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Setting Limits on Children’s Spending
November 13, 2008
We live in an instant society. With the microwave oven, cash machines, and the Internet, whatever we want is at our fingertips in a matter of seconds. Children have learned to want everything right away. Setting limits on your children’s spending habits can curb the urge to be less than patient when it comes to money.
An allowance is one way to influence the spending habits of your children. Start as soon as they can understand about money; set up a weekly allowance for your children. It doesn’t have to be much. The point of it all is to teach them to respect money and understand what it can do for them.
Money can also be given for jobs done around the house above and beyond their regular chores. Children are very creative. If they need to earn more money to buy a special item, they will propose almost anything to find the money.
Once you set an amount for the job, don’t flounder. Some parents see how hard their kids are working and they either help them finish the job or pad their agreed upon price. Resist the urge to help them. They will learn the value of a dollar truly earned if you let them do it themselves.
Don’t offer to pay for half. It is okay to make up the difference if they forget to account for tax and are short a few dollars. Coming to the rescue and offering to pay half encourages children to spend over their limits. If Mom and Dad are going to pay half for everything, then the kids will see their money as instantly doubled.
When parents don’t have the money to purchase something, they have to wait until they have it. The sooner your children learn this fact the better. Managing their money at an early age gives them the skills to handle a pay check when they are old enough to get a job.
With money from birthdays, holidays, and allowances, your children will have a good deal of cash. Every time you leave the house they’ll want visit the toy store or the video store. In advance, decide that shopping trips will be limited to once or twice a month. Choose the days and stick to it unless some unforeseen emergency crops up.
In that time, your child will save more money. They already know the rules of shopping, but they will still try to get you to change the deal. Waiting until the appointed time teaches patience. It takes patience to save money and also discipline. They are learning both at the same time.
It is easy to give in to those cute little faces and buy the kids whatever they want. But, this won’t teach them to form good habits where money is concerned. When you set limits and schedules, stick to them.
Examine Your Spending Habits
October 25, 2008
Most people don’t fall into a pile of debt overnight. It takes time to rack up credit card bills and get behind in house payments. The key is managing your spending habits before things get out of control in the first place.
Take a look at your spending habits. Each of us is either a spender or a saver. There are distinct characteristics for both types of people.
Spenders love to buy things. They go with their first impressions. Impulse buying is their specialty. Not allowing time to think about a purchase before making it leaves them with stuff that they could have done without. Spenders live for today with little thought to the future. Why save when you can be happy now?
Savers are on the opposite end of the spectrum. They think about the future all the time. In fact, they give more thought to the future than they do to the present. They sacrifice to the point of piety. Enjoyment of life is not in their equation. The sad part is that they may not even enjoy themselves when they reach the point in life that they have been saving for. A penny saved is a penny earned.
Striking a balance between the two polar opposites is the best character trait to possess. While we should think about the future, we mustn’t obsess to the point that the present holds no meaning other than to service the future. Money is a means to live life to the fullest, but not the only one.
Start with last month’s purchases. Look at bank statements, credit card statements, and ATM receipts. The ATM machine is usually the fastest way to overspend. You put in your card and it spits money out at you. Most people don’t even ask for a receipt. At least if you had one, the amount could be recorded later when you returned home.
A budget is the best way to keep an eye on your money. Know what you have allotted to each category and stick to it. After the first few months you will be able to fine tune the line item amounts. Don’t cut yourself to the bone, thus making a budget hard to follow. On the other hand, don’t give yourself so much leeway that you go over budget every month.
Do you need that new sweater? Check the closet. There may be a clothing item or two that still fits and looks good. Visiting the mall just to “window shop” is too strong a temptation for the big spender. Instead of walking out empty-handed, they’ll pick up a few things that were on sale.
If ATM’s or debit cards are a problem, carry cash. Make one withdrawal a week for groceries, gas, and other incidentals. When the money is gone, that’s it. Writing checks for bills encourages you to track them in a ledger or electronically. Using cash may seem antiquated in today’s society, but it is still the best way to keep track of your spending. Receipts can be kept until the end of the month and then reconciled.
Taking the time to see where your money is actually going can help to curb those spending habits. Try to spend a little and save a lot each month. Hold out for those things that you want to see if you still want them a month or two from now when you have saved up the money.
Cutting Extras Can Add Up Your Savings
October 8, 2008
Today’s society is all about the latest gadget, gizmo or service. We have to have it, and it has to be the biggest or most that is offered. In reality there are so many modern conveniences that you can live without if you choose to live that way. Releasing the services or gadgets that you don’t really need could save you thousands of dollars each year. Here are some ways to do it. Read more
