Check Out My Article on FamilyShare.com

I keep forgetting to post this but it's exciting news for me.
A couple of weeks ago a slightly revised version of my blog post Six Things My Parents Did Right When Teaching Me About Money was republished in the Money section of familyshare.com

I've been really excited to see how well it was received, 4,963 views  and  3,072 shares to date.
I thought about blogging for a LONG time before I actually started. I was really worried about how my content would be received, I didn't want to just waste my time. I have received a lot of great feedback and I know I've been able to help some people work on getting their finances in order which is what this project is all about. This article's success is one more confirmation that I'm doing something worth doing. That's a great feeling.
Go check out my article here, share if you'd like and spend a moment looking around, there are some other really great articles on the site. I'd love to hear what your favorites are, leave a comment below so I know which ones to check out.

Saving Money: Birthday Edition (Part Three)

Spend Less, Give More

The gift that keeps on giving

As parents, it can be very tempting to want to give children lots of STUFF. Stuff they need, stuff they want, stuff you want, stuff they don't even know they want. Fulfilling my 3 year-old's wish list this year, would have cost roughly $1,000,000. 

Nope, not a typo. Along with a squirt gun, toy cars, a Buzz Lightyear with wings and a laser, a golf glove, a birthday cake, and plenty of other things I don't remember. 

He also wanted a four-wheeler, a tractor, and a combine, and he didn't mean toys or power wheels. 

I purchased a few of the things that were reasonable, but less than I could have, and far less than he wanted.

He did get the "Red Combine" cake he wanted, thanks to a little spray paint:).

Most of us have financial constraints that limit what, and how much we purchase for our children. 

I'd like to suggest setting a budget of how much you can spend on your child, and then spending less than that. If possible, significantly less.

Before you draw the conclusion that it doesn't seem NICE or FAIR or GENEROUS. Hear me out.

Buy a couple of things that will make your child very happy, but stop before you hit your spending limit, and put the rest into savings for that child.

I started this when my oldest turned One. There aren't many things a one-year-old really wants or needs, but there can be many things a parent wants for their one-year-old. I decided rather than fall into that trap I would buy a few presents and then put the rest of the money I had budgeted into his UESP education fund. It continues to motivate me to shop sales and limit my overall spending, knowing that I am giving him a far more valuable gift than another toy or shirt he doesn't need. We may not be able to pay for much of our kids schooling, I don't know what our financial future will hold, but something is better than nothing.

The type of savings you choose for your child may vary based on your values, goals, abilities, and the age of your child, some people don't want to pay for college or trade school.

Other savings goals may include:

First Car

Down Payment on a Home

Mission

Wedding

Custodial IRA (if your child has earned income. This money could be used for education, retirement or a first home. If you choose to go this route discuss the pros/cons and risks thoroughly with a financial adviser.)

Remember, small amounts add up. Investing just $20 twice a year (Birthday and Christmas), for 18 years at a 6% rate of return, would yield about $1200 upon graduating from high school. Now that's a gift.

More than anything, this gift can teach them the power of sacrifice, self-control, and delayed gratification, and that's a gift that keeps on giving.

View my disclosure here.

Allowance: Money without Work

How Giving An Allowance Can Instill in Children a Willingness to Work and Serve

(Ok, it's only one SMALL aspect, but hear me out)

Should You Give Your Kids An Allowance Or Should Money Be Earned?

What Do You Think?

My son turns 3 this week, and we're starting allowance.
I'll be testing my allowance theory and sharing the successes and failures of the journey in future posts.

Yes, I believe in Allowance.
Allowance, as in money that's given, not earned.

Does this surprise you?
It surprises me.

I am a believer in hard work.
I used to think that giving kids money they didn't have to earn was simply a great way to teach them that they don't need to work.
I also feel that when kids are given things rather than working for them, they don't learn to manage money.

So, why allowance?

I also believe that there is too much emphasis on money in this world.

Money is often a source of control.

Too often, Money = Power

Too many kids (and adults) only want to work if there's money involved.

If Work = Money and Money= Power/Control, why serve?

Here's my Suggestion:

Give your children a small allowance just for being part of the family.

Not because they're good kids, not because they're hard workers, just because they need to learn how to manage money and spend appropriately.

Give them a small enough amount that they'll still want more, but give them enough money to teach them about money. 

