A long time ago, I wrote a brief article about creating a visual debt reminder, something that will help motivate you towards getting rid of debt. Since then, I’ve found myself using such reminders all the time for keeping my finances in order.

The Psychology of the Reminder
A reminder? If a goal is really important to us, why would we need a reminder?

It’s simple. Most of us have really busy lives, and in order to actually make those lives work, we have to adopt some serious routines. If you have only thirty minutes after you wake up and before you’re leaving for work, those thirty minutes are going to have to involve some serious routine - showering, brushing your teeth, eating a quick breakfast, doing one or two other little things, then bolting out the door.

Similarly, any person with children knows how many routines have to go into their life in order to prevent complete chaos from breaking out. There’s a meal routine, a nap routine, a bedtime routine, and so on.

Even our lives out and about are filled with routines - we shop at certain places, get gas at certain places, use the same routes to get places, and so on.

The real kicker is that breaking these routines is hard. Often, it’s not so much the individual act that’s the problem - it’s remembering that individual act and finding a place for it in that busy routine.

For example, I’m trying to find space in my daily routine to (slowly) work up to being able to run a 5K. The problem is, with a thriving writing career, two young children, a marriage that needs care and feeding, a number of other commitments, and personal interests as well, it’s hard to find space for the training.

So I’m using a reminder. I have a single bright note right on my desktop where I can’t miss it that says, “Have you worked towards the 5K today?” I look at it several times a day and, usually the first time I see it, it motivates me to get up and do something to get myself in better shape.

Ten Great Reminders
Different reminders work well for different people and different situations, though. Here are ten things you might want to use in your own situation.

1. The Progress Bar
This works great if you have a specific numerical goal in mind - for example, you have a certain dollar amount that you’re wanting to save, a certain amount of debt that you’re looking to repay, or a certain weight that you’d like to reach.

It’s simple: just bust out a piece of graph paper (like this one). Figure out what number you’re targeting and what number you’re at now. Then, break the difference between the two down into equal pieces. So, let’s say you have $17,000 in debt and want to pay it all off. You might break it into 17 pieces - $1,000 each - or 34 pieces - $500 each - or 85 pieces - $200 each. Let’s say you want to go from 214 pounds to 180 pounds. You might break that into 34 pieces - 1 pound each. You get the idea.

Then count out a line of that many squares in the middle of the paper, then draw a big box around those squares, similar to what you see on the right here. Write the starting number on the left or bottom of the bar, then the finishing number on the top or right of the bar. You can even write in the increments if you want, or just note what each square is worth.

Then put this reminder somewhere where you’ll see it all the time - on the fridge, for example. It’ll serve as a reminder of your progress - plus, it’ll be quite fun when you make some forward progress and get to fill in a square on that bar.

2. The Pointed Note
This is the technique I’m using for my 5K goal. Just write yourself a very pointed note - “What have you done today to move forward on X?” and put it somewhere where you’re going to bump into it over and over again.

This is perfect for a goal where you need to make a bit of active effort each day - like athletic training. It might be easy at first to simply forget about it during a busy day, but that note forces it into the forefront of your mind.

The key is to make the note pointed - it needs to prod you into taking action - and put it in a place where you’ll be reminded of it with ease every day - or at least each day that you’ll need the reminder.

Some ideas for this kind of reminder: a reminder to network, a reminder to engage in athletic activity, a reminder to take another discrete step on a big project.

3. The Big Picture
One of my biggest goals in life is to own a house out in the country on a few acres. I’d like a good-sized yard with plenty of room for a vegetable and herb garden and a small barn in the back somewhere to effectively function as a large shed. I might even raise a few chickens on it - who knows!

To keep this in mind, my desktop wallpaper is an image of a nice house in the country with a small barn and a windmill. Whenever I see it, I know what my big goal is.

This can work for any big goal that requires continual multi-dimensional effort to reach. It might be a country home, or it might be any number of other things - a great career, an amazing car, or a happy marriage. Find a picture that signifies exactly what you want, then put it in places where you’ll be reminded of it time and time again.

That little boost will push you, more often than not, just when you need it.

4. The Effort Tracker
As I start jogging more and more, I find that keeping careful track of my efforts and recording them somewhere is very powerful. I have a Nike+ iPod setup that makes it very easy to record my efforts, keeping track of each run in very careful detail, as well as my best mile and my overall averages.

