Few Tips to save Money

If you're not saving 10% of your salary, you aren't saving enough.

The earlier you start saving, the less you'll need to set aside every year to meet your goals. That's because you allow your money more time to grow -- the gains on your invested savings will build on the prior year's gains. That's the power of compounding, and it's the best way to accumulate wealth.

Saving at least 10% of your annual salary for retirement is recommended, but the older you start saving, the more you'll need to save. If you start at 50, you may need to put away 30% a year and still postpone retirement by a few years.

Keep three months' worth of living expenses in a bank savings account or a high-yield money-market fund for emergencies. If you have kids or rely on one income, make it six months'.

An emergency fund is a hassle to build, but you'll be glad you did next time your transmission sputters or your boss hands you a pink slip. Besides curbing spending where you can and setting aside a small amount of your pay every two weeks, there are several ways to build your cash cushion. Some sources to draw on:

• A bonus or financial gift from a relative
• Money you get back from a flexible spending account, a transportation reimbursement account or an insurance claim.
• An extra paycheck. If you're paid every two weeks, you'll get 26 paychecks a year. So in some months you'll get three instead of two. If your fixed monthly expenses don't change, you might be able to set aside one paycheck a year.

Spend no more than 2 1/2 times your income on a home. For a down payment, it's best to come up with at least 20%.

Many buyers in recent years have stretched the limits of affordability, and have bypassed the traditional 20% down model. But make a smaller down payment, and most lenders will require you to have private mortgage insurance (PMI), which adds a minimum 0.5% of the loan amount to your mortgage payments, about $1,000 more a year on a $200,000 principal.

Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.

These guidelines include payment on all loans, such as school and auto loans and credit card debt.

Also remember to take into account other home-related expenses to judge a house's affordability. Property and school taxes, home insurance and energy costs and requirements can vary considerably around the nation.

Try to estimate future maintenance costs and work them into your budget. Some homes, especially older ones, may require more regular upkeep than homes built with more modern materials. Roofs, siding and heating, cooling, plumbing, and electric services may have to be replaced within a few years of purchase.

Invest no more than 10% of your portfolio in your company stock - or any single company's stock, for that matter. In a bear market, it's tough to find a safe-haven – a lot of the stocks in your portfolio will be sinking too. But don't compound the risk by holding too much in any one stock.

The most recent dramatic example of just how serious this "specific-stock" risk can be is Enron, which imploded after its executives allegedly engaged in various acts of malfeasance. But a company with perfectly honest management might fall on hard times too.

And if it's your employer's stock, you're in an even worse position – not only will your portfolio be decimated, but your job could be at risk too.


Aim to build a retirement nest egg that is 25 times the annual investment income you need.

So if you want $40,000 a year to supplement Social Security and a pension, you must save $1 million. This rule is based on the amount that you can safely withdraw from your nest egg in retirement.

The single most effective thing you can do to ensure that your money will last is to start out with a low withdrawal rate of 4 percent, then raise that amount annually to compensate for a cost-of-living increase or inflation.

The reason is that if a bear market hits early in retirement, an enormous loss can put such a big dent in the portfolio that it won't be able to recover in time to benefit when the market rebounds.

If you don't understand how an investment works, don't buy it.

There is no shortage of investment products out there. In addition to stocks and bonds, there are exotic hedge funds and insurance products.

Fortunately, you don't have to try and make sense out of them. In fact, you can construct a sensible portfolio with just two index mutual funds – one stock and one bond.

To reach your goals, you don't need to shoot for spectacular returns. Individual investors can outpace the market with moderately above-average returns in good times, as long as they don't lose too much money in bad times.

Aim to accumulate enough money to pay for a third of your kids' college costs. You can borrow the rest or use some of your income to help out when your child is in college.

Most parents have trouble saving enough for their retirement. But they still want to help their children pay for college.

In the struggle to feed your 401(k) and your child's 529, the 401(k) should win out. That's because there are no scholarships for retirement and your children have a lot of funding options, including financial aid, loans and a job. They also can go to an excellent, but less expensive school.

And when they're in college, if you have some extra cash after contributing to your retirement accounts, you can help them pay some of their expenses with it.

You need enough life insurance to replace at least five years of your salary – as much as 10 years if you have several young children or significant debts.

Life insurance lets surviving family members maintain something close to the standard of living they enjoyed prior to you or your spouse's death. Stay-at-home spouses also should have life insurance, since they do all sorts of things that you would need to pay someone else to do in their absence.

