are more enslaving than others. 

Tight skirts restrict free movement.

Heels are one of the weird ways in which women
 are trapped by fashion,
according to Professor Mary Beard.

High heels make walking difficult and running nigh impossible.

And then there are nail extensions.

Nail extensions strike me as the most enslaving of all current fashions. Just when we’ve become liberated to the point where we can do virtually anything men can do, we go and turn ourselves into Edwina Scissorhands.

Modern handicapping?

In fact, the practice of affixing acrylic appendages to the ends of women’s fingers strikes me as the modern equivalent of foot-binding.

It undermine’s women autonomy. It stops them from performing a whole host of quotidien acts fundamental to life.I have normal, unextended nails. That means I am free to:

• Knead dough
• Tickle a baby
• Throw a pot on a wheel
• Sow seeds
• Caress my husband

without causing anybody grievous bodily harm.
I defy anyone to do any of those things in one-and-a-half-inch rock-hard chiselled and lacquered nail extensions (OK I just defy anyone to do the last one).
As Thoreau said, “The price of anything is the amount of life you exchange for it”
At the risk of getting my eyes scratched out, I would say any fashion that involves physical bonds is over-priced. Not just monetarily but in the treasured moments of life sacrificed for it.

I'm all for adornment, just not into self-crippling or self-handicapping adornment.  

Check this out:

The Body Adorned exhibition at the Horniman Museum explores how people clothe and adorn their bodies, with a special focus on London. Over time, saris, tattoo parlours, nail bars, distended ears and scarification have become a visible, everyday part of the London cityscape. But how did cultural adornments become integrated into urban London life? This exhibition invites you to look at how you dress your body and why. It’s well worth a visit.

The Body Adorned runs until

 6^th January 2013. 

www.horniman.ac.uk

Wardrobe Under Construction…and On a Budget

We are thrilled to have this guest blog from Jennifer Baumgarter, Psy.D. 

Jennifer is author of You Are What You Wear: What your clothes reveal about you. Here she shows you how to manage your wardrobe wisely.

These are tough financial times that we live in, but having a small budget does not mean that we need to skimp on style. Contrary to popular belief, you can build a fabulous wardrobe without compromising your credit! Here's how:

• Assess and Clean the Slate: The best wardrobes are built on items that are already in your closet. Before you shop, examine what you already have. Keep what works for your lifestyle, age, body, and coloring, and what actually makes you feel good. Remove anything that does not work with other pieces in your closet, has not been worn, does not work with your external self, and does not enhance the internal. The clothes that you choose to sell or consign will give you the seed money for new pieces.

• Find Your Look and Stick to It: Don’t walk out the door to shop until you know what your look will be. Use the pieces that remain in your wardrobe as a guide. Determine what your wardrobe classics are, not the ones that you are told are classic. If you are still having trouble, take the time to create a style file with magazine pictures or online images. You will notice a pattern of items and looks that you prefer, and it is those that you should shop for. Anything that doesn’t fit within your look, whether it be colourful or monochromatic, classic or trendy, safari or nautical, should not be purchased. This ensures that all items work together, and you will actually get wear out of what you buy.

• Less is More: Paradoxically, the fewer pieces you have in your wardrobe the more options you have. Spearheaded by Donna Karan in the 1980s, a capsule collection was composed of the least amount of pieces that would create the most outfit options. When you are on a budget you should focus on capsule pieces, such as a sheath dress, jean, blazer, or trousers, that will work in all seasons, for different events, throughout weight fluctuations, etc. These pieces must be multipurpose and multifunctional…and machine washable! If you must change things up for the season or trend, switch your shoes, jewellery, handbags, and other accessories that are often less expensive items.

• Shop Smart: Before you swipe that card or take out that cash, answer one question as objectively as you can: Is this item a need or a want? If it is a want, and you are concerned about your budget, put the item back. If the item is a need, buy if you are able to afford it. When buying during sales or in discount or second hand stores, where you may be more tempted to buy inexpensive items, ask the same question. This also holds true when shopping with friends or sales associates who might influence you to buy items when you don’t truly need them. Treating oneself is important, but if your financial situation does not allow for extravagances, buying out of want is merely a waste of money that is better suited for a need.

