Last Updated August 30th, 2018

5 Ways To Cope When You’re Tired Of Being Frugal

5 Ways To Cope When You're Tired Of Being Frugal

How often do you get frustrated when you’re trying to live a frugal lifestyle? Sometimes you just wish for a splurge, but you know you can’t afford one. Other times you’re just tired of always thinking about ways to spend less. What do you do when you’re tired of being frugal?

It’s not always easy. There are so many temptations to break your budget, whether it’s hearing from friends and family the fun things they’ve been doing or what they’ve been buying, or the commercials you can hardly avoid on television and online. There are also frugal living traps you may have fallen into that are sabotaging your efforts and making your life more difficult than it needs to be.

Fortunately, there are many simple ways to cope.

1. Allow small splurges.

What is it you miss most? Is there a way to get it more cheaply?

You may miss going out to see movies, for example. Movie ticket prices have gone up quite a bit, and don’t always fit well into a frugal budget. If you’re lucky enough to have a discount movie theater near you, however, you may be able to see movies somewhat later than others for quite a bit less. There’s a theater in our area, for example, that has $3 tickets, far more affordable than what we’d pay elsewhere.

You can also think about the little treats you enjoy and set a budget for it. If you miss chocolate, for example, you may be able to get chocolate chips and put them in the freezer. Nibbling just a couple rather than having an entire candy bar can save you money so long as you have the self control to not eat too many a day.

The challenge is being certain the splurges are worth it. My husband and I have often gone back and forth on whether a splurge is worth it on our current budget. It’s not always easy to decide.

For example, he wanted to get a year pass to Joshua Tree National Park a few months ago. I felt he should wait, as our youngest was going into fourth grade, and there’s the free National Parks pass for kids in that age group. Sure, he’d miss out on hiking there for the spring, but he’d get a year of access shortly for free.

We love hiking, or more to the point, climbing around on the rocks at Joshua Tree. Once we have a pass, the only cost is the gas to get there, and it’s not that far.

We decided on waiting. Now that school has started, we can get the free pass, and head out there whenever we want once the weather cools down enough. Do NOT go to Joshua Tree when the weather is really hot. It’s just not as much fun.

piggy bank

2. Put the things you want on a wish list.

While birthdays and gift giving holidays can be expensive if you exchange gifts with a lot of people, it’s also a good time to let people know what fun things you’d still like to do.

If you miss going out to eat, suggest gift cards to your favorite restaurant as a gift when you have a birthday or Christmas coming up. This may not feel as personal as some people would like, but if that’s what you want more than whatever else someone would buy you, it’s a good gift.

I’ve noticed that my teens now almost exclusively give gift cards to friends because that’s what the friends say they want. It’s also what they usually ask their friends for. It makes a lot of sense for kids without a lot of money, just as it makes sense for adults who have a tight budget.

Add the things you really want but don’t fit into your budget to a wish list. These won’t always be things that someone will buy for you, but you might be surprised at what people can manage when they know you really want something.

3. Look at free ways to get what you want.

It’s amazing what you can get for free sometimes. You don’t always have to spend money to get good things.

Libraries are wonderful if you miss getting new books to read, for example. Just how wonderful depends on the libraries in your area and the selection they have in the types of books you like to read. Many libraries are networked to others in your area, and you may be able to order books from other locations.

If you have a Kindle or other ebook reader, you should be able to check out ebooks from your library as well.

See if there’s an active Freecycle group in your area. You can ask for things you’d like to get. I’ve seen people in my local group ask for things like exercise bikes and get them.

There are also groups on Facebook for people to give away free stuff.

If you have kids, there are all kinds of free and cheap activities you can do with them throughout the year. Some are even fun without the kids.

4. Review your financial goals.

You’re being frugal for a reason. It can help you deal with the frustration of being frugal if you remind yourself why you’re going through all that. Try to renew your motivation when you’re tired of being frugal.

Are you saving so that you can pay down credit cards or other debts? Consider the benefits of getting rid of those. They may include:

  • No longer living paycheck to paycheck.
  • Having more money for fun things.
  • Being able to save money up for the big things you want, such as a car, home, or vacation.
  • Less stress when you don’t have to worry about money so much.

If you’re being frugal because it’s the only way you can pay all your living expenses, think about how your situation would change if you weren’t managing your money so carefully.

If you have solid goals you’re trying to reach, make a vision board to remind you of those goals. Find pictures of the things you want to have in your life, such as:

  • A new home.
  • New car.
  • Places you want to vacation.
  • Things you’d like to get for your family.
  • Saving up to help your kids go to college.
  • Saving for your retirement.

Use words and add motivational sayings to your vision board. Have fun with it.

Take some time to reconsider your goals if you’re often tired of being frugal. It’s possible that you’re trying too hard.

If you set goals that are too hard to reach, of course you’ll quickly tire of reaching for the impossible. Goals should be challenging, but they shouldn’t be impossible or close to it.

earn money

5. Find ways to earn more money.

If you want to make a big difference in your financial situation in the long run, being frugal isn’t the answer. Earning more money is.

There are many ways to go about this.

The most obvious is to get a raise at work. Some jobs give raises as a part of your annual review, while other jobs make it much more difficult to get a significant raise.

If possible, try to negotiate a better raise. This won’t work well in all situations but may be worth a try.

If a raise isn’t possible, a change of employers or careers may help you to earn more money. Even you don’t earn more right at the start, finding a position that has a greater potential for earning more money and advancing in your career can be a smart move.

Another alternative is to start a side gig. Lots of people do this now. There are all kinds of options. Sometimes you’ll even earn more from your side gig than at your regular job.