This type of data is incredibly psychologically powerful. When I finish a jog, I can’t wait to go look at my data. Did I get a new “best mile”? Did my average go up (it usually does)? Did I manage to maintain a steady pace?

Putting this “effort tracker” front and center makes it easy to keep up with my goal. The same is true for any such tracker. Perhaps you use Quicken to monitor your money? Have it start when you start up your computer. Maybe you use a spreadsheet to keep track of your weight? Have that spreadsheet appear on startup. That way, you’re faced with all of that data and all of that forward progress - and psychologically, you want to keep it going.

5. The Public Notice
Constant peer pressure can be a very effective reminder of your goals. If everyone around you knows that you’re attempting to quit smoking, they themselves will become reminders, encouraging you to quit, complimenting you on your good choices, and so on.

Thus, one way to create some powerful reminders around you for your goal is to simply email as many people as you can and tell them in detail about your goal. Tell them what you want to achieve and ask them for their help in getting you there. Ask them to steer you straight if they see you having problems, and apologize in advance if you don’t handle their help well (since such goals can be psychologically stressing).

Once you’ve done this, everyone knows about your goal and you’ve given them all permission to be your reminders. Thus, their mere presence becomes a reminder of what you want to achieve.

You can take this another step and combine the goal tracking with your public notice. Create a blog or a Twitter account to talk about your goal in detail, mentioning your progress with specific data, then ship the URL for that blog or Twitter account to your friends so they can keep tab on your progress (and leave positive comments).

6. The Pestering Email
Another way to keep you on focus is to have an automatic email service pester you with reminders by email of your goals. I do this myself, with Google Calendar. I set various target dates in my calendar, then order the calendar to remind me by email of these goals. Sure enough, they pop right into my email inbox, reminding me quite clearly to keep up with a particular project.

For example, let’s say you want to really grow your professional network. Go into Google Calendar, schedule an entry on Friday to “send an email to an old work associate,” then add a reminder 4 days, 3 days, 2 days, one day, and one hour in advance. Then, schedule it to repeat. Each day, you’ll have a reminder telling you to send an email to a work associate - and when you follow through, you’re achieving your big goal.

For people who live out of their email inbox (as I often do), this can be a great way to keep your goal in mind - and keep moving forward on it, bit by bit.

7. The Buddy
Having a buddy who is also trying to move forward with a similar goal as yours can be a wonderful constant reminder of your own personal goal.

Let’s say you’re attempting to eliminate all of your credit card debt. You announce it to a few friends and you learn that one of your friends is actually attempting to do the same thing. Suggest to that person that you buddy up to motivate each other, share tips, and share your progress along the way.

When you hang out together, you can swap stories about how you’re moving forward. You can give each other tips on how to better accomplish that big goal. You can actually engage in the activities together - jogging in the evening, for example, or going to free events together instead of spending money.

That buddy becomes a walking, talking reminder of your goal and, in a fun way, pushes you to achieving more than you thought possible.

8. The Inspirational Picture
My family inspires me to make almost every good choice I make in my life. They inspired me to take charge of my money. They inspired me to start getting in better shape. They inspired me to take a real swing at writing for a career.

Keeping a simple photograph of my wife and children with me helps keep me motivated to continue making good choices. I have three photographs of them on my desk and I often look at them when I’m having some trouble getting motivated to write. Their faces always help.

Some people get their inspiration from motivational posters. For me, all I really need to do is look at my family and suddenly I’ve got my eye back on the prize.

9. The Repetitive Post-It
When I first made a serious effort to cut my spending, I found it was very hard to break my old routines. I would simply wheel into the bookstore without thinking about it at all and the next thing I knew, I’d be standing in line holding some books.

What really helped was repetitive reminders, which took the form of Post-It notes. I wrote on each one: “Don’t spend anything.” I put them all over. I put one on my dash and one on my rear view mirror. I put one on my computer monitor. I put one on my wallet so I’d see it when I got started in the morning.

Those constant reminders kept the big picture firmly in my head, mostly because the message was nearly inescapable. I saw it all the time and that meant it bubbled up to the top of my mind when I needed it much more often than before. Before long, that reminder was burned into my brain - and the Post-Its had done their job.

10. The Tool Disfigurement
There were times when I would still fall short and find myself on the verge of spending anyway. I’d have an item up there to buy. I’d reach for my wallet, pull out my credit card, and ….

Right there in front of me was all I really needed to see. I’d put the item back and walk out of the store.