There are two types of policies:

• Cash-value: These cover you for your entire life and includes an investment component.
• Term: These cover you for a specific period of time and provide a death benefit only.

For most people the choice is a no-brainer - the premiums on a term policy are much lower.

When you buy insurance, choose the highest deductible you can afford. It's the easiest way to lower your premium.

It's the open secret of the insurance game: File a claim, your premiums go up. For that reason, it's in your interest – as much as possible – to shoulder small damages out of pocket.

For home insurance, raising your deductible from $500 to $1,000 could save you 25% on premiums, according to the Insurance Information Institute.

If you carry a balance, you may pay a variable interest rate as high as 19%. And if you've been late with payments or used up too much of your credit limit, you may be hit with a penalty rate, which can run north of 30%.

Credit card penalty fees, meanwhile, have been on the rise for years. The average late fee in 2005, for example, was $34, up 162% from $13 in 1995, according to the Government Accountability Office. Over-the-limit fees, meanwhile, were $31, up 138% from $13 during the same period.

So no matter how many airline miles or cash back rebates a no-fee rewards card offers you, it won't be enough to compensate you for your very expensive credit card habit.

The best way to improve your credit score is to pay bills on time and to borrow no more than 30% of your available credit.

It also helps to pay off debt rather than moving it around because the ratio of your credit card balance to your credit limit is key.

Say you owe a total of $2,000 on four credit cards, each of which has a $2,000 limit. Your total credit limit is $8,000, of which your total balance ($2,000) accounts for 25%.

If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to $4,000, and your $2,000 balance now accounts for 50% of that limit.

Also, don't open new accounts when applying for a loan if possible.

The best way to save money on a car is to buy a late-model used car and drive it until it's junk. A car loses 30% of its value in the first year.

Don't believe your father's old-fashioned warnings about buying used. Buying a "pre-owned car" means you've let someone else drive those expensive early miles.

Do your research, of course, and look for a reliable model. But today's cars can generally be expected to rack up six-digit odometer numbers before experiencing major mechanical breakdowns.

Check ConsumerReports.com for detailed reliability information. Sites like Edmunds.com and Kelley Blue Book's KBB.com can help you narrow down the price you should pay.

Lease a new car or truck only if you plan to replace it within two or three years.

Keeping a car at the end of lease-term can cost you thousands more than it would have to simply have bought the car from the get-go.

Leasing does have its place, but it's not right for most people. If you're absolutely certain you don't want the car long-term, leasing keeps your monthly payments low. That's because the payments are based on the actual value the car loses during the time you're driving it. Instead of making payments then getting some money back when you trade the car in, as you do when you finance a purchase, with a lease you just don't pay that money out to begin with.

Resist the urge to buy the latest computer or other gadget as soon as it comes out. Wait three months and the price will be lower.

As with cars, electronics cost the most for those who must be first with the latest cool thing. Let the gadget freaks get their fill, then go shopping when the market has calmed.

Also, those first-in-line buyers can have the fun of discovering the annoying bugs, disappointing features and poorly designed interfaces. You can check the user reviews on C-Net and Amazon.com later to find out for yourself without having spent the money.

Buy airline tickets early because the cheapest fares are snapped up first. Most seats go on sale 11 months in advance.

Airlines would love it if every passenger would reserve their seat as far in advance as possible. That way, they'd always know how many flights they actually need for each route. So they make it as attractive as possible for people to book early. To punish procrastinators, ticket prices get higher as take-off gets closer.

Up to a point, at least. In the end, the airline just wants to fill every seat. So, if there are a few seats left open at the last minute, you can sometimes find a bargain deal. If you really have to fly, though, don't count on that. Airline bean counters have gotten pretty good at knowing just how many seats they need.

You typically need 25,000 miles for a domestic round-trip ticket. If the ticket costs less than $250, you're probably better off paying cash.

Airlines push redeeming miles online and will charge $5 to $15 to speak to a person. But it may be worth it: the airline representative has access to additional inventory on partner airlines.

Your miles stretch further on international flights, which typically require 40,000 to 60,000 miles or more depending on the destination. You want to aim to get $2 worth of airfare for every 100 miles. In other words, for a $1,200 flight to Paris, you'd be getting your money's worth using 60,000 miles.

When you shop for electronics, don't pay for an extended warranty. One exception: It's a laptop and the warranty is from the manufacturer.

Most electronics, like PDAs and MP3 players, have few moving parts that are prone to wear. If there's anything defective, you'll probably find out about it within the first few months.