Many people will start a home business, such as a blog or making a product to sell online. This can be a lot of fun, although you won’t always earn money at it.

Others decide to drive for companies such as Lyftstart freelancing or get a work at home job. There are a lot of super flexible options out there that don’t require you to work a set schedule.

The thing to remember is that there are always ways to cope when you’re getting tired of being frugal. It doesn’t have to be a miserable process. If things aren’t working the way you hoped they would, take some time and find a way to make things better.

Disclosure: Some of the links in this post may be 'affiliate links.' This means if you click on the link and purchase the item, I will receive an affiliate commission.

Last Updated August 23rd, 2018

Can Your Family Live On A Single Income?

Can Your Family Live on a Single Income?

Many families dream of having one parent stay at home to raise the kids. The idyllic picture of having mom (or dad) home, taking care of the kids, cooking great meals, keeping a beautiful home, all on a single income, is hard to resist.

It’s also incredibly difficult financially.

If you really want to do it, it can be done. Single parent families have to get by on a single income, although there may be child support coming in as well. If you really want to have a parent home with the kids, you have to make it happen.

With practice, the sacrifices you make may not seem so bad. You will take fewer vacations, and they’ll be simpler. You will eat out less often. Shopping will be more carefully planned, and you will buy fewer things. If you and your family can live with that, you will probably be able to cope.

That’s assuming, of course, that you can make the remaining income stretch to cover your necessities. You need to look at this to make an informed decision.

Consider What Living On A Single Income Will Look Like

The first thing you need to do is figure out how practical it will be to live on a single income. That means looking at the income you expect to have and deciding if it will be enough.

1. Collect 3 months’ worth of pay stubs from the person whose income your family will be relying on. Use this to calculate your average monthly income.

2. Collect 3 months’ worth of bills. Make sure you include everything: rent/mortgage payments, water bills, electrical bills, cable, internet service, phone plans, insurance, and groceries, for example. You should also include some savings in your planning to prepare for emergencies. In any case, you need an average of what you are paying out every month.

3. Subtract your average monthly expenses from the average monthly single income. Will it work?

If not, don’t despair. There are often areas you can cut. When you have two incomes it is easy to spend more than you absolutely have to. You may need to look harder for solutions.

Don’t assume you can make on on a single income if you see that you can just barely make it. That’s asking for trouble. All it takes is one crisis to completely mess you up when you live paycheck to paycheck. It’s not ideal to live on a single income if you’re scraping by.

Consider The Expenses That Will Decrease

It’s not just your income that decreases when you go to a single income. A few of your expenses will also decrease.

Your taxes go down when you live on a single income. No more need for daycare. The parent staying at home will probably eat out less, have less need for dry cleaning and so forth.

They may drive less as well, depending on how close work was and how often the kids need to be driven anywhere. This can mean less money spent on gas and less maintenance on that car. If enough things are within walking distance, you may even be able to consider becoming a one car family.

It can also help to consider which bills you would be willing to cut in order to live on a single income. You can start with monthly bills.

Do you really need cable television? What about having both cell phones and landline phones? Perhaps your family could get by with just one or the other.

Now look at the other things you spend money on monthly, but don’t come in the form of bills. Can you eat out less? Do you tend to buy more clothing or new electronic gadgets you don’t need? What bad shopping habits do you have? Can you give up Starbucks?

dollar bills

Consider The Expenses That Will Increase

Some bills will go up when you have mom or dad stay home with the kids.

Electricity is an obvious one. There will be people home all day, turning on lights, needing air conditioning or heat, and so forth.

Having one parent at home may also mean that the kids get signed up for more activities, as there’s someone there to take them to everything.

You probably won’t have a lot of expenses increase when you go to a single income. You’re trying to cut expenses, after all.

Figure Out The Expected Single Income Budget

Try to work out a budget that will work with the money you would have as a single income family. Then, before you are actually a single income family, try living on it. Put the extra into savings. It makes a nice cushion for if things don’t work out and for when those extra bills that you really can’t plan for hit.

Even if you decide that you’re better off not becoming a single income family, living as though you are one can be a good financial habit. It gives you a lot more leeway when things go wrong. You’ll have savings built up and more money than you need coming in. That’s a good thing.

Track all your spending. You can create your own spreadsheet if you like or use one of the many apps or software out there that will help you track your spending. The more you know about where your money is going every month, the better. Here are some apps to consider:

How well is it working?

If your expected single income budget doesn’t work out, figure out what went wrong. Can it be fixed on that income or do you simply need a larger income?

Sometimes you can fix the problems. You can go as far as finding a cheaper place to live or as simple as figuring out what else can reasonably be cut.

Other times you may realize that living on a single income won’t work for your family. You don’t want to ruin your finances just to have one parent stay home with the kids. That’s not smart, and it won’t benefit your kids.

It takes time to learn to live on a single income. It is very possible for many families. You will need to plan, both in terms of finances and in terms of what is expected from each person, but it is highly doable. And having the ability to have one parent there for the kids can be amazing.

pie chart

Learn To Find Bargains

You might be surprised at the bargains you can find if you’re looking for them. I don’t just mean clipping coupons, although that doesn’t hurt. There’s a lot more you can do.

My favorite bargain source is a store called 99 Only. They’re in just a few states, but they’re a huge help when you’re on a tight budget. Fortune just listed them as a company that is helping to change the world, because they provide cheaper access to locally grown produce, often in areas that are considered food deserts. If you don’t need your produce to look quite perfect and you have a 99 Only near you, go there. I get almost all of my produce there.

Other dollar stores can have good deals as well, but most don’t have the produce selection I see at 99 Only. It’s the produce that keeps me coming back, even as I find other deals there.