What was there? Wrapped around my credit cards was a picture of my son. Yes, the inspirational picture had found its way directly to the tools I used to undermine that inspiration. Seeing my little boy - and reflecting for just a second on him and the good choices I needed to make as a parent - made me step back just long enough for sense to take hold of me.

If you find yourself constantly turning to a tool of some sort to continue a habit you’re trying to break - a bong, a credit card, anything like that - put an inspirational picture there. Put that picture of your kid right on that item and attach it firmly. Make it so that you have to give that reminder a look before you commit that act - and you’ll likely find yourself turning away at the last minute.

Now get out there and achieve something great.

As I’ve mentioned before on here, my family did not have a lot of money growing up. My parents were always able to make ends meet and keep dinner on the table, but there was never really a sense of getting ahead. Instead, there was always a sense of just barely enough.

That’s not to say that I had a deprived childhood, though - I didn’t. My parents - my mother in particular - found lots of little ways to get me the things I wanted or needed. We went to the library all the time. I was always allowed to get a book or two from the book order. And when there were windfalls, I would often get something very nice - a new video game, typically, or a few new books all at once.

One thing my parents often did, though, was make Christmas and my birthday into very big events. They would ask me what I wanted months in advance and encourage me to make lists. Since my birthday was in the middle of summer, by the middle of most springs, I was already puzzling over my birthday list, letting it often consume my thoughts. Similarly, I was already getting started on my Christmas list by Labor Day.

My parents did this for what seems like a very good reason. Since there weren’t a lot of resources around to give me a healthy allowance or to buy me lots of things, they would instead channel my childhood desires towards two big days. Then, they would save up their nickels and dimes and try very hard to make my birthdays and Christmases memorable.

This was really effective in my childhood years. Instead of nagging my parents for things I wanted, I’d stew on them. I’d write down a wish list, revise it, and start over again a few times. I’d pore over the Christmas catalogs like a researcher in the library of Alexandria.

What really happened, though, is that these things that I wanted consumed my thoughts for a big part of the year. I’d spend my time stewing over that list, thinking about the things I wanted, and as I grew older, I began to dream about other ways to get them. I started an aluminum can collecting project - one that actually ended quite sadly, I started doing lots of piecework for my father’s fishing business, and I tried several other small-scale entrepreneurial tasks.

But the problem signs were already in place. As soon as I earned anything, I was already plotting about buying one of those things I had wanted and stewed about for so long. I’d take the $50 from aluminum can sales and rush straight to the local department store (Jacks, a now-defunct chain) to buy a video game.

This only escalated throughout my college years, and by the time I was a young adult, I was still focused heavily on the material things I wanted. Of course, then, with a nice income and access to credit cards, it became very easy to just simply go get all of those things I wanted.

And I did.

I bought multiple DVDs and multiple CDs and a video game pretty much every week. I went out to eat all the time. I went to London and stayed in a hotel room overlooking Hyde Park.

In short, I no longer had a wish list. Instead, I just did these things as they came to mind. All that stewing about the things I wanted finally came to fruition.

How I Fixed This
So what did I do to fix this problem?

The biggest realization - for me - was that this was a never-ending road. There would always be something else to want, no matter what I purchased for myself. I would always be wanting something more.

Thus, if that’s true, isn’t all the money spent trying to sate those desires just money wasted? Even worse, wasting all that money meant that I wasn’t achieving the big things I dreamed for in my life - becoming a writer, providing a safe financial foundation for my wife and my kids, owning a nice house in the country.

What I found was that if I cut back big time on my discretionary spending, I didn’t really lose much at all. Sure, there were still many things that I wanted - and there still are - but that would be true regardless of how much I spent. Instead, now I’m actually using and enjoying the things that I buy. On the occasions when I do choose to buy something for myself, I take my time both on the purchase (researching it and choosing the best deal) and on the enjoyment of the item (reading the book, playing through the video game, and so on).

The “wants” are still there, but they no longer run the show in terms of my spending, simply because I realized that no matter how much I spent, the “wants” would still be there - a ghost I could never catch.

The Parenting Hat
So what can we do to help my children out with this issue?

Our first tactic is to simply strongly de-emphasize wants. We don’t ask for birthday lists or Christmas lists. Instead, we just listen to them and note down anything they might mention.

During the lead-up to the holidays, our gift-related conversations revolve around giving. We talk about good, reasonably-priced items that people would particularly like. Instead of focusing on what we want, we focus on what Luke or Brittany might want - and how we can make them happy for a reasonable cost.