Give them jobs that they do just because they're part of the family.

We started jobs at age two:

Taking his dishes to the sink after meals

Putting away his toys

Unloading his dishes and other plastic items from the dishwasher and putting them away

Putting his dirty clothes in his laundry basket at night.

He is learning that work is a responsibility whether it's financially profitable or not (this promotes service).

He will understand that even when he begins to make more money from an employer than he can from mom, he is still expected to contribute to the household.

He is learning that fun is great, but that work is necessary. 

I praise him instead of pay him, and he values that praise.

When kids want to earn more money then they can do more jobs

How you manage this is up to you.

You could make a list of jobs and the amount you are willing to pay for those jobs. 

They can come to you and propose a job they're willing to do and you can negotiate the pay rate.

They can present an amount they would like to earn and you can give them a list of jobs they need to do to earn that amount.

How do you motivate kids to work if they're not getting paid?

If they don't do their jobs, rather than not getting paid, they lose privileges such as playing with friends, TV time, video games, they lose toys that aren't put away, driving privileges, or whatever works for you and your child.

Interested in more about Kids and Money?
Read my post Six Things My Parents Did Right When Teaching Me About Money
I also HIGHLY recommend this book for a more in depth look at teaching kids of all ages about money, it's an easy read, well written, and has great examples.
And follow us as I share about my little golfer's money managing adventures.

Instead Of...

Using Alternatives to Save Money on Baby Gear

Instead Of...

A baby bathtub typically costing $20-30

Choose...

the Summer Infant Bath Sponge

It costs less than half as much and can be used in the sink or the regular bathtub, whichever you prefer. This is easily one of my favorite baby products.

Instead Of...
A Diaper Genie with Expensive Refills
Try...
A metal trashcan with a lid


Instead Of...

A changing table $$$ a pad $20+ a pad cover $8+

Try...

The JJ Cole Diaper Caddy

For around $30 it contains baby's necessities and can easily be moved from room to room.
(If baby's room is not on the main living level in your home you'll love that you can keep one in your living room and not have it be an eyesore).

Instead Of...

A Maternity Pillow costing $50-100

Use...

A regular body pillow

Walmart has one right now for $10.88, you can also find them on Amazon for about $25


Instead Of...
Sticking with Walmart, Target and Amazon
Check out...
Ikea's baby department if you live near one, they have some great items that might save significant money. I love their toys, bibs, dishes, and I strongly considered buying one of their cribs. Ikea cribs are smaller than most, which some might find to be very convenient.

Instead Of...
Buying an expensive name brand nursing pillow
Visit...
NursingPillow.com and enter promo code BBFAC1 which will make the pillow free when you pay for shipping&processing. You'll end up with a nursing pillow for $12.95.




 The same code will work at their sister sites:
www.uddercovers.com
www.sevenslings.com
www.carseatcanopy.com
www.milkbands.com
www.bellybuttonband.com
www.babyleggings.com
www.hotslings.com

I have personally used their nursing cover, milkbands, nursing pads, and sling and have been very pleased with every product.

Instead Of...
Buying a bunch of expensive baby toys that just end up being clutter.
Purchase...
An Exersaucer or Jumparoo (As a side note, at $55 and $75 these are both good prices right now)
It's convenient because it provides a safe place to set your baby and the toys don't get lost. I prefer the Exersaucer over the Jumparoo because, in my experience, when they're little it's easier for them to turn the seat in the Exersaucer and when they get bigger it helps them practice their balance. My babies have started loving them between 4-5 months when they are strong enough to hold themselves up, and I use them until after they start walking to keep them contained.

If you Really want to save money...
Instead Of...
An infant carseat and stroller
Consider...
A Convertible Carseat and a baby carrier.
Chances are you will need to buy a convertible car-seat anyway in order to keep baby rear-facing until age two as is recommended, so perhaps it would make more sense to start out with a convertible.
Find out everything you need to know about choosing and using a convertible for a newborn Here.
The Maxi Cosi Pria with Tiny Fit, and the Combi Coccoro are even recommended for preemies! See the link above for other great seat recommendations and information
I'm considering doing this if/when I have another child. Instead of clicking their car-seat into the stroller, or setting it on a shopping cart, or lugging around that painfully heavy thing, I'll put baby in a baby carrier and have my hands free to manage the other two.
A great, inexpensive baby carrier I would recommend is the Infantino Sash Mei Tai Carrier. I tried it out with newborn number two and was very impressed, especially for the price. It lends the comfort, support and versatility of a wrap, but is easier to put on.
 