Aldi is another good choice for finding grocery bargains.

If you can afford the membership and buying in bulk (challenging to impossible on some budgets), Costco is great too. The hot dogs and pizza also make for great cheap meals out when you need a treat for the kids.

I’ve shared a lot of other strategies to save money on groceries in other posts.

Saving money on children’s clothing helps a lot too. My favorite was handmedowns from family because for a long time we had clothes working their way through up to five kids. Not every piece lasted the whole time, but the chain we had going saved us a lot of money.

Be Ready For Sacrifices

Single income families usually sacrifice a lot of things to make it happen. You can still find a lot of ways to have fun as a family, but there are things you won’t be able to do.

If you like getting the latest and greatest technology, for example, you will probably have to stop that. Your current phone will need to last a lot longer.

So will your cars.

Most single income families don’t eat out a lot either. That can save a lot of money, depending on how often you eat out now. Just think how much you spend every time you take the family out to a meal. Unless you’re getting something super cheap, such as a $5 pizza, you’re probably spending quite a bit more than you would if you ate at home.

Holidays often get simplified as well. Most single income families keep holidays such as Christmas a lot simpler. That’s not a bad thing, really. Even with simplified Christmases, my kids often don’t use everything they’re given.

You may also want to cut down on your monthly bills. Many families have found that they can cut out cable television and use a few streaming subscriptions for far less.

I am also very fond of my cell phone service through Ting. I pay far less for my family’s cell phones than anyone else I know. We aren’t heavy users, but even when we use our phones more than normal, it has been a bargain.

Learn To Do It Yourself

Learning how to do basic home repairs yourself can help you save a lot of money. It’s amazing how easy some repairs are.

When we bought our house, for example, I painted the kids’ rooms myself. That includes putting stripes on my son’s wall because that was what he wanted.

I can also do basic plumbing. Clearing out basic clogs in a sink without dangerous chemicals is often not difficult. Messy, but not difficult.

You can also do your own yard work rather than pay a service. As the kids get older, they can help. I’ve discovered a fondness for irises and gladiolus in caring for my yard, as well as an enthusiasm for planting anything that attracts and feeds butterflies.

There will be a number of things that you should still hire a professional to handle for you, depending on your skills, experience and comfort level. If you’re willing to try a particular repair, however, there’s often a YouTube video showing you how.

Consider The Alternatives If Things Aren’t Working Out

Sometimes, no matter how carefully you plan, going to a single income as a family just doesn’t work out.

You get hit with an unexpected bill, such as repairs on the car or medical bills.

The spouse who is working loses their job.

Death, divorce, and disability are real possibilities too. You can’t assume that your life will run exactly as you planned it. Shit happens, to put not too fine a point on it.

This is exactly why I work at home. My husband and I wanted one of us at home, and I had the best skills to earn a living at home, first as a medical transcriptionist, then running this site. We didn’t want to take the risks of living on a single income when we had a viable alternative.

This has worked out well. There have been times when my income was the only reason we didn’t go completely broke. Sometimes I earn more than my husband, sometimes less. But my income is a vital part of our family’s income, yet I’m still able to be there for the kids when they need me.

Working parents can do that too, but it’s much harder to manage when they need you in the middle of the workday.

There are lots of ways to work at home. Some options are more flexible than others. Some will require that you put your kids in daycare while you work because you can’t have the distractions. Others will let you have the kids directly underfoot.

It’s up to you to pick what will work best.

I strongly recommend any stay at home mom or dad have some sort of income coming in. It makes a difference when you have a financial crisis. It makes a difference when the time comes to return to working outside the home, should you choose to do that. And it helps when you reach retirement age.

Of course, if your family is running into financial problems, don’t limit yourself to considering only work at home options. Sometimes returning to work outside the home will be the smart choice. Don’t refuse to consider that just because you’d rather be home with your kids. The well-being of your family comes first, and sometimes that means both parents have to work outside the home.

You can do that and still be amazing parents.

Disclosure: Some of the links in this post may be 'affiliate links.' This means if you click on the link and purchase the item, I will receive an affiliate commission.

Last Updated July 18th, 2018

Are You Falling Into Frugality Traps?

Are You Falling Into Frugality Traps?

I love being frugal. Saving money is a constant goal of mine. But there are a lot of challenges to this. Make sure you’re aware of these frugality traps as you try to live a more frugal lifestyle.

Most of these frugality traps relate to failing to think about the long term. It’s easy to say that this item costs less than that item. But does the difference really justify buying the cheaper item? Not always, and that is what you have to think about.

Trap 1: Cheap Or Better Quality?

There are times where being frugal means spending more rather than less. Think about how long you are going to be using the item. If you’re buying generic rather than name brand foods, in most cases that makes good sense, especially since sometimes the two are made by the same company. Just different labels.

But other times you are buying things that you want to last. Then paying a bit more now means you will not be paying more later.

A simple example would be the cheese slicer I bought a while ago. The wire on the old one had broken and we couldn’t find a replacement wire. So off to the store for a new slicer.

One model had replacement wires in the box with it, while another cost a dollar less but had no replacement wires or obvious way to replace the wire. The wires themselves felt about the same. So I bought the one with the extra wires so that we won’t have to buy another the next time the wire breaks. And in my experience, they do break.

pennies

Trap 2: Overbuying

This is the danger of the warehouse store and the really good sale. You buy more than your family can use because darn it, it’s just such a great deal! How could you possibly go wrong?

In a lot of cases stocking up isn’t all that bad. You just don’t want to stock up on things that will go bad on you or take up more storage space than you can spare for it. As you shop, pay attention to when the food will expire.

