I know that if anyone in my family is reading this they are probably rolling their eyes. I tell this story a lot. But I think it’s useful to think about, when considering how to teach your kids good money habits.
My sister and I are five years apart, with me being the oldest. If I wanted something, I had to save for it, and was always saving my allowance and birthday present money for something I wanted. Well, being a child of the 80s, I desperately wanted a Pound Puppy. So, I saved and I saved, and finally I had enough money to buy my very own Pound Puppy.
One of my parents (I won’t sell out which one 
)took me, along with my sister, shopping. I was an annoying older child, and I took my time contemplating which one I wanted – the spotted one, the brown one? I finally picked one out and my sister asked for one too. She had a temper tantrum in the store, and my parent gave in, and bought her one too.
This isn’t the best way to teach kids financial responsibility, but the truth is, most parents in the same situation would do the exact same thing. I know I would. So, how do you avoid this?
I think if you are trying to teach your kids to save, and have a younger one, the key is making sure they have the same amount of money. At a young age, kids just need to learn the concept of saving money, not necessarily how much stuff costs. So, I’d probably suggest giving both kids a similar allowance, and if your younger one (or older one) spends their money foolishly, you’ve got to stand your ground. It’s difficult, and none of us want to deal with a temper tantrum at a store, but remember that kids remember each and every lesson you teach them, even the unintended lessons.
I’m a big fan of Clark Howard, and his column this week was really thought provoking for me. He talks about how research now shows that touching an item in the store makes you feel a sense of ownership toward it, and makes you more likely to overpay for it.
It got me to thinking about visualization, and how it can be used for both positive and negative budgeting purposes. For example, let’s say you want a new computer. If you go to the Apple Store and play around with the one you want, according to Clark’s article you are more likely to overpay for it. However, visualizing your end goal is one of the best ways to achieve it. So, how do you use visualization to your benefit?
In general, I feel that it really depends on your shopping habits. If you are a “shopaholic”, then you really should visualize the item only when you are tempted to spend your savings on a totally different item. In our computer example, if you are saving for a computer but then are tempted by a purse, visualize the computer and hopefully it will curb your temptation. If I’m saving for something, I like to put a little card in my wallet in front of my credit card reminding me of my goals.
If you are a saver, and not a shopaholic, then definitely visualize your goal. Visualizing can help you really get into a saving mindset, because it makes your goal tangible.
Happy saving!
Even though the budget category of groceries and household items is often one of the largest categories, it’s also one of the most variable. If you are looking to save money in your budget, this is a good place to start. Yet, many people don’t want to go totally frugal, however, there are lots of opportunities for savings. Here are some hints – I expand on these in future posts:
- Know your prices! I can’t emphasize this enough. It’s impossible to know if you are getting a good deal if you don’t know what the best price is. (read this post for how I made this mistake during the recent Circuit City liquidation sale). If there are some items you typically buy, like diapers, you should also keep track of when they go on sale, and what the best sales are.
- Use coupons. Coupons can often save you big money. While my family typically shops the grocery store perimeter, which contains items that rarely have coupons, we still manage to clip quite a few coupons – for diapers, cleaning products, toiletries, restaurants, and other household items. All You magazine offers loads of coupons (over $40 of very usable coupons in this last issue). You can buy a 2-year subscription to All You through a deal we have with Southern Living at HOME.
- Stockpile. If you have room at home, buy in bulk, or buy in advance, and save until you need it. I recently bought a ton of food at great prices from the Omaha Steaks store, but that required most of the extra room in my fridge.
- Buy the minimum quality that you need, but make sure you don’t buy something that will just end up in the trash. This works for electronics, clothing, and other household items.
- Save receipts in a good, safe location. If something breaks or needs to be replaced, you’ll want to be able to easily return it.
Any other good, smart shopping tips? Post them in the comments!
When I was in college, I often got quite a few confused looks about my double major – economics and psychology. While that combination isn’t too common, I always felt they were related. I think it’s important to understand your underlying motivation for whatever financial goals and habits you have, before you make any changes.
First, if you haven’t already, I suggest that you and your spouse complete the printables – it’s a great way to start thinking about your motivations, and discuss them. One of the most important questions on the printables is #8 – what is the value of money to you? – because the value of money really can help you understand what you are saving for.
There’s no wrong answer to the value of money – if it’s status, that’s absolutely fine. If you are trying to make more money because you want to buy things – there’s nothing wrong with that. As long as your motivation, your goals, and your habits are all in alignment, and your spouse agrees with you. The key is that alignment.
Regardless of how much research and planning you do, your budgeting and savings plans cannot succeed unless both you and your spouse are on the same page. If you don’t share the same goals, then it’s almost impossible to meet them. While you may feel that you do share the same goals, make sure you fully read this post, and have these important conversations before putting together your goals and your financial plan.