Second, we don’t watch many commercials - and we talk about the ones we do. If my son sees a commercial for a toy or a type of junk food that makes him want the item, even though he’s three, we talk about it a bit. I usually point out how only the good side is shown - and how we already have similar things.

A great example happened a few evenings ago. My son saw a commercial for some type of Batman action figure - he wanted one, and he told me loudly. First, I suggested that he instead play with the action figures he does have (mostly leftovers from my own childhood, honestly). He said he didn’t want them - instead, he wanted Batman. So, then, I suggested if he didn’t want them any more, why don’t we give them away to kids who might want them? He didn’t like that suggestion at all, at which point I suggested that he pull out his favorites and we’d get down to business. By that point, he had completely forgotten about Batman and instead found himself excited to pull out the action figures he already had.

I really believe this is the key. Instead of focusing happiness on things he doesn’t have, I strive to focus his immediate joy on the things he already has. That way, he doesn’t have that burning desire for more things.

This question has been on our minds quite a bit recently, as our three and a half year old son continues to grow and mature. We’ve long planned on giving our children small allowances that are not tied to household chores, and now we’re actually faced with a child that’s nearing the maturity level to understand it.

He understands that money is used to buy things. In order to get an item, you have to exchange some amount of money for it.

Similarly, he understands that there is only a limited supply of money. There is not an infinite amount of money - in fact, in his world, there’s not much money at all. Thus, you can’t simply buy everything you want.

He also understands that different items have different prices. You don’t have to give much money for some things. However, you have to give quite a bit of money for other things. Not all items have the same price. He also understands that saving your money is worthwhile, though this lesson has been guided greatly by Mom and Dad.

Finally, he can count to twenty with ease and count quite a bit higher with some coaxing and concentration. He can not only count abstractly, but he can also count items: coins, chocolate chips, and so on.

From my perspective, this means he’s ready for an allowance (though my wife and I are still discussing it). On the other hand, I know other parents of children as old as six who don’t feel their child is ready for an allowance.

Our goal with giving an allowance is straightforward: we want to teach him the value of saving, charity, and money management through his own experiences.

However, with such a decision, we’re left with a number of additional questions.

First, how big should his allowance be? There’s a fine balance to achieve here. It needs to be enough so that it’s relevant, but not large enough so that he’s spoiled. I’m leaning towards an allowance equal to his age in dollars - so, $3 now, $4 when he turns 4, and so on.

Second, what kind of restrictions should we put on it? From my experience, an allowance given with no restrictions often winds up being spent on bubble gum, which kind of defeats the purpose.

I’m leaning towards the Money Savvy Pig philosophy. To put it simply, it has the child split his or her allowance into four piles: spend, save, donate, and invest.

The “spend” pile is straightforward - that’s his money to do with what he chooses. If he wants to take his money and buy a Hot Wheels car with it, he can. If he wants some bubble gum, he can buy it.

The “save” pile is similar - he can spend it on whatever he wants, but it has to be a defined large goal. Perhaps he wants another track set for his wooden railroad, for example, or maybe he’d like to buy a Christmas present for someone with his own money. This would build up over many weeks, and if he chose, he could contribute more from his “spend” pile towards it.

The “donate” part allows him to choose every so often (once every three months or so) to give the money to a cause of his choosing. This would open the door to a lot of discussion about others in need and allow us to introduce charities to him. I know a child who saved for two or three years and donated a whole heifer via Heifer International, for example.

For his purposes, the “investing” part will be a very long term thing - he can watch it build and build and build, then when he’s older, we can use that money to begin learning how to invest it for the future. I’d love it if he took some of the quarters he saved when he was three, invested it somewhere, and used all of the proceeds to buy a house when he’s a young adult.

If we go down this path, we may start the allowance by giving him such a “savings pig.”

Third, what about his younger sister? There’s also a twenty one month old girl in our home, one who doesn’t have the foggiest idea about money yet. Before long, though, she’ll become aware of it - and she’ll be aware that her big brother is getting an allowance.

We’re not sure how to handle this. Should we give her a very small “spend”-only allowance for now, changing it when she reaches age three or so? Or should we just wait entirely until she’s old enough to understand the ideas? We’re leaning towards no allowance for her for now, making it clear to our son that he’s getting the allowance because he’s older.

Our goal in the end is to teach our children why it’s awesome to save and plan ahead. Your comments and thoughts on this plan are greatly appreciated.