Laptops, on the other hand, have parts like hard drives and big screens that can actually fail over time. Plus, laptops can cost thousands of dollars to replace.

The 10 Biggest Business Plan Mistakes

Former venture capitalist and angel investor Christine Comaford-Lynch has reviewed hundreds of business plans. She explains where many entrepreneurs go wrong

By Christine Comaford-Lynch

It's a crime to work so hard on writing a business plan only to sabotage your chances of getting funded by omitting or shortchanging the key components. When a financier, board member, or key executive assesses your plan, they want to see the 10 topics listed below. The problem is, many businesses plans I've read make the same mistakes. Getting it right conveys that you know where your business is going, and you know how to get there. The following advice applies to a traditional business plan:

1. Company Overview

The Goal: A few concise and compelling sentences describing your company's purpose/goal.

The Mistake: More often than not, the company's purpose/objective is vague, common, not compelling. I stop reading here.

2. Pain

The Goal: Identify the specific market pain you will reduce or remove. At the same time, explain why your product or service is crucial.

The Mistake: Some entrepreneurs feel they don't need to include this topic, but you always have to make a case to convince readers unfamiliar with your product or service.

3. Solution

The Goal: Explain as completely as possible what your solution is to the market pain—and exactly how it works.

The Mistake: Not fully explaining your solution and exactly how it works.

4. Company Information

The Goal: While no one expects you to have a fully fleshed-out team in the early days, you should at least have a skeletal team supplemented with advisers.

The Mistake: One- and two-person teams simply don't demonstrate your ability to enroll others in your vision. As a general rule of thumb, list as many key players as possible in this section.

5. Financial Information

The Goal: Describe your funding history (if you have any), the total amount of money sought, the source, the anticipated use of funds, last year's revenue, a five-year revenue forecast, monthly burn rate, projected cash-flow positive date. Entrepreneurs always ask me why five years of fictitious revenue estimates matter. The answer is because financiers want to know how ambitious you are.

The Mistake: Pie-in-the-sky financials. Be sure to back up your projections with how you expect to achieve them.

6. Product

The Goal: A short paragraph explaining the status of your product. It's okay if you're in early trials or even if you have a killer demo.

The Mistake: Not helping the reader understand how you're going to get to a full-fledged product and when.

7. Defensibility

The Goal: Explain how your intellectual property or market position will be protected from competitors and how you'll mitigate risk for financiers. You also need to answer these questions: Do you have patents in process? What are the key risks with your company? How will you help to mitigate them?

The Mistake: Not demonstrating that you've considered these topics, and have thoughtful answers.

8. Competition

The Goal: Name your competitors, both now and in the future.

The Mistake: Saying you have no competitors—you do. Even inertia is a competitor, and a formidable one at that. A security company I recently met with listed all of their competitors to me, and one by one explained how their solution was better. I love honest acknowledgement coupled with doing your homework. It's rare and compelling.

9. Business Model

The Goal: Show how you'll make money and grow your business. By considering all the angles, you could end up discovering secondary and tertiary revenue streams that you've given cursory thought to. Don't hold back.

The Mistake: Not explaining exactly how your business will make money, when, and what the new revenue streams will be over time.

10. Key Milestones

The Goal: Show the deals/achievements that are accelerating/will accelerate your company's growth—be specific in stating the stage of these deals/achievements. This is where the rubber hits the road.

The Mistake: Not explaining specifically what you have accomplished within a time frame, and what you plan to achieve within a future time frame.

Quotes

The secret of success is constancy to purpose.
-Bejamin Disrael

Perception is another key to never giving up.
“Nothing is good or bad, but thinking makes it so”. - Shakespeare

Visualize what the result of your decision will be before making a decision
One of the ways we can affect where we end up is, when making a decision, try to see the outcome of the decision before going into action. Visualize what the result of your decision will be.

It’s an amazing tool. I think most of us would act so differently if we took the time to play out the decision in our mind, in reverse; if we see the result and play it backwards in our minds from result to decision. Do this while listening to your inner voice, and not lying to yourself.

Imagine if a married person with kids would play that moment before choosing infidelity in his mind at that critical decision-making moment. Imagine if you could see yourself not in your home, not with your kids, and financially destroyed. See the pain and result of a good time decision you’re about to make. Yes, if you would think backwards you would save yourself a lot of grief.

