FINANCIAL HOUSEKEEPING | Help your teenager keep track of spending
Kids are more involved in saving and spending than they tend to realize, but because they don’t feel like they have a lot of money, they often don’t recognize the consequences of spending it recklessly.
But just as many adults can benefit from keeping a spending log to see why they are living from paycheck to paycheck, so can children come to understand just how their habits are draining their bank account.
Brokerage firm Charles Schwab has developed an entire package of materials for raising money-smart children, but one of the best tools the firm has come up with is the spending tracker, an easy-to-follow guide that will help the kids see where the money goes. You can find the tracker – and other educational materials – at www.schwab.com/moneywisekids.
SHORT COURSE | Net worth
For an individual, net worth is the total value of everything he or she owns, minus the value of everything owed. The calculation is simple: Add up the value of a home, assets such as stocks, bonds and bank accounts, and then subtract all debts, including mortgages and revolving credit accounts. An individual investor looking to qualify for certain high-risk investments – such as buying into a hedge fund – may need to have a net worth exceeding a certain level in order for the brokerage or advisory firm to allow the transaction.
For a corporation, net worth is the amount by which assets exceed liability. It is also known as stockholders’ equity or net assets.