Instead Of...
Sticking with a Traditional In-Store Baby Registry
Start an Amazon Baby Registry Here
30 days before your due-date you are eligible to purchase remaining items for an extra 10% off (15% if you're an AmazonMom member)!!! And you can add products from other websites so if you've shopped around and found great deals it's a good way to pass those deals on to people who want to purchase gifts for baby.


Instead Of...
Buying Diapers Ahead of Time
Wait...
And find out which diapers actually work for your baby.
I regularly hear the suggestion to buy a box of diapers every month until your baby gets here to ease the financial burden once he or she is born. While this may seem great, it really makes no sense to me. In my experience, I've always been pre-paying medical bills (hundreds of dollars a month, so life's not really less expensive before my babies arrive) Why not open a separate savings account, take the money you would be spending on those diapers and stash it away. Then you don't risk buying boxes and boxes of diapers that won't work for your little one. What of your baby is allergic to the diapers you bought? My first baby could use any diapers, though for those first couple of months I preferred Huggies Little Snugglers. For my second, I bought Little Snugglers and he leaked out of them, constantly. The only diapers he didn't leak out of were Pampers Swaddlers, until he was 4 months old, and then his BM's changed and we can now use any diapers, yay for Sam's Club and Target brand diapers!!!
If you've saved that money instead of buying diapers with it, you can try different brands without having to try and exchange them, or, since you've already worked diapers into your budget you can use that money for other baby necessities, pictures (newborn pictures are the best!), or a babysitter for a night out (or grocery shopping)!!!

Visit brianmickelsonphotography.com to check out an awesome photographer with awesome prices!

How have You saved on Baby Gear?



This Post Contains Affiliate Links to help you locate great items at great prices. I haven't recommended anything I wouldn't choose myself. Click Here to view my Disclosure.

The Day I Became A Victim of Credit Card Fraud

(And Why I Prefer Credit Cards Over Debit Cards)

 

Credit Card fraud is something I've read about, I've studied the laws, I've heard about it in the news, Target anyone? Heartbleed bug? I know there are laws to protect consumers, like me, against credit card fraud. Credit and Debit card companies like to advertise as if these low/zero liability laws are a benefit specific to their card. 

However, I don't think I really believed that I could actually be a victim until it happened.

I logged on to Mint.com to do some budgeting. I login about once a week to categorize transactions and see where I'm at budget-wise. That night I logged in, waited for my accounts to update and then went in to categorize, the first thing I saw was a pending transaction from two days before in the amount of $402 at PetSmart. I haven't set foot in a PetSmart in at least a year, and I'm not sure I've ever made a purchase there. My stomach dropped. I know there are laws protecting me from unauthorized charges to my card, I also know that these type of things can be a big hassle, hours of phone calls, paperwork, waiting for charges to be reversed, I was devastated.

All in all the ordeal went quite smoothly, within 5 minutes I was on the phone with my credit card company informing them of the unauthorized charge (and texting my husband to make sure he hadn't just purchased a bird, two fish, and adopted a puppy), I was told I couldn't dispute a pending transaction. When I explained that I absolutely hadn't been inside ANY pet store within the last year, that I do not even OWN a pet, and that I was positive my info had been stolen somehow, but that my card was still inside my wallet, they quickly filed the dispute and cancelled my card. That phone call took about 10 minutes.
All the legitimate charges from my previous card were transferred to the new one, and less than 48 hrs later I had the new card in hand. Then I checked my account online about every 2 days until two LONG weeks later, I saw that the charge had been removed.

What I did WRONG...

I didn't put it in writing.

I should have written a follow-up letter(sent by certified mail) or e-mail(with a read-receipt) to document that I had notified them so that if for some reason they tried to hold me responsible for those charges I would have a legal case against them. Every time money is involved keep a paper trail.