So here’s another exercise to try: Start think­ing several decisions backwards before you make them. Think result, back to decision. See yourself fatter as you decide to eat third helpings. See yourself in jail or in court if you decide to drive your car after drinking. Try it with the little things and Train Your Brain, and this process will take hold in the bigger decisions. Go make a copy and before you hit the start button see the paper, see the light, and see the whole process backwards.

Your have unlimited channels in your brain, muck like a TV set that is plugged into whatever we want to watch. Instead of watching the old channels with bad re-runs that makes you mad, pickup the remote and change the channels to whatever we want to see. Stop reacting to the negative things in life, and decide what you want to see. "My attitude is my decision."


Excuses reinforce the behavior of failure. They help the Law of Negative Accumulation take over different areas of your life. The Law of Negative Accumulation is very powerful. In some ways, the Law of Negative Accumulation is more powerful than the Law of Positive Accumulation.
Excuses are failures! That’s how you have to retrain yourself. Every time you’re thinking of an excuse, you’re thinking of a way to continue to fail.

Remember, as long as there’s a way to get to the other side of the wall, life is an opportunity. If there’s no way to get to the other side, then it’s a fact.

Invest your time

Excerpts from "Tools To Life"

Life is not forever, and the time you have can end at any moment. Wouldn’t life be more fun if you could be happy every day? You can have fun and smile every day. You can grow and get married, have kids, buy a house, get a job, earn money. All these things just add to you, and you are happy every day as it goes along. You see, when happiness is a goal, you never achieve it and end up chasing it like the donkey with a carrot on a stick leading the way. Happy is something you deserve every day. You can enjoy your dinner, a television show, a conversation with a friend, a book, and all that life has to offer you every day.

I once read a story about time. It went something like this. What if you had a bank account with a million dollars in it, but there’s a catch. This bank account starts every day with a million but whatever you don’t spend that day you lose forever. But this is a magic bank account, so each day you start your day with a new million dollars. Remember, whatever you don’t spend is gone forev­er. Well what if? Considering you lose whatever you don’t spend, wouldn’t you spend as much as you could every day? At the end it said that you already have this bank account, but instead of money, it’s called time.

It’s an amazing thing that every day you wake up. You didn’t die in your sleep; you have another day to go out there and live. You have another day to find fun, find joy, laugh, smile, eat, love and have fun. Every day you have another million dollars to spend. It’s your time, and you never get back what you let pass. You have your time, and you have to use it for yourself and spend all you can. Live every day to be happy!

Time is also like money; when you invest it well, it pays you dividends in the future.

The first step in achieving your goals is to know where you want to go. What if you lived in New York and decided you want to move to Los Angeles? Moving to Los Angeles becomes your long-term goal. There were many short-term goals that I had to achieve in order to make that long-term goal happen. In the end, it’s the sum of the success of short-term goals that makes the long-term goal happen.

When you learn about goals and how to make them happen, what you find is that you never work for the long-term goal. You work at the short- term goals, and they add up to and make the long-term goal happen. The Law of Accumulation results in the goals you want. While you work for your goals, both long-term and short-term, you should always enjoy the everyday.

If moving to Los Angeles is our long-term goal, what are the short-term goals? Packing, shipping your furniture, etc., and then the immediate goal is to get to Los Angeles. In this example, you decide to drive to Los Angeles. This is an easy way to explain short- and long-term goals. The destination of your drive now is the long-term goal.

The preparation for your trip and the ability to drive are your tools. The route that you plan to drive defines your short-, medium- and long-term goals. Your car gets three hundred miles to the tank, so your short-term goal is to reach each gas station along the way. Your medium-term goals are finding a place to stay at the end of each day of driving. Remember, your long-term goal is driving to Los Angeles, but you’ll never make it there on one tank of gas. It’s the success of the short term-goals added up together that allows you to reach Los Angeles. You never accomplish your long-term goal; it’s always the result of the short-term goals accumulated.

What’s also important in understanding this is that human psychology needs a sense of accom­plishment. When you don’t understand the success of the short-tern goals, the long-term goals may seem too far out of reach, and then you can be disillusioned and give up. Then you’ll never accomplish your goals. You need to feel as if you’re making progress, and then you can have mini-cele­brations and mini-rewards.