Read more on Jennifer's blog on The Psychology of Dress here. 

Follow Jennifer on Twitter: @drjennyb

Feeling down, dressing down?

Why do some women dress down? We probably all know a woman who, despite her model figure and gorgeous face, doesn't want to be noticed. So she wears camouflage clothes. Not of the army surplus variety, I mean clothes that blend into the background. Often her other half has an ego so huge she’s creeping around in his shadow.
It’s the human equivalent of the spectacularly flashy peacock with his bland bride.
It makes me wonder whether someone has told Kate Middleton to ‘tone it down a bit, love’ for fear she outshines her prince. We all know what happens when a royal girl does that.

Trouble is, if a woman is suppressing her appearance how much of her personality is she also giving up?

Not wanting to be noticed can have many root causes

Appearance anxiety

Appearance anxiety lies behind a lot of dowdy dressing. Many women suffer from body dissatisfaction, and even have feelings of disgust about their physical appearance. These women end up hiding from their own bodies. But they may also be hiding from themselves. Deep down there may be parts of their inner self they are denying. The answer might be to dress as the person they'd like to be, to try and trick the psyche into a more positive state. Try bright saturated hues, funky prints and playful accessories.

Comfort clothing

Everyone knows about comfort food. It’s the bad stuff you eat when you think you deserve it and can’t give a toss about the consequences. I think there’s comfort shopping too. And comfort clothing. The wardrobe equivalent of hob-nobs and chocolate cake. Clothes that are bad for you but beckon to you when feeling down. Jeans and baggy tops are the hob-nobs and chocolate cake of the female wardrobe, my recent research found. They’re comfort clothes that women reach for when they’re in the doldrums.  But when she sees in the mirror how rubbish she looks those negative feelings get reinforced. That's where a downward spiral can begin. But just as it's best not to have too many hob-nobs in the house if you've a biscuit habit, the trick here is to purge your wardrobe of those bad-for-you items too. Start by binning anything that's beige and boring.

Inner and outer happiness

Enclothed cognition

An outfit can both reflect and generate an emotional state. Recent research* shows that our clothes influence how we think and feel. So dressing down should be taken seriously. It could be a sign of depression, poor body image, even a relationship that’s off-balance. Researchers from Manchester  University** have shown that trying on unfamiliar clothes can influence both positive and negative mood states. Basically clothes can cheer you up or drag you down. So if you dress down don’t be surprised if you end up feeling a bit crap too. Perhaps the answer is this....

Happy clothes
I’ve been working with Vogue in Turkey to come up with ideas for mood-enhancing outfits. The prospect that an outfit could ward off depression is very appealing, a nice alternative to drugs.
More to come on that soon. Meanwhile I’m off to put on something neon-bright and snug-fitting. As soon as I’ve finished this chocolate cake.

Interested in the psychology of fashion? Then you'll love the guest blog coming later this week from Dr Jennifer Baumgartner, author of You Are What You Wear. Sign up to follow this blog now.

* Adam, H. & Galinsky, A.D., Enclothed Cognition, Journal of  Experimental Social Psychology (2012). doi: 10.1016/j.jesp.2012.02.008 **Moody et al (1996) An exploratory study: Relationships between trying on clothing, mood, emotion, personality and clothing preference Journal of Fashion Marketing and Management, 14, 1, (pp. 161 - 179)

Spring Clean Your Finances

On her financial coaching site Simonne has come up with 10 great suggestions to help you spring clean your finances.
These are simple and sensible things that we can all do to freshen things up in the money department.
She suggests you pick one and do it now.
It really is like a breath of fresh air.

I suggest you skip over there pretty quick and pick one of the ten, via this link.

On touching and being touched

“Just hold it,” I heard the man in the Apple shop say to the young executive who had been gazing longingly at the new iPad.

"Don’t touch it"  I wanted to say, "unless you really want to take it home with you."

Touching an object increases our desire for it.

Luckily I can hold back in these situations. I could get banned from so many shops otherwise. I wanted to warn the guy against touching because research shows that when we touch an object we’re more likely to buy it. 