In the case of clothing, think about whether or not all the stuff you are buying will really be worn. It can be especially easy to overbuy for babies and toddlers, who just look so cute in everything. Just remember that overbuying is why resale shops have so many clothes available with the tags still on them or clothes that look like new.

I always balance how much I buy with how often I’ll have to drive a significant distance to get more. Regular groceries, I know I can get more easily, the store is less than a mile away. I don’t buy more than I need over a short time, usually about a week.

Great deals I may get some extras anyhow. When meat of one sort or another is on a good deal and I have space in the freezer, it makes sense to buy extra and freeze it. If there’s no room in the freezer, it doesn’t matter how good the deal is. I don’t buy extra because we can’t use it.

But if it’s something I can get a better deal by going to Target or Costco, I often buy more. They take 20-30 minutes to get to, and then the same back. That’s a lot of gas for the car and time for me. If I head out to those places, the goal will be to get enough that I can avoid another trip there as long as possible.

My storage for such things is planned accordingly.

I still pay attention to how much I buy on such trips. There’s only so much space in my pantry and other storage spaces.

Trap 3: “But It’s On Sale!”

Similar to overbuying, buying something just because it is on sale is a big mistake. Think instead about whether or not you really need it. All too often, you won’t really need it.

Buying things you don’t need at discount stores is the same trap as buying things just because they’re on sale. I go to my local 99 Only store regularly. The main thing I buy there most trips?

Produce.

Their produce department is almost as good as the one at the regular grocery store, but the prices are significantly better for many things. I can get a bag of bell peppers for $2, usually with a mix of green, red, orange and yellow bell peppers.

I belong to a Facebook group where people share their finds from this store. Many of the members shop daily, some more than once. Some even say their husbands or significant others have had to limit how much they spend there because they buy so much.

I get it. The deals are often amazing. But how much do you really need?

money peanuts

Trap 4: Giving In To The Wrong Things

There are a few ways to give in. One is to go shopping while hungry. It’s said that you will buy a lot more food if you grocery shop while hungry. Your hunger just makes it easier to give in to temptation.

But if you’re shopping with the kids, it’s easy to give in to their ideas. “But Moooooommy!” If you’re a mom, you know the rest of that routine. Just remember that you are the example for your kids and that if you buy everything that they want, they’ll never understand why you talk so much about spending your money wisely.

I don’t mean that you shouldn’t ever give in. There are better and worse times to do so.

For example, we love to take our kids shopping with us when we go to Costco, and we always try to go at lunchtime.

The pizza and hot dogs at Costco are extremely affordable, as are the sodas. The kids feel like they got a treat, but we’ve spent a fraction of what we would have at a fast food place.

And then there are the free samples to top things off.

When my kids start wanting to buy a lot of treats is when I start reminding them to bring their own money. Sometimes the treat isn’t worth it if they’d have to spend their own.

Don’t forget the occasional, reasonably priced treat for yourself as well. It’s much easier to maintain self control if you allow yourself reasonable treats. You won’t feel so deprived that you just have to splurge on the big one.

Trap 5: Repair Or Replace?

This is one that can be true torture. The washing machine breaks. Is it time to replace it?

The main reason this is difficult is because so many things are designed these days to be cheaper to replace than to repair. But I would always suggest looking at the repair costs, especially if they turn out to be minor. Not every breakdown means a huge repair. Just think of all the little stuff you have to take your car to the shop for.

Once you decide to repair, make sure that you get it done right. Having to get a repair done over again is guaranteed to increase the cost.

For your car, this means picking a really good mechanic. Ask around. You can generally find a friend or neighbor who knows a truly wonderful and affordable mechanic.

For other repairs, do your homework. Get quotes for really big repairs, and don’t ask for the shortcuts if it means the repair won’t hold up.

money umbrella

Trap 6: Focusing More On Saving Than On Earning

Saving money on the things you need or want makes sense. Know what makes even more sense?

Increasing your income.

In the long run, if you want to have more money saved up for the big things you want in life, a larger income may do more for you than being frugal. You still can’t overspend when you have a larger income, but it will give you more flexibility.

Earning a larger income also helps as the cost of things go up. Frugality won’t beat out inflation. Increasing your income might.

Let’s assume your family’s monthly expenses are $3,000. That may be low or high, depending on the size of your family and where you live. The average cost of living depends on a lot of factors. This includes mortgage or rent, groceries, insurance, car payment, phone, utilities and so forth. All the things you have to spend money on every month.

You spend some time bringing some of the individual costs down. You find a way to cut your monthly expenses by $400. It was tedious but feels really good. You now have a little more flexibility in your budget.

The problem is that once those expenses are cut, there’s nowhere to go.

If you want to have more money available to your family, you have to earn more money. You have a number of options to do this.

Improve Your Career

For parents who work, putting some effort into improving your career can pay off very well.

This doesn’t have to be at your current job, of course. If your current job is going nowhere, the improvement you need to make to your career is to get into a better one. It’s time to upgrade your skills.

But if you have good opportunities at your current job, find out how to make the most of them. Look into what it takes to get the best raises. Figure out which promotion opportunities interest you. Discover how to get from where you are in your career to where you want to be.

Sometimes you can stay in your industry, but change employers to improve your career. Current employers don’t always value employees as they should. If you should be earning more in your current job, or you aren’t getting the promotions you think you deserve, it’s probably time to move on.

Don’t quit your job to look for better opportunities, however. Most employers want to see that you’re currently working. It often improves your value in their eyes.

Have Both Parents Work

If your family has one parent working while the other stays at home, having the stay at home mom or dad start working can be a quick way to increase the family’s income.

