Of course, the earlier you start saving the better. However, I believe that some periods of life are better suited for saving than are others. The Crucial Decade it is not based on your age, but the age of your children (if you don’t have children, you are probably better rested than I am and this blog post probably won’t mean much to you).

A 2007 report by the US Department of Agriculture claims that the amount of money it takes to raise a child from birth to age 17 doesn’t fluctuate much per year. They estimate that families earning between $45,800 and $77,100 annually will spend $11,000 to $12,000 per year until age 17 for a total of $204,060. I am sure this type of information plays an important role in determining child support and foster care payments. However, as a practical family budgeter, I don’t believe that a child’s 13th year is as costly as his or her 3rd.

As all parents know, babies are expensive. Medical bills, childcare costs, time off work and baby supplies all add up. This is especially true if one spouse decides to leave their job to care for the children. Older children are also costly. Cars, college, and weddings are some of the larger ticket items you can look forward to. And this is assuming they don’t move back in with you!

Fortunately, I have discovered that there is a period of time between where the childcare costs end and the college tuition begins (even the costs of sports playing, electronic loving tweens can’t compete with those big ticket items). This is your big chance! According to the National Association of Child Care Resource and Referral Agencies, parents of school-age children pay up to $8,600 a year for part-time care. When this ends or at least diminishes, start saving the amount you were paying in childcare into a savings account to prepare for retirement or the tuition that is looming on the horizon.

Don’t let this Crucial Decade pass you by or you’ll find yourself playing catch-up in your golden years.

Children between the ages of five and six are good candidates for an allowance. Because the experts I spoke with believe that the primary value of an allowance is to teach children how to manage money, many do not believe that you should withhold allowance as a consequence for undesirable behavior (in fact, I am not even going to site a source for this because there are just so many of them!) Some experts even go so far as to use bold, underlining, and ALL CAPS to drive the fact home that allowance should not be tied to behavior or the completion of chores.

The argument is that children can only learn how to live within their means if they can count on a set amount of money at a set time. They believe that parents should use chores as an expectation of being a member of the family and that you should consider withholding privileges such as television, using the phone, etc., as a consequence for not completing chores. I am not an expert in child development, but I would like to humbly offer a counter-point to this argument.

Speaking as a mother of kids who like money more than they like television or the phone, I am switching gears, ignoring expert advice, and tying allowance to daily behavior. Apparently, I am risking that my kids will grow up not knowing how to manage money, but I think there might be a few benefits as well.

-It reflects real life in that you need to meet certain standards to earn money.
-It teaches them how to live with varying amounts of disposable income.
-It is a good illustration of how money can add up over time.
-It helps with organization (see below).

Plus, I think the majority of what kids learn about money is not from spending a few dollars a week on toys, but from what they see parents do.

So what is this going to look like? I am repurposing a pill reminder.

I’m filling each compartment with 50 cents. At the end of each “good” day, the kids will get their money (don’t worry, most of our days are great!) So, have any predication on how you think this plan will work?

Parents across the country are having the talk with their young adult as he or she heads out the door to college. This year, however, the talk isn’t about sex, drugs and rock and roll. Instead, it’s about whether or not the student should apply for a credit card before the new regulations go into effect in February 2010. The recently passed CARD Act will require a person less than 21 years of age to either document their ability to repay the debt, or have a co-signer before being granted credit.

The new law will also regulate aggressive credit card marketing to college students. In years past, issuers enticed students to apply for cards by making offers of free t-shirts, beach balls, or even chances for an iPod. Some states have already passed laws restricting or regulating credit card marketing on college campuses, and with good reason.

A recent Sallie Mae study revealed that college seniors carried an average credit card debt of $4,100 compared with $2,900 five years ago. College freshmen tripled the amount of debt on their credit cards, going from $373 to $939 over the same date range. Keep in mind that this segment of the population typically has no income and no credit history, but has nonetheless been extended credit.

When it comes to building a positive credit record, the student has some options. Following are some things parents and young adults should consider when deciding what would be best for their situation:

Become an authorized user on the parent’s card. This is a practice known as piggybacking, and is exactly what it sounds like. The student is attached to the parent’s card and has charging privileges, but no legal responsibility for payment since the card is not in his or her name. The activity on the account is reported to the credit bureau in both the parent’s name and the student’s name, thus the young adult builds a credit file of their own. This option allows the parents to monitor the student’s spending, and remove them from the card if things get out of hand.

Get a secured credit card. This type of credit card requires a cash collateral deposit which then becomes your line of credit, thus limiting any abuse. Consumers need to be very careful when applying for this type of card, as some charge high fees which can greatly diminish your spending power. You can also expect a secured card to have an annual fee and a higher interest rate than an unsecured card. Make sure that the issuer reports to the credit bureau. If they do, and if you pay responsibly, a secured card can not only be a safe way to build a credit file, but after a year or so will likely qualify you for an unsecured card.

Obtain a card in the student’s name. Since the clock is ticking on the availability of this option, it definitely merits a conversation between the student and the parent. If the young adult has some financial training and experience with credit, and has demonstrated that he or she can handle it responsibly, then having a card in their own name could be a good way to launch their own credit file. Student credit cards typically have low credit lines, thus somewhat limiting the amount of financial damage that can be done. However, an irregular payment history on even a small debt can damage a credit file, which defeats the purpose of having a card.

In addition to lenders, employers and landlords also review credit reports. Therefore, it is important to graduate from college, not only with a sheepskin in hand, but a positive credit file.

This post was provided by The National Foundation for Credit Counseling (NFCC). Money Management International is a member of the NFCC.

For more about college and credit, check out:

Frugal tips to ease back-to-school shopping expenses
Survey Says: Save more for college
Economy calls for a change in college plans
Earn an “A” in personal finance this semester
New & old ways to pay for an education