Yesterday, I mentioned offhand the value of having things on hand to entertain and create special moments for children. Things like this are easy to plan ahead for, easy to bargain hunt for, and can really come in handy on a rainy day or other unexpected event. It can also be useful to have on hand if you don’t have children of your own, but occasionally have young visitors.

So what kinds of things do we have in our rainy day box? (Note that we use many of these items in other situations, too, but it’s useful to have all of this stuff collected in one place so you can easily find it.)

A big box Any sort of box will do - it just needs to be of good size to store quite a few items. A pair of large shoe boxes can do the trick - and it’s a great way to reuse shoe boxes. In fact, the first “rainy day” project can actually involve decorating the boxes.

Drawing paper You can get a ton of drawing paper for just a buck or two by buying an end roll of paper from your local newspaper office. This paper is perfect for other projects, too, like paper pirate hats.

Pencils Keep your eye open for free pencils and pens, particularly at hotels or other such places. I unabashedly grab quite a few when I see them - they’re given away for advertising purposes, after all, so I have no qualms collecting them.

Crayons I tend to believe a giant box of crayons is the best $5 item you can buy for a child, but that doesn’t mean I don’t watch carefully for sales on crayons and washable markers.

Food coloring There are lots of different kid-friendly projects that can really utilize food coloring, so just look for a good deal on vials of coloring, particularly red, blue, and yellow coloring (as you can mix these to get many other colors).

Glue, tape, and safety scissors These tend to be overstocked around the time school starts, then they tend to be on sale in late September and early October. These are great items to get at a dollar store.

Paints and paintbrushes Keep any paintbrushes you find in miscellaneous art sets that your kids get (my kids have received several for gifts). Then, make your own paint: mix 3 tablespoons sugar, half a cup of corn starch, and two cups of cold water. Cook it in a pan, bringing it almost to boiling, until it thickens, then stir in a teaspoon of liquid dish soap. Split it into four roughly equal amounts (in small cups or dishes) and stir in some food coloring into each - it works great for simple art projects.

Small beans Buy a bag of beans for a kitchen recipe, then save half a cup of them or so in a small baggie for later use. Beans make a great addition to art projects. You can do the same thing with cereal (like Cheerios).

Construction paper / cardboard Pieces of unmarked cardboard are well worth saving in this box. Shirt boxes are great sources for this material, as are

Old magazines Keep ten or so issues of old magazines in your art box. Old magazines are great sources for collages, and these work even for three year olds. For example, I’m planning on helping my son hunt through these for big examples of the letters in his name and making a big collage out of them.

Old wrapping paper Similarly, keep sheets of old wrapping paper. Just carefully unwrap presents, fold up the sheets, and tell people you’re saving them for an art project for the kids. Wrapping paper can make a great background for various projects.

Old greeting cards Greeting cards (particularly the flood of them that people send for Christmas) are a great source for elements for collages as well.

Paper towel, wrapping paper, and toilet paper rolls Tubes like these can be musical instruments (blowing through them or using them as drum sticks) and structural pieces for building models.

Recipes Not recipes for food per se, but recipes for things like play dough and bubble solution. Having these recipes in the box is often a great reminder to go make a batch of these things if we have the ingredients on hand - and given that such things are usually made from kitchen staples, we usually have them. Bubble solution? Dish soap, cold water, and a spoon full of corn syrup. Play dough? The easy “Mister Rogers” recipe is just two cups of flour and one cup of water, which literally makes dough, but a better recipe is one cup of flour, one cup of warm water, two teaspoons of cream of tartar, one teaspoon of oil, a quarter of a cup of salt, and food coloring (for color). Cook this over medium heat and stir it until it’s smooth, then knead it until it’s doughy.

Music Finally, include a few CDs worth of catchy, upbeat music that appeals to both you and the kids. We’re big fans of They Might Be Giants’ Here Come the ABCs. If you want to save some on this, just download legal mp3s of the music and burn your own CD (or use another music device). I don’t advocate piracy, but if you look around, there are lots of great legal sources for inexpensive and free music of all kinds.

A rainy day box can be a lot of fun for kids and adults alike! Good luck!

Fairly regularly on The Simple Dollar, I mention that I’m investing in 529 college savings plans for my two children. Each month, I automatically contribute $100 to each of their plans - and I’ve considered contributing more than that.

But what’s a 529? Erin writes in with a typical query:

You write all the time about saving for your kids college education in a 529. What is that? How do you do it?

