Awhile back I received a review copy of Larry Winget’s “You’re Broke Because You Want to Be,” and I finally had time to sit down and start paging through it. In case you’re not familiar with him, Winget is a personal finance author and TV personality with what can only be described as a ‘no holds barred’ personality.

Anyway, in reading through the book, I was struck by the following passage:

The only thing kids know about money is what you teach them. You set the example. Don’t expect your kids to learn how to spend their money wisely if they have watched you piss yours away on stupid stuff. Your choices will become their choices. Every dime you spend shows them how to spend their money.

I couldn’t agree with this more. While many people (ourselves included) often go to great lengths to teach their kids about money by paying them an allowance, it’s easy to forget that kids primarily learn by example. If you set a good example for your kids and they’ll learn the right lessons. If you don’t… Well… They won’t.

If you’re anything like us, you’re always looking for ways to save a few extra bucks for college. With that in mind, I wanted to point out that Upromise is currently offering a $10 bonus for creating and activating your new account (it’s free!). In case you’re not familiar with Upromise, it’s a college savings program that allows you to earn cash rewards on your everyday purchases. [more]

I’ve written in the past about the Child Tax Credit, so I though I’d go ahead and update the information for this year’s taxes based on current IRS guidance.

In short, the Child Tax Credit the federal income tax that you owe by up to $1,000 for each qualifying child under the age of 17. In other words, it’s not a deduction (which reduces your taxable income and thus reduces your taxes fractionally). Rather, it’s a credit that gets taken straight off the top of your tax bill.

According to the IRS, a qualifying child is a child who:

1. Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew),

2. Was under age 17 at the end of 2007,

3. Did not provide over half of his or her own support for 2007,

4. Lived with you for more than half of 2007 (see Exceptions to time lived with you below), and

5. Was a U.S. citizen, a U.S. national, or a U.S. resident alien.

Furthermore:

A child is considered to have lived with you for all of 2007 if the child was born or died in 2007 and your home was this child’s home for the entire time he or she was alive. Temporary absences for special circumstances, such as for school, vacation, medical care, military service, or detention in a juvenile facility, count as time lived with you.

The maximum credit that you can claim is $1,000 per qualifying child. This is potentially, a “refundable” credit, so if your credit exceeds you tax liability, you need to fill our IRS Form 8812 to see if you qualify to claim more than you owe. Also, this credit is subject to income limits based on your modified adjusted gross income (MAGI), with the following thresholds:

Married filing jointly: $110,000
Single, head of household, or qualifying widow(er): $75,000
Married filing separately: $55,000

So if your MAGI is above these limits, the credit is phased out. Unfortunately (or perhaps I should say fortunately), we’re now beyond the phase out range, and thus can’t take advantage of this.

With the holiday shopping season fully upon us, I just thought I’d throw out this quick money-saving tip…

As you may or may not know, Amazon has a 30 day price drop policy. In other words, if they lower their price on something that you’ve purchased within the past 30 days, they’ll issue a credit. The catch here is that you have to ask for it. [more]

I’ve written in the past about the allowance system that we use with our kids. In short, we give them $0.50 per week for each year of age. Thus, Son #1 (who just turned ten) now gets $5/week, Son #2 (currently seven) gets $3.50/week, and Son #3 (currently five) gets $2.50/week. These funds and then subdivided into charity (10%), savings (30%), and spending (60%). The kids get to pick their own charity (with some help from us), their savings go into a subaccount at ING Direct, and their spending money is theirs to do with as they please (within reason, of course).

This system has worked very well, and our kids have learned some great lessons. They’ve learned the value of a dollar, how to save for big ticket items, how to splurge without going broke, and they’ve even learned the value of matching funds. Best of all, they’ve also stopped pestering us for stuff when we’re at the store. If they can’t afford it, they can’t have it, and they understand that.

Now that our youngest is about to turn three, it’s nearly time to get him in on the action. As I’ve noted in the past, we’ve found that our kids are pretty interested in money — or at least buying things — by the time they turn three. Just as importantly, they’re also patient enough to site alongside you while you count out their money and hand it over to them. I’m not sure if all kids are that way, but I see no reason to change things up in our case. If anything, Son #4 is far more precocious than his older brothers, and I’m sure he’ll love the freedom to make some buying decisions of his own.

Awhile back we received an e-mail from a reader asking about the “real” cost of raising kids. In short, she’s heard a lot about the high cost of raising kids, and was wondering if it’s really as bad as people make it out to be. More than anything, this question seemed to have been born out of angst over what it takes to be financially “ready” to start a family. [more]

Don’t forget… If you live in the following states, your state sales tax holiday is starting this weekend:

Alabama, August 3rd-5th
District of Columbia, August 4th-12th
Georgia, August 2nd-5th
Florida, August 4th-13th
Iowa, August 3rd-4th
Missouri, August 3rd-5th
New Mexico, August 3rd-5th
North Carolina, August 3rd-5th
Oklahoma, August 3rd-5th
South Carolina, August 3rd-5th
Tennessee, August 3rd-5th
Virginia, August 3rd-5th

In contrast, residents of the following states still have a bit of time to get ready for their tax holiday:

Connecticut, August 19th-25th
Texas, August 17th-19th

If you’re lucky enough to live in a state that offers a sales tax holiday, be sure to use it wisely… Don’t go out and buy stuff just because it’s tax free.

For full details: 2007 State Tax Holidays

While I realize that this isn’t exactly a parenting-specific topic, we can all use a bit of extra money now and then, right? Well, in that context, I thought I’d point out an article that I recently wrote on how to get up to $700 $800 in free credit card bonuses from a handful of card issuers. Who know, you might just make it through the back-to-school shopping season with a bit of extra jingle in your pocket after all!

It’s that time of year again… Back-to-school shopping is just around the corner. What follows is a list of state sales tax holidays that are scheduled to take place during the back-to-school shopping season. In each case, I’ve listed the pplicable dates, the items covered, and the maximum values of eligible items (if applicable). So there you have it… Go forth and buy tax-free goods! [more]

Did you know that the Australian government is paying people to have babies? In an attempt to increase their birth rate, they’re paying mothers a one-time bonus of $4,000 following the birth of their children (the bonus will increase to $5,000 in July 2008). [more]