This can be difficult when the kids are young enough that childcare is an issue. It’s not at all uncommon that childcare expenses will take up an excessive part of the family’s income, or even exceed the total of one parent’s paycheck.

Sometimes this means it’s not worthwhile to have both parents work outside the home. Other times it means you need to look at the long term.

If the income issue is short term, for example, it can be worthwhile to take the financial hit for a time, with the understanding that a future increase in income will take care of that problem.

Other times you may need to look at alternative arrangements. I know families where one parent works during the day and the other at night while the children are young. It’s hard on the marriage seeing each other so little, but it can be a worthwhile sacrifice to keep the family financially afloat.

You may also be able to find friends or family who are willing to help with childcare as needed at little to no cost. Don’t push someone if they aren’t willing – this works best when someone comes forward to offer and you discuss the arrangements in detail.

Or you could always…

Start A Side Gig Or Find A Way To Work At Home

Starting a side gig or finding a way to work at home is my favorite way to help out a family’s income. You may or may not need more childcare when you do this, but you can plan this out to deal with the fact that you have kids.

Some side gigs and work at home jobs really aren’t good if you must have the children with you. You don’t want to drive for Lyft if you don’t have enough time without the kids.

Customer service jobs and other jobs over the telephone can be problematic if you have children as well. Some of these jobs require absolutely no background noise, or you’re likely to get fired. You don’t want to lose your job just because the kids didn’t understand that they needed to let you work.

Fortunately, there are a number of side gigs and other ways to work at home that are flexible enough that you can do them even with the kids around. Fewer distractions are better for productivity, but not an absolute must for some of these positions:

  • blogging
  • transcription
  • social media management
  • website testing
  • software development
  • website design
  • babysitting
  • selling crafts on Etsy or similar
  • writing
  • mystery shopping

While having kids underfoot can make these jobs more difficult, they don’t make it impossible. That’s a huge help when you need to earn money from home and can’t pay a sitter.

Invest

The younger you start investing in things such as your retirement, the better off you will be in the long run. Even stay at home moms and dads should plan for retirement whenever possible.

It’s rarely easy to find ways to add to your investments when you’re on a tight budget. But do what you can.

If you have a job that offers a 401k, for example, make the most of it. This is especially important if your employer gives matching contributions to whatever level. If you can max that out, the money is out of your reach before it hits your bank account, and that’s often easier to deal with.

If you have the self control, consider contributing to a Roth IRA or Spousal IRA if you have a spouse who doesn’t work. This money will make a huge difference to you later in life.

I hope these tips help you to avoid the most common frugality traps. It’s sensible to be frugal, so long as you don’t take it to extremes. Be sure to balance it with progress toward a higher income so that you don’t run out of ways to save money when you need them most.

Disclosure: Some of the links in this post may be 'affiliate links.' This means if you click on the link and purchase the item, I will receive an affiliate commission.

Last Updated June 13th, 2018

Kids And Money: The Essential Guide To Financial Literacy For Kids

Kids And Money: The Essential Guide To Financial Literacy For Kids

How good are you at managing your money? Are you good at it or do you wish you could be better? No matter how you answer those questions, you probably want your kids to be at least as good if not better with their money than you are. This is why you should make financial literacy for kids a priority in your family.

Good money management is a life skill. Not all parents teach it well. But as a mom or dad, you’ve probably learned a few lessons about managing your money, even if you wish your own financial knowledge were better.

Children start learning about money at a young age. They see you pay for things. They learn about coins, with even a penny being an exciting find when they’re young. There’s so much more to teach them, of course.

Preschool

This is the age when kids are becoming aware of money. It’s time to take their first small steps in financial literacy. Help them become aware of the role money plays in the everyday life of your family.

father-daughter

Talk About Earning Money

Kids need to know that the family’s money comes from one or both parents working. It doesn’t just appear from nowhere.

You don’t need to tell small children what you earn – they have no concept of numbers that big and it would seem like unlimited money to them even if you struggle to pay all of your bills. But you can explain to young children that adults have to work to get the money they need for their home, food, and more.

Talk About How You Spend Money

Take your children grocery shopping so they can see how you decide to spend money. Explain why you make a decision in the store when it’s based on cost. This is something you can keep doing as they grow, giving more information as they get older and more able to understand why the difference matters.

Within reason, you can tell your kids when you decide to not spend money because you can’t afford it. You don’t want young children to worry about the family not having enough money, but they should understand that you have to make smart financial decisions. Sometimes that means eating at home rather than eating out, or skipping a treat they might have gotten otherwise.

Let Them Spend Money

If you’re getting your child a treat at the store, give them the cash to pay for it. If they have money someone else gave them as a gift, let them pay for whatever they choose to spend that money on.

Kids can have a hard time learning that they don’t just give the cashier the money and walk away. I had to remind my kids several times to get their change when they were little, even though they had been reminded to expect it. Their concept of money had little to do with the amount the cashier said or what they handed to the cashier. Accepting their own change back helped them begin to understand that there was more to it than “give the cashier your money.”

Don’t Give Them Everything They Want

Kids want so much. This toy, that treat, hey can we go there? When you can afford to do it, it’s tempting to let them have what they want. That doesn’t mean it’s a good idea.

Don’t give your kids everything they want, especially not right away. Teach them that some things must be earned, while other things need to wait for the right time.

If there’s a toy they really, really want, have them wait until they’ve saved enough money for it or have them put it on a wishlist for a birthday or holiday. Kids don’t need lots of new toys throughout the year. The lesson in patience will be far more valuable. An even better lesson is learned if they decide they really didn’t want the toy before they get it. You know how often kids change interests when they’re young, and there’s always the next desperately wanted toy coming up.