Let’s dig in.

What Is a 529?
A 529 plan is simply an investment account with a few tax advantages that make it very useful for saving for higher education. To be specific, any interest or investment income earned in the account that is then used for higher education is exempt from federal taxes (and from state taxes in many locations). In some states, the contributions themselves are deductible from state taxes.

There are two types of 529 accounts: prepaid accounts and savings accounts. Prepaid accounts are used to purchase tuition “credits” at certain institutions at current rates, so, for example, you might be able to purchase a semester’s worth of tuition at East Overshoe Tech at the current rate of $10,000 a semester, but in fifteen years when your child is actually attending the school, tuition might cost $20,000 but you won’t pay a dime - you’ve already purchased that semester.

On the other hand, savings accounts are basically just investment accounts - you contribute money, it goes into the stock market or into bonds, and any gains you earn stay within the account. When the account’s beneficiary goes to college, the money can be used at any school. In other words, savings-style 529s are more flexible, but they often don’t return quite as well (since higher education tuition growth is usually greater than the stock market).

Most states have their own 529 plans with specific rules; however, many states have plans that are open to people from other states to contribute.

Another important aspect of 529 plans is that the beneficiary does not control the account - the person that opens the account controls the money. This is a great protection, as it keeps overzealous children from “cashing in” on their college savings.

How Do I Do It?
My investments go through College Savings Iowa. This offers me a number of specific benefits.

First, as an Iowa resident, my contributions to my children’s plans are deductible from state income taxes. Largely because of these contributions, we received a refund on our state taxes this year, while we had to pay in a small amount on our federal taxes.

Second, College Savings Iowa uses Vanguard to manage their investments, and Vanguard is a company I already trust with my retirement savings and other investments. The plan offers quite a few stellar investment choices - I’m currently using the “aggressive” target investing plan for both of my children, which is a low-cost collection of index funds that strive to earn large returns.

Third, the plan is tied in directly with Upromise. Once I signed up with this program, a small percentage of our credit card usage goes straight into those 529 accounts. It’s usually a small amount each month, but this money is essentially an additional free contribution to my children’s college savings plans.

How Do I Sign Up?
First, you need to decide which plan to use. Most states offer their own 529 plans, but they all vary quite a bit. You should start by seriously considering the plan in your own state, because many state plans offer income tax breaks for state residents - you can find your own state’s plan by Googling your state’s name and 529.

If your own state doesn’t offer a plan or only offers a plan you don’t like (such as a 529 that only allows prepayment of tuition to universities you don’t like), look at plans available in other states. Liz Pulliam Weston at MSN MoneyCentral has identified five great state plans, for starters.

Once you’ve signed up, you’ll set up an automatic investment plan that draws whatever amount you specify each week or month from your checking account and puts it away for your children’s education (or your grandchildren’s education … or your own). It’s quite easy, and it’s a great way to get started with college savings.

A reader recently pointed me towards an interesting article at MSN MoneyCentral on the topic of restricting the access that teenagers have to credit cards. Much of the article discusses the proposed Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (S. 414, sponsored by Chris Dodd, and often called the Credit CARD Act of 2009), which Weston summarizes as such:

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 would forbid card issuers from opening accounts for people under 21 unless one of these criteria is met:
+ A parent, guardian or other responsible individual agrees to co-sign for the debt.
+ The applicant provides proof he or she can independently repay the debt.
+ Proof is provided that the applicant has completed a certified financial literacy course.

I understand where this bill is coming from and I agree with it in large part, but I would be opposed to it overall. Let’s look at both sides of the coin.

What I Like About the Bill
When I was a new college freshman, I signed up for a credit card in exchange for a t-shirt, then I began to use it for all kinds of stuff - video games and so on. In short, I acted like a fool with that credit card - a card I would have never had if this act had been in place.

A bill like this would unquestionably have kept me from getting into this early credit card debt. My parents would not have signed off on such a card and thus I would have been forced to learn how to manage the money from my part-time job more carefully, teaching me some valuable budgeting lessons.

I also strongly agree with the idea of basic financial literacy being a requirement for credit card use, though I’m not convinced at all that this is the way to do it.

What I Don’t Like About the Bill
What I don’t like about the bill is that it takes away personal responsibility in two different ways.

