1,820,000

That's how many hits I had when I typed in "Kid's allowance" in Google this morning.

Kid's investing returned 19,600,000.

That's a problem.

Why?  Because it points to a fundamental lack of understanding about how to effectively manage your finances.  In the words of Stephen Covey - "Put first things first".  In this case, how about we teach the kids to manage the checkbook before we have them set up with an etrade account (Unless you happen to be the parent of a baby from their commercials, and they can really talk and manage portfolios like that!)?

My guess is that it is simply a reflection of the adults out there who are doing the exact same thing - jumping the gun on aggressive investment positions despite having credit card debt, no cash reserves for emergencies, and a maybe even a bounced check or two. 

Even if you don't agree with the strategy outlined above, I'll make another argument for focusing on the basics.  Let's take the example of hiring a CPA to do your taxes.  Aside from the convenience, why would you do that?  To pay less taxes of course.  The money saved in tax should out weigh the money spent on the accountant.  If it doesn't, time to re-think your accountant, or your taxes may be simple enough to do it yourself. 

The same concept applies to managing money and cash flow.  The rate of return on avoiding bounced check fees at the bank and avoiding interest payments on your credit cards is fantastic, guaranteed and non-taxable.  Then, you can put that money to work in an investment portfolio.  First things first!

Have a good weekend.