In fact, once we’ve touched it we’ll pay more for it. 

If it feels nice that is. And, let’s face it, Apple products feel nice. Someone once described them to me as ‘lickable’. But going around licking stuff in shops would get us banned, so maybe holding them is the next best pleasure.

Touching increases sense of ownership

You see we’re used to touching stuff that we own. So, when we touch something in a shop, our sense of ownership is increased. And since we prefer the stuff that we own to other stuff, we’re prepared to pay more for it. No wonder so much impulse buying goes on.

An eminent media coach once told me to get my audience to pass a copy of my book to the person at the far back of the room. “Then everyone who’s touched it will want it,” he said. I've never tested that one out (just in case it got passed right back to me).

Touching changes the brain’s responses

Our sense of touch is so fundamental that we like to have it stimulated when we’re feeling a bit low. When young mammals are sick or lost, the brain tries to replenish them by making them more sensitive to touch. Then they enjoy a hug more and can re-bond quickly. It’s the same with consumers. Not that they are injured or have lost their mums, but if they feel a bit depressed their responsivity to the tactile aspects of goods is increased. So if you shop when you feel depressed, and touch a lot of stuff, don’t be surprised if your credit card feels the pain.

The brain changes in response to touch

Strangers: Hands off

We may like touching stuff in shops but we sure don’t want to rub shoulders with other customers. Research shows that even being brushed by a fellow shopper makes consumers more likely to head for the exit. Dr Brett Martin actually did an experiment to test this, half the consumers were brushed against while looking at a product, half weren’t (I know, us psychologists have all the fun). The  touched-ones left the store quicker and reported more negative feelings towards the brand afterwards, than those left ‘untouched’. So a store with narrow aisles crammed with goods is not making it easy for their customers to buy.

Touched babies say No to drugs

OK you might find the stuff about shopping and touching a bit trivial. But did you know that babies who get more cuddles are more able to resist drugs as adults?

Cuddle me cuddle my brain

This was first shown in studies with rats. Mother rats who were more nurturing and attentive produced specific changes in the immune responses in the brains of their pups, leaving them more able to resist the temptation of a dose of morphine later in life. So not only does a mother’s touch actually change brain functioning, scientists now think it’s also protective against later drug abuse.  

TIME ISA MONEY

In the words of that money saving guru, Martin Lewis, it’s crunch time.

The tax year ends on Thursday and if you haven’t used up your ISA allowance, quite frankly, you’re a bit of a mug. There are currently twenty-three million ISA accounts held in the UK. If you have savings you should consider joining them, before the shutters come down at midnight on April 5^th. 

Use it or lose it - there's still time to use your ISA allowance

Essentially, if you're getting a paltry rate of interest on your savings, the tax man will still want a slice of that interest. But stash that money away in an ISA and not only could you earn more interest (rates of up to 3.5% are on offer) but the tax man can’t get his grubby mitts on it. You, however still have access to the money because it needn’t be tied up for years. Seems a no-brainer to me. Little wonder that many people are treating ISAs as their new pensions.

Confession time. I realised today I hadn’t used my full ISA allowance for 2011/12. Everyone can invest £5340 in a cash ISA (that’s like a savings account with a set rate of tax-free interest) and £5340 in a stocks and shares ISA (where interest rates vary along with the vagaries of the stock market). I’d got the cash version but not the stocks and shares one. I asked myself why and had to admit it was probably because I understood the cash ISA more than the stocks and shares ISA.

Yes, I know I’ve written a book called Sheconomics. But I still have the same old blockers as most of you out there. And, as our behavioural change work shows, inertia is a very powerful force….

So I pulled out Sheconomics and re-read the bits about ISAs and, although the annual limits have gone up since we published in 2009, the same old advice holds true. It’s madness not to take advantage of this way of saving, to miss out on earning tax free interest. And you don’t even have to declare the interest on your tax return, making that onerous task easier too.

There's lots of free, useful and easy-to-understand info on-line

Next I set to and did a bit of internet research (bearing in mind advice in a previous blog from rplan to watch out for charges) and, with some help from Martin’s website above, found a Hargreaves Lansdown product that seemed to fit the bill. The HL form only took about 5 minutes to fill in and the information was easy to understand. Selecting a fund was a bit like sticking the tail on the donkey but their intro material had already provided some good guidance about safer and riskier options. 