It’s a series of little successes that give you the momentum to accomplish the big successes. As you reach each gas station, you feel as if you’ve succeeded, and maybe you reward yourself with something to drink or eat. Then, as you get to the medium-term goal—a place to sleep—you feel good about it, watch a little television, and then you’re ready to get going the next day. As you reach each gas station, you visualize and feel that the next one is not that far. You feel as if you can make the next one, and when you do, you feel good again. You can’t visualize your long-term goal; it’s too far and feels too far for most of the trip. The way to make long-term goals happen is to understand what the short- and medium-term goals are. You can also be happy along the way as you accom­plish the short-term goals. Understanding and using short-term goals to propel you to accomplish your long-term goals is one of the true secrets to success. Learning this will give you the ability to re-create your life and make it whatever you want it to be!

If we don’t teach our children how to set short-term goals, accomplish them, feel good about them, and feel successful all through life, they’ll get disillu­sioned, frustrated and angry. They feel lost and think that the trip to California is impossible. Once you feel you can never make it, the results are negative, and we see that in many areas of our society today. I agree with teaching math, reading and writing. It’s the same thing as teaching driving. It’s a skill. The skill of driving does not get you where you need to be; learning how to set a destination, select a route and find your gas stations in life will allow you to use the skill as a tool to get you where you want. One without the other serves no purpose. We need to teach everyone that suc­cess is no secret, that goals can come true and that life is worth living every day. It’s not worth it only when you “make it,” whatever “making it” is. It’s worth it every day, and you need to take advantage of your million-dollar bank account every day.

Becoming a doctor or a lawyer or a teacher may seem like you have to be in school forever, and it may seem impossible. In order to make that long-term goal, you first have to make the short-term goal of high school. Reduce it to one semester at a time. Reduce it further to one week at a time, one class at a time. Getting to the class on time is a goal. Study, do homework and after you accomplish all the little goals, one day you are Dr. So-and-So.

Many travel to Hollywood with the dream of becoming a star. Again, this is not a goal but a result of a goal. Actors need to break it down to first learning everything they can about the skill of acting, then learning the skill of auditions, then having medium-term goals like being in a small the­ater production, getting commercial work and playing a small role. As they accomplish these things, they need to feel good along the way. If they think the only time they’ve made it is when they’re a star, then as time goes by they’ll feel embarrassed about the smallness of their successes and quit. Most will not have concentrated on the skills themselves and then wonder why they’re not chosen. They will blame it on bad luck or on being the victim of a sys­tem. However, without the skill, they are their own victims.

Set your goals, learn your skills, get on the road and find your gas stations.

How to raise your spirited kid

Excerpts from baby center

Living with a toddler can be like sharing a house with Dr. Jekyll and Mr. Hyde. If your child is "spirited," the toddler years can be especially trying.

What defines a spirited child? "All toddlers are busy: They're climbing and jumping and throwing things," says Mary Sheedy Kurcinka, author of the popular books Raising Your Spirited Child and Kids, Parents, and Power Struggles: Winning for a Lifetime. "But the high-energy kid is the one who can get to the top of the refrigerator. All toddlers say 'no,' too, but a spirited child's 'no's!' are louder and more frequent, his tantrums longer lasting and more intense. You gradually realize that as a parent you're working harder than your neighbor, whose child is simply not as intense, persistent, and emphatic as yours. Your child is still normal, he's just more of everything."


Spirited kids are definitely a challenge, but there are ways to defuse daily battles and teach your toddler to learn to control himself. Here are Kurcinka's top strategies:

Manage anger
Age: 12 to 24 months
How it works: Toddlers are tantrum-prone because they're not yet able to control their emotions, experts say. "Tantrums aren't really a discipline issue, they're about anger management," says Madelyn Swift. "Tantrums happen when kids don't get their way and they're mad."

Step one in this situation is to let your child calm down in whatever way works best for her. If she'll let you hold her, hug and rock her until she's quiet. If touching her only sets her off again, give her space to calm down by herself.

Don't try to talk to her about what happened until she's over the emotional storm, Swift says. But once it's over, don't let relief prevent you from addressing what happened. Instead, replay the tape and return to the scene of the crime. It's time to fix whatever mistakes were made.

Real-life application: Your toddler didn't want to get dressed and threw a fit, hurling toy cars around the room. Once she's stable, take her back to the toy cars and calmly but firmly tell her it's time to pick them up. If the task seems too daunting, split it up. Point to one pile of cars and say, "You pick up these cars and I'll pick up the ones over there." Stay there until your toddler has finished her portion of the job.

If she refuses and has another tantrum, the cycle repeats itself. But wait longer for her to settle down this time, and make sure she knows you mean business. Then back to the cars you go.