Having these serious and important conversations requires preparation and dedicated time. I’d recommend that you each work on your answers individually, and then come together to really discuss your answers. This time should be uninterrupted – no TV, radio, or other distractions, and should be at a time when the kids are napping or sleeping.
The conversation should involve a discussion of each of your individual answers, and when you are finished, you should have an agreed upon set of goals for your family. It may seem like a lot of work, or an unnecessary step, but I promise, when the goals are in place, everything will be easier.
To start, visit my printables page and print out activity one and activity two. You should each complete your own activity one sheet, separately. Then come together to discuss your individual answers and develop activity two together.
In the coming months, I will visit each of these goals and plans and help you develop the best plan for your situation. Feel free to comment with any questions and I will definitely answer them.
It’s difficult, in this economy, to talk about savings. However, saving money is still essential, for all families. Here are some of the common areas of savings, in my order of importance.
- Emergency Fund: if you don’t have an emergency fund, stop right away, and put a plan together (this post can help). An emergency fund can be used for medical bills, home repairs, automobile bills, and many other things. It’s absolutely essential for any family to have, and in general, should be held in a low-risk, short-term account, such as a money market account.
- Short-term savings: for things like automobiles, family vacations, televisions, etc, you may want to put aside some money regularly. Again, if you plan to access this money in the short-term, you’ll need to invest it somewhere safer than the stock market.
- Retirement savings: it’s been said that no one will finance your retirement, and this is absolutely true. You can get loans for just about everything else, but not retirement. So, make sure you are in a good position to retire in comfort.
- College savings: thinking about college savings can definitely be depressing. My biggest suggestion here is to make sure you and your spouse are on the same page regarding the type of college and the amount of money you are hoping to fund. Then, figure out how much you will need and start saving, even just a little bit!
In upcoming posts, I’ll further investigate how specifically to save.
As the weather gets warmer, chances are, you or another family member are going to be in need of new clothing. Since I lost a little weight (go #shredheads!), I’m definitely in need of some clothes, but don’t necessarily have the budget to accommodate everything I want, so I definitely have to develop a plan for shopping that fits my budget.
First of all, I recommend a full audit of your current wardrobe, including seasonal items that are in storage. This isn’t always the most fun of tasks, but it’s definitely worthwhile. Pull out everything that is still in good condition and fits well, and start putting together outfits. As you put outfits together, you can start to see what types of items will be needed. Start adding them to a “to-buy” list.  For instance, if you have many brown toned shirts but no good brown pants, add pants to the list.
Once you have a list of things you’ll need, figure out what is worth splurging on, and what you spend less money on. I find that it’s best to splurge on pants, which often wear out quicker and are generally classic, whereas colorful shirts and tees are better to purchase at a cheaper price.
For trendy items, I like to shop at H&M, Target, NY & Co, and Old Navy. For splurges, I love Ann Taylor (regular and Loft) and Nordstrom. Staples, such as tanks and tees, as well as undergarments, can be found cheaply at stores like Target and Walmart. I prefer to keep a list of items I need with me at all times, that way when I’m shopping I always know exactly what I need!
What are your tips for saving money on clothing you want and need?
Let’s face it, we are a spending society. With such a large population of our country holding a significant amount of revolving credit (i.e., credit cards), it’s no surprise that getting out of the spending mindset can be challenging. However, with an unstable economy, it’s absolutely essential that families maintain an emergency fund. While putting together a significant emergency fund often seems daunting, the first step is curbing your spending, so that you’ll have more to save.
Here are some tips to keep in mind when considering a technology purchase:
- You don’t always need the newest or the best – this goes for cars and technology. If you have a 1st generation iPhone, you don’t need to upgrade immediately to the 3G. If you have a regular cell phone that only, gasp, makes calls, you don’t necessarily need a new phone unless you think you’ll need those features. Differentiating from needs and wants is very important in saving money.
- Buy the right thing the first time — this may involve spending more money upfront, but less in the long run. Do your research before buying something, and make sure you are getting everything you need. Some people try really hard to save money and buy an inferior product, only to find they need the more expensive one.
- If you do need something new, try selling what you have. When I decided to trade in my Blackberry Pearl for an iPhone (a great decision, by the way), I sold my Blackberry Pearl on eBay and made my money back.
Any more tips for saving money on technology purchases? Comment below!
I was reading about the no-spend challenge going on over at Mom Advice around the same time I lost my freelance editing job due to the economy. So, I thought it would be a good idea to participate!
We’re modifying Amy’s challenge a bit to fit our family’s needs. Here’s our rules:
- We can only buy things we need (e.g., food, diapers, fuel) and not things we want
- Delaying purchases is not allowed — we won’t just be spending a bunch of money on March 1st
- Any spending of wants has to be approved by both of us
- Haircuts are okay, even if they are technically “wants”
- We will still get takeout on occasion
I’ll update this blog with our progress.