Help Your Kids Save Money

If your child doesn’t already have a piggy bank, get one. There are all kinds of fun options, from the traditional pig shaped ones to banks that count how much money is put into them.

I find simpler piggy banks better for young children. While it’s nice for a child to be able to look at their bank and know how much is in there, it’s a better lesson for them to have to count the money out to see what they have. This helps them learn the names and values of the different coins, and how to add them up.

Elementary School

In elementary school, kids should start learning more about money. They should hear about some basics at school, such as the names and values of the coins, but you may have started them on that already. Your kids should continue to increase their financial literacy in elementary school in several ways.

girl with flowers

Decide How Your Kids Will Earn Money At Home

To give an allowance or make it money that your kids earn is something parents can argue extensively about. There are good points to both sides.

Some parents prefer to give an allowance regardless of what chores have been done to demonstrate that your chores are something you do because you’re a part of the family. They believe that’s the most important lesson.

Other parents prefer to pay kids based on the chores they do because you aren’t just given money when you’re an adult – you have to earn it. They believe that’s the most important lesson.

And of course, there are paths between. Some parents may give a base allowance, with extra for chores beyond the basics.

I’m not concerned with how any one family gives their kids money. The big recommendation I have is that you don’t give them too much.

Make sure that they have to save up when they want something special. If they never have to think about whether they can afford something or not, they aren’t learning the most important lessons of all about money management.

Help Them Plan Their Saving And Spending

Kids in this age range should be saving up for the bigger things they want to have. You can help them figure out how to do that, especially when they also want something they can afford right now. Kids are great impulse shoppers, so it’s the perfect time to teach them to get that under control.

Talk to them about the best way to get each of the things they want. It will take time for kids to learn that even little purchases such as a candy bar at the store add up over time and make it harder to reach their big goals.

Teach Your Kids About Giving To Charity

Elementary school age can be a great time to teach your kids about giving to charity. This doesn’t have to mean money, however! You can also teach them to give their time to a favorite cause.

My kids and I, for example, volunteer at a local animal shelter. We help with the laundry and help socialize the cats so they’re friendly and ready for a new home. This costs us time rather than money, but we love the cause.

In many ways, it’s easier for kids to give money to a cause, if only because the volunteer opportunity for young children are limited. Most animal shelters have strict age minimums, often somewhere in the teens. It is possible that they can find a retirement home that welcomes young visitors or that your kids can help with a park cleanup – while supervised by you, of course!

Giving money to charity is a good idea as well, of course. Children should learn that these causes need money to do the good things they do, not just volunteers.

Middle School

While your middle school age child isn’t old enough to get a regular job yet, odds are that he or she is becoming more interested in having more money. You probably know by now whether your child saves money readily or spends it too quickly. It’s time to help them refine their financial literacy and responsibility.

mother and child

Talk About Their Money Goals

What do your kids want to spend their money on? The older they get, the bigger their wants get.

Most kids in middle school, for example, really want a good smartphone. Depending on your beliefs about when a child should get a phone, they may have one already, they may have a very basic phone or no phone at all. My kids each start out with an iPhone 4, which was dated even when my oldest got it, and limits on their use. We go through Ting, which makes phones for the kids very affordable. Each line is about $6 plus usage, and if you have limits on the account, that won’t be much at all.

If a top of the line smartphone is your child’s goal, you need to consider what you’re willing to permit. Even if your child pays for it, you will still need to put appropriate limitations on it, after all. If your child doesn’t have a phone yet, you may also need to discuss how monthly billing will be handled.

If your child wants something you don’t want them to spend their money on, talk about why. Give your child a chance to change your mind. It’s much easier for them to respect your “no” if they understand why and feel that their side has been heard.

Talk About Their College And Career Goals

Career goals go hand in hand with money goals in many ways. It’s never too early to start saving for college if that’s what it will take for your child’s preferred career.

It’s also a good time to start looking at scholarships. Some can be earned quite a few years before your child gets into college. College is expensive, so every bit that can be earned for it will help.

Encourage your child to put aside some of their money for whatever career training or college they will need. Setting up a 529 account can be a big help, especially as other people can add to it for birthday or holiday gifts if they like.

Open A Savings Account

If you haven’t opened a savings account for your child already, now is a good time to do so. Most savings accounts won’t earn anything worth mentioning in interest, but it’s a better way for them to save money, especially as the amount increases beyond a reasonable amount to have in cash.

You can even consider opening a Roth IRA for your child. This is a great way to talk about compound interest, and how the small account you start now will grow into something significant by the time they retire.

High School

High school is a great time to have your child practice spending the way they would as an adult. That time is getting close, after all.

girl in library

Give Them A Clothing Budget

Some teens are obsessed with having just the right wardrobe. Others really don’t care. Either way, the teen years are a good time to give them a clothing budget and have them handle their own clothes shopping.

This needs to take into account, of course, the fact that kids can have sudden and significant growth spurts. At the same time, you don’t want to give your teen an excessive amount of money for clothes. You want to teach them to plan their purchases based on their needs.

Giving a teen a clothing budget is a great way to teach him or her to shop for bargains. If they realize that they can get more if they wait for sales or shop at thrift stores, they’re likely to do so. It’s a great lesson for all those times in life when a budget is necessary. Cash is better than a limit on a credit card since you cannot possibly go over with cash.

Make a plan for how you handle mistakes. You don’t want to make it so easy for your teen that they don’t care about their budget, but you also don’t want them humiliated by having too few clothes.