My next step is to remind my husband to use up his allowance before midnight on Thursday. I’ve done the research for him so he’s got no excuses.

Then from Friday onwards, when the new tax year kicks off I can set up a regular ISA savings plan - most financial groups that run stocks and shares ISAs offer them. They allow you to smooth out the impact of fluctuations in share prices. The 2012/13 allowance goes up to £11,280 per person (all of which can go into a stocks and shares ISA or half into a cash ISA) meaning couples can save £22,560 and all the interest is theirs to keep.

Important ISA actions:

•     *  There’s still time to make the most of this year’s allowance - if you don’t USE IT you LOSE IT. 
•     *  You can open an ISA online or on the phone and most providers are open all weekend. 
•      *  Make sure you have your ID ready, know your National Insurance number and have access to the money you're investing (e.g. your debit card).
•      *  Don’t over-agonise about  your choice of cash ISA, just get one open. As long it doesn’t have transfer penalties you can always change later.

STOP PRESS: Check out Simonne's video on how to compare different cash ISAs.

The Psychology of...the Handbag!

'No, Alan, not like that, hook the handbag over your wrist and keep your palm turned upwards.'

Of all the directions I thought my career might take me, teaching Alan Titchmarsh to carry a handbag was not one I had imagined.
But I found myself doing just that recently, when recording a piece about handbags for the Alan Titchmarsh show (on ITV today, 3pm). 
Alan was such a good sport and minced onto the set carrying a gorgeous little snakeskin number, one of many designer and vintage handbags featured whose extortionate prices raised a few 'ooohs' from the studio audience.


We live in a time when the handbag has become the ultimate statement piece for women. And even in these days of austerity many women seem reluctant to ditch the designer bag. In fact for many, a touch of regulated self-indulgence feels more necessary than ever.

Why? 
Here are a few of my theories. Or what I call my 'handbagology':

Status symbols

“I loved all the admiring glances I got from my friends when I walked in with it.”

It used to be men who advertised their status,  with the flash car or expensive watch. Now women are earning more and competing at the top they too are signalling their status to others. They choose a bag  - usually a huge in-your-face tote - that says, I’m successful, I’m expensive, I’m chic. Many women at the top assess their own and other women’s status by the handbags they use.

Rule No 1: Your bag shouldn't weight more than you do.

Compensatory consumption

My research has shown that women spend more when depressed, believing a purchase will cheer them up. They might get a brain ‘buzz’ from buying it, but it may be short-lived and will not eliminate the cause of their negative emotions. Ironically, the harder the times the more women will seek solace in this way. And probably the bigger the bag the greater the void in their lives.  But beware. In the words of my friend Jessica Chivers, ‘Happiness is NOT a handbag!’

Celebrity worship

“I saw Beyonce with it in a magazine and so I had to have it.”

We’ve seen a huge rise in the cult of the celebrity and in the desire of women to emulate them. You may not be able to get the Beckham figure, millions or footballer husband, but you can get the bag. Or one like it. Some designers are cashing in on this and using celebrities to advertise their handbags, like Coach using Gwyneth Paltrow.

Rule No 2: Don't believe if you buy the bag you'll look this good

Believing a bag is an ‘investment’

I once heard a fashionista on Woman’s Hour declaring that she ‘invests in a designer handbag each season'. We delude ourselves if we view high-priced fashion items as an ‘investment’. Most aren’t. (Just to be safe, in case the bottom drops out of the handbag market or there’s a world clutch-bag crash, I’d recommend an ISA.)

Identity

“It’s a kind of passport into the business world. It says, ‘I’m worthy of a job in fashion’”

Humans have evolved to belong to a group, we crave to be seen by others and feel part of something. An expressive wardrobe is a way of signalling not just which group you belong to (teenage groups have their own cool trends which distinguishes them from others) but which you aspire to. Many feel a designer bag makes them seen and sends a message to others: I want to be one of the Gucci crowd, I’m a Prada girl. There’s even an optimal way of carrying it to show it off to the max. The logo is always displayed, the bag hooked over the wrist, palm held upwards.