Why I Prefer Credit Cards Over Debit Cards:

If the charge had been made on a debit card the money would have been gone. Instead of just waiting for the charge to be dropped, I would have been waiting for the money to be put back into my checking account. Depending on the day, that missing money could have made me late in paying bills, short on my house payment, or without enough money to buy groceries. Those situations could have resulted in expensive late fees, high interest loans, or overdraft fees. 

Now, hopefully I have an emergency fund that would have saved me, but what if I hadn't noticed immediately and they had maxed out my card; or with a debit card, drained my checking account and even sent me into overdraft? 

This does NOT mean that every person should use a credit card. If credit cards are a temptation for you to go into debt, STAY AWAY. The expenses incurred from a one-time incident like mine would still be smaller than racking up credit card debt and paying interest every month. Every situation is different. 

If you stick to a budget and are good at exercising self-control so that you don't end up carrying a balance on your credit card, then a credit card can be a great tool and a protection against financial damage from fraud.

For more information about Lost or Stolen Cards and the laws that protect YOU, visit the Federal Trade Commission Website here.

Budgeting Simplified

If I've managed to convince you to TRY budgeting, you're probably wondering where to start.

Keep it simple. 

Start with just a few categories, then break them down into smaller categories as you find it's necessary/helpful

If you've never budgeted before, start tracking how much you spend in each of your predetermined categories. Next use the amount you're currently spending to determine an appropriate budget for those categories.

There are many ways to budget, try one, if it doesn't work, try another one.
In the last 8 years, I've used 6 Budgeting Methods. 

If needed, try a combination of methods.

There are 4 main components to a budget:

1.  Fixed Expenses: The things that don't change (or don't change often)
This may (or may not) include:
Mortgage/Rent
Auto Insurance
Health Insurance (If you pay for it yourself)
Life Insurance
Internet
Cell Phones
Spending Money

2. Variable Expenses
Groceries
Utilities
Water/Sewer/Garbage
Gas (Heat)
Home Improvement
Charitable Contributions
Auto Insurance
Gas (Car)
Entertainment

3. Irregular Expenses
Medical Expenses
Auto Service and Parts
Clothing
Birthdays
Car Registration
Service/Parts
Home Repairs
School Related Expenses
Christmas

4. Goals/Savings
Retirement
Emergency Fund
Education
New Vehicles
Down Payment on a Home

Debt
This may be a fixed expense if it's a mortgage or car payment, or in variable expense if it's credit card payment or Home Equity Line of Credit that fluctuates. It may show up in your goals category if you are trying to get debt paid off, or it may not be part of your budget at all [insert virtual applause here!]

Budgeting seems simple, estimate your monthly income, estimate your monthly expenses, designate how much income should go to each expense then adjust the allotted amount until all your categories fit within your income.

So why isn't it simple?

What makes Budgeting difficult for you?

The difficulty of budgeting typically stems from one (or more) of three difficulties:

Irregular Expenses like car registrations, birthdays, swim lessons, soccer, school clothes, Christmas, auto insurance, oil changes, tuition, on and on, it can seem impossible.
Surprise Expenses/Emergencies: a car breaks down, the water heater dies, broken bones, chipped teeth...

OR

The Budgeting Method you're using just doesn't work for you.

Here are some possible solutions:

Irregular Expenses

Write down all those expenses and the amount you expect to spend on them.

It might be easier to remember them all if you list them by month

Here's an example:

January

  Birthday               $XX

February

  Birthday                $XX

  Valentine's Day     $XX

  Birthday                $XX

March

  Birthday                $XX

  Birthday                $XX

April

  Car #1 Reg.           $XXX

May

  Mother's Day        $XX

June

  Father's Day          $XX

Then add all the expenses up and divide the total by 12(months).

This is the amount you will need to put away each month(either build it up in your checking account or open a separate savings account for just this money) to cover those irregular expenses.

There is a great FREE website that will do this electronically:

savingyourfuture.org

Try it out and see if it helps you keep your budget on track.