Make Them Do The Grocery Shopping

Give your teen a budget, and make them do the grocery shopping at least some of the time. Have him or her plan out the meals and make a shopping list. Be sure they consult the current grocery ads for the best deals.

Expect mistakes, especially the first few times. You know that you forget things at the grocery store too. When my teens help shop, they help cook too, so they’re very aware of mistakes.

Make Your Teen Get A Job

The teenage years are ideal for that first job, especially once your child hits 16. Younger teens can sometimes find babysitting, pet sitting, or lawn care jobs.

You can help your teen prepare for interviews, but don’t go along or interfere. You hear stories of parents sometimes wanting to be there when their child interviews for a job. With most employers, that’s a great way to ensure that your teen does not get the job. Encourage their independence and send them to handle interviewing and holding down a job on their own. They may fail occasionally, but failure is a great teacher.

Teach Them About Household Budgeting

As your kids reach their teens, they begin to understand what things really cost. Especially as they reach their later teens, have your kids go over the household budget, so they see how fast things add up. Help them see how the costs they can expect when they move out are different from what you pay for the entire family.

Discuss College Or Career Training Financing And Costs

As your teen approaches their later high school years, you need to start figuring out what comes next. College costs have gone up dramatically, and many families will struggle with the costs. Financial aid can be a huge help, especially if your teen can get grants or scholarships, rather than just loans. Use resources such as https://fafsa.ed.gov/ and https://studentaid.ed.gov/sa/ to learn about what’s out there to help.

Don’t immediately dismiss career ideas that don’t require college. Some still pay very well, and if that’s what your teen wants to do, there is little point to paying for college.

Do discuss having more than one career option, especially for teens who have big dreams in hard to get into careers. I have one teen who wants to be an animator. It’s a lovely dream, but the reality is that it’s a hard industry to break into, and very hard to make a living from. She’s also considering civil engineering, so we’re discussing the merits of having a major and a minor versus a double major.

That dream career might take off, after all. There’s no point to giving it up entirely so long as other ways to make a living are considered.

College

Your kids won’t stop looking to you for help just because they go off to college. Be ready for them to have money problems that you need to help with. If you’ve been working with them for a while, they should have at least some level of financial literacy, but the reality of moving out and/or going to college can challenge what they thought they knew.

college

Have Your Young Adult Manage Their Money Online

Set your young adult up on a site such as Mint.com. Get them into the habit of tracking their income and expenses right away, so they always know where their money is going. It’s easy to lose track of spending when being on your own is so new.

Discuss Credit Card Risks

There are good reasons to have a credit card. It’s there for you in an emergency. It helps you build a credit history, which is a help when making big purchases such as a car or house later in life. Some jobs even check credit histories. You may need to cosign for your young adult’s first credit card.

A credit card can also result in disastrous mistakes.

It may be best to encourage your young adult to get a secured credit card first. It’s not fun having that money sit there as protection in case they have trouble paying on the card regularly, but it also keeps any financial problems from being too serious on the credit card side of things. It shouldn’t take too long to build up enough of a credit history to do away with the deposit if they’re good about making payments when they use the card.

Make sure your young adult knows when to use a credit card. Never use it if you can’t pay it back right away, short of an absolute emergency. Even an emergency use shouldn’t take long to pay off.

Think Before You Help Them Financially

Young adults often have money trouble. They don’t keep enough savings around for emergencies or possibly for their college textbooks.

It’s good to help your kids out when it’s reasonable, but don’t do it so much that they expect you to help every time they have a problem. They need to learn to face the consequences of poor financial decisions, and a lecture from mom or dad plus the cash to fix it is not always the right solution.

That said, my mother and my in-laws all still help us out sometimes if it’s needed. It’s not a bad thing so long as it isn’t overdone.

Disclosure: Some of the links in this post may be 'affiliate links.' This means if you click on the link and purchase the item, I will receive an affiliate commission.

Last Updated April 12th, 2018

What Are The Biggest Dangers To A Healthy Budget?

What Are The Biggest Dangers To A Healthy Budget?

A healthy budget makes life much easier in many ways. It’s nice to not have to struggle to pay monthly bills or to wonder how you’re going to get groceries this week. It pays to know what the biggest dangers to a healthy budget are.

A healthy budget doesn’t just happen for most people. It’s too easy to make mistakes. Consider these problems and how to deal with them.

Credit Cards

Credit cards can be a blessing when times are tight, but they can quickly destroy your budget as well. The money you spend on them has to be paid back somehow, and the sooner, the better. The interest charges add up quickly, making it even more difficult to pay them off.

Whenever you have to build up credit card debt, work hard at getting it paid off. You may have to sacrifice in other areas to make this happen. That’s not easy on a tight budget, but your budget will have problems until that credit card is paid off.

Change your spending habits if you are carrying a balance on your credit cards regularly. If you rely on your credit cards to get by, you need to either reassess what you are spending or start to earn more. Possibly even both. You can also look into getting a lower interest rate on your credit card debt so that it doesn’t pile up so quickly.

Credit cards are good for one thing, although a debit card may be able to perform the same function. They provide a great record of your spending habits. Go over your records every month and see where your money went versus where you meant it to go.

If you use credit cards wisely, they can be beneficial. Some give points or airline miles when you use them. If you can earn these while paying the cards off each month, you can end up ahead. Just make sure that you stay ahead of the bills.

A Lack Of Planning

A lack of a planning is another danger to your budget. It’s easy to overspend if you don’t know where your money is going. Start thinking about the little things and the big things, and seeing what you can do to improve your spending habits.

Perhaps even more important is the ability to know when you cannot afford something. That means cutting back on some of the fun stuff. But it also means not having to worry about how you will afford the things you really need.