Feeling fat? The bag always fits…

If women feel the urge to shop but are feeling fat they can buy a bag and it will always fit, whereas clothes are very figure-dependent. The same goes for shoes.

The power  - and cost - of the brand

"I know a lot of women who will starve to get a handbag. I’ve got a lot of friends like that.”

I came across the comment above on an online site (theartofthebag.org). Millions of pounds of clever marketing go into promoting and advertising designer handbags, and some women will even go into debt to have their bag of desire.

Creating scarcity

Luxury brand items are now more available – at airports, on the high street, online. So the marketers create a sense of scarcity by limiting the availability of certain items. This stimulates even more desire. Brain research shows we get huge pleasure not just from getting something but from anticipating having it. The luxury brands cash in on this by creating waiting lists, making women want it more and obliterating the difference between want and need.


All goes to show that a bag is so much more than somewhere to keep your purse and your keys!

Your clothes influence how you think and feel.

I never cease to be amazed at the myriad of tiny things that can influence our personal psychology. 

Like my recent finding that women who wear jeans are more likely to be depressed.

Or the finding that women do worse on a maths test when wearing a bikini. No kidding.

Or that sports teams who wear black behave more aggressively.

Or that wearing a lab coat makes you more conscientious.

The clothes you wear have the power, literally, to change your mood or change your mind. 

That’s pretty amazing if you ask me. Psychologists even have a name for this, they call it enclothed cogition. It all goes to show that we should think very carefully about what we pull out of the wardrobe in the morning.

Sad? Jeans can be a giveaway. Photo credit Daily Mirror.

I asked 100 women what they wore when feeling depressed. More than half of them said jeans (that’s almost double the number who would wear jeans when feeling happy).

Also 57% of the women said they would wear a baggy top when depressed, yet a mere 2% would wear one when feeling happy.

The women also revealed they would be ten times more likely to put on a favourite dress when happy (62%) than when depressed (6%).

Accessories can make a difference too. My study found that:

·      Twice as many women said they would wear a hat when happy than when depressed.

·      Five times as many women said they would wear their favourite shoes when happy (31%) than when depressed (6%).

It seems that ‘happy’ clothes - ones that make women feel good - are well-cut, figure enhancing, and made from bright and beautiful fabrics. The opposite of most jeans in fact.

Since clothes can exert an influence over our psychological processes pulling on a pair of jeans and a baggy top because you’re feeling a bit low could actually make you feel more depressed.  

So the recipe for happiness? 

Well, as we say in our behavioural change work, it helps to act the opposite of how you feel. To do something different. 

So if you're a bit blue, put on a happy dress!

Do you know how much you are paying for your ISA investments?

(SPONSORED POST)

We (rplan) did some research and found that 89% of people had no idea how much they were paying for their ISA investments (and that's excluding the 30% who thought it was free.) 
In reality, you are most likely paying two sets of charges: when you buy the investment (the initial charge), and then on an ongoing basis (usually calculated annually.)
Why is this important? The charges can have quite an impact on your investment. 

ISA charges can seriously affect your investment

For instance, the initial charge can be up to 5% of your investment; the ongoing charge is usually around 1.5% for funds, and less for passive funds or ETFs. Over 10 years, these charges add up.
We found that the difference between the most expensive and a cheaper option could be up to £6,300 if you invest the full ISA amount each year. That's a big difference.
This is why we created a tool to see how much you could save on your investments by switching service provider. 

The tool is available here - it is free and easy to use. 

Simply enter how much you have invested currently and your current provider, and see how much you could save.
The charges you pay go to the fund manager (you are paying them for performance) and to the service provider (you are paying them for service.) Your service provider could be a financial adviser (IFA or bank), a broker, or an online service. In the case of a financial adviser, you are paying for the quality and frequency of the advice; in the case of a broker or online service, for their tools and customer service.
The key to understanding whether you are getting good value for money is understanding how much you are paying. Armed with that knowledge, you can then decide whether you are truly spending with power; and the savings could be significant.


Blog post by rplan.co.uk