Emergencies:
Start building an emergency fund. The typical recommendation is 3-6 months of expenses, but if you don't have anything I recommend starting with a goal of a 1 month emergency fund.
By saving 10% of your income every month, after 10 months you will have acquired a 1 month emergency fund. However your income is probably more than your basic necessary expenses so really by saving 10% for 10 months, or 5% for 20 months, you'll have surpassed your goal, especially when you add in earned interest.
[Speaking of interest, we all know that interest rates are low right now, great if you're a borrower, not so great when you're trying to save. Try opening an online/high yield savings account for a slightly better interest rate, it also makes your money slightly less accessible (it typically takes 2-3 days for funds to transfer to your checking account) so you're more likely to only use that money in an emergency. Some companies that offer High Yield Savings Accounts include HSBC, American Express, ING, and Ally]                                    
***This is not an endorsement for any particular bank, compare interest rates and policies to decide if one of these accounts works for your situation.
Establishing an emergency fund will protect your budget from hardships such as car repairs, home repairs, or job loss.

Budgeting Method:
If your budgeting method is too complicated, confusing, time consuming, or overly confining, chances are you'll fail. There is no one budgeting option that will work for everyone, and just because you find one that works now, doesn't mean it will always work for you. If it doesn't work, try another option.
I'll address budgeting methods more in depth in another post, but for now here are 2 ideas to try:

The Envelope Method is a great, simple way to start budgeting. It's visual and it's easy.
1. Gather a stack of envelopes (one for each budgeting category)
2. Write the name of each category on an envelope
3. Fill each envelope with the amount of money you've budgeted for that category.
4. At the end of the month or pay period, however you decide to budget, you can save what's left or leave it in the envelope to rollover to the next month.
            If you prefer to buy a  professional envelope system, Amazon has a couple of great options here and here.

Mint.com is a free, and quite user friendly, online option.
I currently use Mint.com to manage my budget online.
Mint automatically pulls all of my credit card transactions and allows me to easily categorize those transactions so I always know where I stand within each Budget Category.

Why Budget?

Really?

Why Budget?

Why do YOU Budget?

or

Why DON'T you Budget?

Many people feel that budgeting is too restrictive and frustrating. 

I find it Liberating.

 Maybe I'm CRAZY?

Perhaps I can make you crazy too!

I budget to... achieve Goals, financial goals specifically, and most of my goals are financial since most things in life seem to involve money.

I budget to... have Peace of mind. When I know where my money is going I also know whether or not I have enough to cover my expenses. I find peace in always knowing where I stand.

I budget to... acquire Security. When I know where I stand, I know if I'm prepared for the future.

I budget to... stay Motivated. When I can know where my money has gone I am more likely to make choices that align with my personal values (Not buying that candy bar means I can put that dollar toward a day at the pool with my kids or a new pair of shoes)

I budget to... have Fun. When I plan for the future I can avoid debt, and money that otherwise would have been spent on interest I can spend on other things.

Four EASY Ways to Improve Cash Flow

 Four EASY Things You Can Do TODAY to Improve Your Budget

1. Compare Insurance Premiums
When was the last time you shopped insurance rates? If it has been more than a year call 2-3 different insurance providers and ask for quotes on your auto and homeowners/renters insurance. It should take less than 30 minutes and can save you money almost immediately.


2.  Sign up for Swagbucks
Swagbucks is a search engine that shares its ad profits with its users. Download the toolbar, use it as your search engine, and it will randomly award you with points called SwagBucks, these SwagBucks can be redeemed for Amazon gift cards, PayPal credits, and other great things. I signed up about 3 years ago and use the Amazon gift cards I've earned to buy books for my Kindle and Christmas presents for my family, as well as diapers and other non-exciting things.

Sign Up Here
 

3.  Take A Survey
Surveys are a great way to bring in a little extra cash in your spare time. The company I've found the most success with is MyView. Earnings can be redeemed for prepaid credit cards or gift cards to Amazon and other great retailers.



4.  Spend More on Groceries
WHAT???
This is supposed to be about SAVING money! I don't mean always spend more on groceries, I advocate shopping sales and using coupons, BUT... I have found that buying a few more expensive items at the grocery store can reduce the temptation to eat out, thereby keeping more cash in my pocket. If eating out is a budget buster for you, increasing your grocery budget could help your overall financial picture.
Care for an example or two?
It's easier to skip the sandwich shop and make your own at home if you have great bread, high quality lunchmeat and delicious add-ons.
I'm happy to make my own fried rice and orange chicken, but I'm more satisfied and less likely to splurge on eating out if I splurge on a bag of pot-stickers from the frozen food aisle to go with it.

This Post May Contain Affiliate Links, View My Disclosure Policy Here.