Figure out how much money you need for your basic monthly expenses, such as housing, cars, utilities, and groceries. You will also need to consider expenses that may not happen every month but are still important, such as shopping for clothes or gifts. Use this information to make a budget that will help you keep your spending under better control.

Plan out your shopping carefully. If you know exactly what you’ll buy when you go to the grocery store, for example, you’ll probably spend less on extras. You also won’t have to go back because you forgot something. Shopping lists can be very helpful that way.

It can be difficult to plan your shopping at some stores. I have a dollar store in my area where I never know what I’m going to find, but its produce section makes regular visits worthwhile. Not everything is a dollar there, but the prices are still amazing. I rarely buy non-food items there, although I did buy my nephew’s Christmas present there for $20, with the same toy selling elsewhere for $75-150.

You should also make plans for those times when you will need cash. Don’t go to an ATM that will charge you a fee to get cash if you can help it. Many stores will allow you to get some cash back if you pay with a debit card, or you can make sure to go to a bank that won’t charge you for withdrawals at the ATM.

Don’t treat your cash as money to spend however you like just because it’s harder to track than spending on a credit or debit card. Treat all your money the same, no matter how you spend it.

Not Talking To Your Partner About Money

Communication is key in any relationship, and vital when it comes to having a healthy budget. Your budget will never stay on track if only one of you is following it.

Make sure you both know where the money in your budget is going. This is especially important if either person has spent extra on something.

Set aside time to talk together about your budget. Make it fun if that works for you. Just be sure that it’s enough of a priority that the discussion actually happens on a regular basis.

No Emergency Fund

Another major mistake people do is to make no allowance for emergencies. What will you do if the car needs a major repair or even just a new tire? Try to allow for saving at least a little bit of money every month. Your emergency fund can keep these little problems from turning into major financial crises.

If you don’t have an emergency fund already, you can start one by putting a little aside for one each month. The more you can put aside, the sooner you will have a solid emergency fund so that you don’t have to hit the credit cards when money gets tight.

How much should you have in your emergency fund? That’s up to you. Your first goal should be to have enough to handle a major car repair of at least $1000. Beyond that, try for an emergency fund that will help you keep going even in the event that a job is lost. Having enough money to handle the bills for a few months while a new job is found can greatly decrease the stress of such an event, plus it’s there for other emergencies.

No Room For Fun

Do your best to allow for some fun things in your budget. But if there just isn’t room, think up cheaper alternatives. If you want to see that newly released movie in the theaters, go to the matinee rather than in the evenings. Wait for it to come out on video.

But there are plenty of fun things you can do without getting into your budget. Watch for free admission days at museums. Go hiking. Go to the beach. Many fun things won’t hurt your budget much at all.

Think about the fun things you like to do when planning your budget. Can you make room for an occasional dinner out or going to the movies? What about time out with friends? If you can spare some space in your budget for fun but unnecessary things, you won’t have to feel bad when you do them.

old boots

Going Too Cheap

A mistake that can be a bit contrary is to go too cheap. If you buy excessively cheaply made items, in the long run they can cost you more than buying one more expensive but better made item. The right balance will save you both money and frustration.

I like the Sam Vimes “Boots” Theory of Economic Injustice from Discworld by Terry Pratchett:

At the time of Men at Arms, Samuel Vimes earned thirty-eight dollars a month as a Captain of the Watch, plus allowances. A really good pair of leather boots, the sort that would last years and years, cost fifty dollars. This was beyond his pocket and the most he could hope for was an affordable pair of boots costing ten dollars, which might with luck last a year or so before he would need to resort to makeshift cardboard insoles so as to prolong the moment of shelling out another ten dollars.

Therefore over a period of ten years, he might have paid out a hundred dollars on boots, twice as much as the man who could afford fifty dollars up front ten years before. And he would still have wet feet.

Via https://wiki.lspace.org/mediawiki/Sam_Vimes_Theory_of_Economic_Injustice

While you can’t always avoid going cheap, remember that quality can be more affordable in the long run. Whether you can afford to buy better quality up front is another question. But when you can afford to buy something that will last really well, do so.

Giving In To Temptations

Everyone gets tempted to spend extra money sometimes. There’s a reason why many people joke about how dangerous it is to go to Target, or that the minimum total purchase at Costco is $100. It’s also why you should never go grocery shopping when you’re hungry. It’s too easy to buy more than you need.

One way to help is to make a shopping list before you go and stick to it. I mentioned this back in the planning section, but it bears repeating.

Think about the things that will tempt you to spend extra money, and figure out ways to avoid them. This way, you’ll be ready when they happen. And they will.

Looking At Money Saved As Extra Money

It’s great when you get an amazing deal on something, isn’t it? You planned on spending $50, but it was $10 off. That’s $10 you can spend elsewhere, right?

Not necessarily.

For one thing, the money saved can be something of an illusion. How often does the item really cost full price?

Stores know you like deals, and so they set them up so that you want to spend more to get the best deal. It’s why you have to buy at least four items for some deals or get a higher dollar amount off your total purchase when you spend more. It’s a trap. You might even end up spending more than you had budgeted for.

When the savings are real, you’re better off putting that money aside rather than spending it as though it’s extra. Don’t use savings as an excuse to splurge, especially if that makes you spend more than you saved.

One of the best things you can do is to know when to buy and when to save. A healthy budget will keep you and your family in better financial condition. Take steps so that you’re ready for emergencies or unplanned but necessary expenses, and you’ll have a better shot at keeping your budget healthy.

Disclosure: Some of the links in this post may be 'affiliate links.' This means if you click on the link and purchase the item, I will receive an affiliate commission.

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