Let him know what's coming.
All toddlers become anxious when they can't predict what's coming next, but most spirited children need events spelled out to a degree that you might not expect. When it's time to leave the playground and your 2-year-old throws himself on the ground howling, it's probably because he's insecure about what's coming next. Tell him in detail: You'll go to the car, we'll drive straight home, find Sis and Dad there, and have spaghetti for dinner.

Remember that with toddlers, words aren't always enough. You might tell him "Daddy will pick you up from daycare this afternoon," for example, but he may well have trouble remembering it all day. In this case, you might ask his daycare provider to remind him later in the day that Daddy's handling pick-up duties.

Sometimes visual cues can help. If Grandma and Grandpa are coming for an annual visit, show him photos ahead of time. You might even make a picture book outlining his bedtime ritual: bath, pajamas, story, bed. You can't cut all the surprises out of your toddler's life, of course, but you can minimize the stress by giving him a heads-up when you can.

Be clear and consistent.
Spirited children need the security and consistency of clear rules, so it's important to set limits. If nap time is always after lunch and your spirited 3-year-old puts up a fuss, be firm and confident as you enforce his rest period. If videos aren't allowed after dinner but you let him watch "just this one" tonight so you can make a phone call, he'll test you and demand one forcefully every night for the rest of the week.

Maintain physical contact.
"As toddlers move toward independence, they still very much need connection," says Kurcinka. Maybe your toddler would like a backrub before bed. Or he might enjoy cuddling with you in a rocking chair in the morning. Have him bring toys into your room so he can play near you while you dress for work. At daycare, sit with him on the floor until he moves into the group on his own.

These tactics may seem to slow you down initially, but they'll actually save you time in avoided tantrums and battles. "Toddlers need to know they can trust you to be there for them. That way they'll ultimately be more independent," says Kurcinka.

Create a "yes" environment.
"Me do!" are a toddler's favorite words, says Kurcinka. Let your child pour his own juice out of a little pitcher, use a fork at dinner, and put on his own shoes. Even if everything is a little messier and takes a little longer, his increased independence and cooperation are worth it.

Also, look at how your house is organized. Is there a low cupboard in the kitchen filled with pots and plastic containers that he can play with? Are his toys and books easy to reach? Is there a bed, couch, or floor pillow that he's allowed to jump on? The more child-friendly your home is, the less you'll be fighting with him to keep away from special things and places.

Avoid danger spots.
If your highly energetic child can't sit still at the table, choose restaurants wisely or plan a family picnic in the park instead. If he's slow to adapt to new people, don't plop him on Santa's lap. Stay with him and approach Santa gradually or wait until next year. And if you find yourself in an overly stimulating situation, such as a playmate's big birthday party, don't be shy about leaving early before your toddler loses it.

Soothe his senses.
Help your spirited child wind down when the intensity level starts to rise. Water can be especially soothing: Give him a warm bath on a cold night, put a cool washcloth on his forehead on a summer afternoon, or let him play with his rubber ducks in the kitchen sink while you're cooking.

For older toddlers, finger paints and modeling clay are also calming sensory activities. For younger toddlers (under 2), it feels good to spread sand, cornmeal, or shaving cream on a play surface.

Acknowledge feelings.
Talk to your spirited toddler about why he's starting to melt down and let him know he's not the only one who is overcome by difficult emotions sometimes. Try saying "The people and the noise are bothering you. They're bothering me too. We'll leave the mall as soon as we've paid for these shoes."

Even if he doesn't seem to learn much from what you say at this age, explain it to him anyway. (Just don't become angry with him when your perfectly logical explanations don't result in his quick compliance.) Toddlers usually aren't able to change their behavior in response to verbal reasoning, but this exercise will help you empathize with your child. And eventually he'll learn to recognize what winds him up before he goes over the edge.

Reward good behavior.
Don't worry that your spirited toddler will get a big head if you praise him. Reinforce his efforts with positive messages: "Good job getting out of the tub when I asked you to" or "You really used your quiet voice at Peter's house today." Try to never pass up a chance to praise the behavior you're trying to teach.

Set realistic expectations.
The many daily transitions adults take for granted getting out of the house, in and out of the car, to daycare, to the store, home again, going to bed are especially hard on a spirited toddler, who needs extra time to cope with change and who may become overwhelmed by people and noise.

"The average 2-year-old has spent 500 hours in a car," says Kurcinka. "Ask yourself, 'Can I expect my toddler to handle this?'"