On one side of the coin is the fact that many people under the age of 21 are fully independent and have their head on their shoulders. One individual I know had a very successful business he was running himself at age nineteen. I know several others who have been through trade school and are embarking on plumbing and electrical careers at that age. Why should these independent and self-motivated individuals be required to find someone to co-sign with them for a credit card?

On the other side of the coin is the lessons learned from credit card ownership, which might actually be easier before age twenty one for many. I didn’t figure out how to use credit cards sensibly until age twenty seven, but I’ll be the first to admit that I didn’t receive a great education on how to use them and what their role should be in your life. If I had, I might have been able to make sense of my earliest credit card troubles (when I was in college) when the amount of debt wasn’t that much at all. For many people, college is a time to learn and make mistakes and grow - this bill just offers more hand-holding.

For me, the negatives of this bill outweigh the positives.

Is There A Better Solution?
The solution needed here is pretty simple - there is a desperate need for better consumer education. Consumer education should be a part of the school system from the earliest stages. Reading, writing, and arithmetic are fundamental, but so is managing your money - not knowing how to do that in the modern world can derail your life.

Instead of sponsoring bills that restrict the freedoms of adults, why not invest a bit more in education and a bit less in other areas?

What do you think? Is the Credit CARD Act of 2009 a good thing or a bad thing on the whole?

As I mentioned before, I started saving for my children’s college education as early as I possibly could - in mid-2005 for my son and in mid-2007 for my daughter. In each case, I opened up a 529 plan with myself as a beneficiary as soon as we knew the child was coming, then I changed the beneficiary to the child as soon as the child arrived - this allowed me to start saving prenatally.

What’s a 529 plan? “A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. It is named after section 529 of the Internal Revenue Code.”

Since my investing goal was a pretty long term one - college is at least fifteen years away for them, even now - I chose an aggressive portfolio for the investing - 90% stock index funds and 10% bonds. I then set up an automatic investment plan - $100 a month for each of them.

Notice the start dates, though - mid-2005 and mid-2007. In each case, my investments for their college education caught the full force of the recent stock market downturn. I’d log on every month or two to check on the investments to find that the balance had gone down, even after the contributions.

If it were simply an investment for my own retirement, I could internalize it with no problem. I can stomach losses for my own future, because I’m secure in my own knowledge that over the long run, the tendency of a diverse stock investment is to go up.

But I would look at the terrible 529 investment return, look at the pictures of my kids on my desk, and I’d feel guilty.

“I’m putting aside money for their future like I should be, but it’s falling through my fingers like sand. Their future is slipping away,” I would think to myself as I looked at the pictures, and I’d be sorely tempted to change that investment around to put the money into something more conservative.

It is incredibly easy to let emotions get in the way of rational choices when you’re a parent. You see your children so full of happiness and love, yet still dependent on you for so much, and you want desperately to ensure that they’re safe and that a bright future awaits them.

But emotional investing is the most dangerous kind of investing. When you invest with your emotions, you try to time the market. You sell late into panics and buy late into rallies. You often undo many of your earlier good choices. And, in the end, you’re left with much less than you would have had otherwise.

Instead, if you’re investing for the long term, you’re far better off removing your emotions from the equation as much as you can. Set up an automatic investment plan, sit back, and wait. Make adjustments only because you’re moving closer to your target date, shifting to more conservative options as the big day arrives (or, even better, invest in a plan that does this automatically for you). Look at the balance if you’d like, but don’t let a few poor balances cause you to make radical changes.

In short, be patient.

I look at those two pictures on that desk and I see two young children who rely on me to make many decisions and choices for them. I invest for them, of course, but I also do things like prepare their meals, help them get dressed, and regulate how much candy they can eat and how many DVDs they should watch. As much as I love them and want to maximize their safety, sometimes the best choice isn’t the one that my heart yearns to make.

Over the last two weeks, at least three longtime readers of The Simple Dollar plus a close friend of our family had new babies enter their life. Congratulations are in order.

The addition of a baby to anyone’s life is a major change, to put it lightly. Your life changes in countless little ways because of this new responsibility - often in ways you do not expect. Your expenses change as well - you spend more on some things and less on others.

Here are eight little thoughts/pieces of advice for all of you new parents out there.

The biggest thing your child needs is your time.
If you’re spending every free moment obsessing over the perfect crib, the perfect bottles, and so on, stop. Just stop. The one thing your child needs more than anything else is your time.

Right now, your baby needs to be held. (S)he needs to hear your voice. (S)he needs to be fed regularly and have sanitary diaper changes. Read your child some simple books. Let the child take some naps in your arms. Look directly at the child when they’re awake and talk to them about anything.

Later, they’ll need your time in different ways. You’ll be a teacher, a playmate, a nurse, and a nanny. All of these roles are important. All of these roles take time.

How do you find that time? The biggest change will be in your social life. It’s now much harder (nearly impossible in some cases) to just go out on the town for a good time. For us, social occasions moved from being an ordinary routine to being a treat. This not only freed up a lot of hours, it also saved us a lot of money.

The introduction of a child is a perfect time for other changes.
Your life is going through dramatic change right now, with many, many aspects of your normal routine thrown out of whack. If you’re looking to adopt other changes in your life, right now is a perfect time to start.

For us, the birth of our first child was a call for change. Over the first year of our son’s life, we started a huge financial turnaround. We abandoned several expensive hobbies, got our finances in order, and I gave my dream of writing for a living a sustained, serious shot.

The constant through all of this change was our family - the three of us. Now that you have the same center in your life, take advantage of all of the other waves and make the changes you want to make.

It’s not as expensive as you think it’s going to be.
When many people think about the financial impact that a baby will have in their life, they think mostly in terms of addition. Day care. More food. Baby supplies. Clothes. Ouch.

When you actually have the child, though, you begin to find that there are a lot of subtractions as well. You spend less on your own food because you find it’s easier to make a meal at home than it is to bundle up the kid and go out. You spend less on gas because you don’t go out and about every day. You spend less on hobbies and entertainment because, quite frankly, you don’t have as much time for them.

Don’t panic. The new expenses won’t be as drastic as you think they’ll be. Let your child’s needs (material and otherwise) lead the way a bit and you’ll find that things will fall into place.

Reusable supplies trump disposable supplies.
Of course, this does assume you have a washing machine and a dryer at home. Given that, though, cloth diapers, cloth wipes, and cloth bibs will save you quite a bit of money over the infant and toddler years, plus you can “yard sale” some of them at the end.

The cloth diapering is often a surprise for people. Can that really save money? The Simple Dollar has broken it down before and found that cloth diapering is significantly cheaper for just one child and is a huge savings (well into four figures) for two children.

However, cloth wipes are easier to implement. Just get a pile of cheap, soft cloths and a spray bottle of water and you’ll find that not only do the cloth wipes do a great job, you can toss them right in the wash with pretty much anything else and they come out fine.

Take a look at reusable options. You’ll find that they steadily save you money.

Make time for just your spouse.
Once a child arrives, the dynamics of your marriage will change. Quite simply, you’ll have less time to spend together and less time to communicate with one another.

Make time. Set aside periods (like nap times) where the two of you simply do some things together without the baby.

I have personally witnessed multiple relationships falter and crash because the parents failed to make time for each other when the child arrives. Not only can that be emotionally messy, it can be very financially costly, too.

Eat healthier.
The first six months with a baby will result in a lot of sleep-interrupted nights for all adults involved. This will inevitably reduce your energy level during the day when you need to be performing well at work or at being a good parent or spouse.

One great way to counteract the loss of energy is to improve your energy levels via an improved diet. To put it simply, make better dietary choices. Eat home-prepared meals. Choose fruits as your snacks instead of sweets. Add more vegetables to your meals.

Making such moves will boost your natural energy level a bit, likely cause you to drop a few pounds, and make it easier for you to juggle both your familial needs and your professional needs.

Make an extra effort to find and build relationships with other new parents.
The best friend a new parent can have is another new parent, one who is going through the same experiences and can share many of the same resources.

Look around your social network for people who have recently had children and make an effort to get to know them. Invite them and their child over for a meal and see if you hit it off. If you do, that relationship will help you time and time again.

Another family with a young baby provides opportunities for low-cost socialization. It provides sympathetic ears. It provides supplies and ideas you may have never considered. It can also provide free babysitting if you’re willing to do exchanges with them. All of these can be a great benefit to you during your child’s earliest years.

Reach out to your parents as well.
A final tip: the birth of your own child is a great time to reach out to your own parents. Much as with reaching out to others with babies, your parents can be an invaluable resource for making this period go smoother.

More importantly, grandparents can play a vital role in the life of a young child. It is good for that child to experience a healthy relationship with their grandparents, and vice versa.

Do what you can to patch over any rough spots in your relationships with your parents and open up the doors as widely as you can to their involvement with your children. This is a win-win-win situation - don’t let it slip by.