Tag: money habits

Talking to our kids about money

smbaccari

Talking to our kids about money…

There is extensive evidence on how people’s emotions and feelings around money are shaped by the actions we see, hear, and feel pertaining to money when we are kids. Our fears, our habits and our anxiety around money usually comes from experiences we had as children. No pressure here on us parents! Like our job as parents is not hard enough! Ok so let’s break it down.  Perhaps we need to put some rules in place like trying not to argue about money in front of the kids when they are young? Easier said then done…

When money is tight, it’s stressful, and the kid’s associate money with a tense situation and learn to “fear” money or think they just need more money and it will all be ok, right? As adults we know this is not always true. More money does not make all the problems go away, if the habits don’t change and we spend more than we make.

So how do we fix this? We know we need to slow our roll, create budgets, and cut back on the non-essential items… Ya, Ya, Ya…We all know what we NEED to do.

The issue is how do we not create kids that have fears or bad habits around money?

Money does NEED to be discussed and it should not be hidden from the kids. They do not need all the details of course but we do want them to appreciate money, respect money and understand the “value” of money. We also need to teach them money is earned as well, which I think makes it have more “value”.  When you “work” for your “cash” and you think you want a new toy or something, usually that toy is taken better care of when the kids pay for it themselves. Trust me, I have witnessed it firsthand with my own child over the years.  I’m not saying they have to work for ALL their toys. 😊These are the things our parents probably did with most of us as well. Sometimes as parents we “give” too much to the kids, even if we don’t have the money. It’s OK to sometimes say NO, or not at this time.  We don’t need the kids to think there is no money, just that money is not like a faucet that has an endless flow of money.  Social media has played a role in kids thinking they need to have what everyone else has! You can just say NO.

Maybe it’s Ok to show the kids the bills, like the electric bill and why we shut lights off when leaving the room.  Opening a savings account for your children say between the ages of 7-12 or so is always fun. Make sure they are with you when you set up the account and the rule is they MUST put 15% of any money they earn or are given as a gift, into the account first. Then they can do what they want with the rest. This will help them get in the habit of “paying themselves first”. Not a bad idea to also encourage them to donate some of that money to a charity here and there.  Once the kids are in high school or have a “paying” job, lets play it safe and for this conversation, they have a W-2 job working part time, you could consider opening a custodial ROTH IRA for the child. Keep in mind once they are 18 or 21, depending on your state laws, it’s their IRA now, so do go over the rules with them in detail. Custodial Roth IRA: Your guide to Roth IRAs for kids | Fidelity

Once they start high school. And college is on the horizon, you MUST talk about money! College is expensive! Even state schools can run as high as $35,000 per year! As parents we want to do everything for our kids, including paying for college. But it’s not always possible and this again is a time when it’s OK to say NO to some things. Maybe it’s NO to the most expensive college they picked, due to little or no aid. The budget is important here. If college debt is going to be more than what they will earn the first year out, might want to re-think the school choice…. Student loans are ok but keep it LOW! Show then the online calculators and how interest calculates! It’s 4 years of their lives, do they want to pay for it for 10+ years. Student Loan Calculator | Bankrate

 If we talk to the kids throughout their lives about money and make it an open conversation maybe when it comes to large expenses like college, it will be an easier conversation? Discuss not spending more than you make, discuss paying yourself first, aka the 15% in the savings account, discuss investing and retirement accounts, show them your retirement account statements… Let’s talk money with our kids!

Habits

smbaccari

We all have habits, some are good habits, some not so good. Habits are part of our behavior in all the areas of our life. Some people are very organized, Take Jess for instance, her work papers and planner… are so organized and color coded! It seems to come easy to her when it comes to important items like work. She started this habit very young as a student and has carried this habit into adulthood. I on the other hand, really must focus on keeping myself somewhat organized. I was never an organized student, well compared to my kid. But at the same time, I know it’s a “weak” spot for me so I do what I can to make small positive changes to be better organized.  This is an issue I could easily talk to a stranger about, and they would be happy to make suggestions and share their organizational skills or lack of them as well…

When it comes to our money habits. We NEVER want to talk about them. Nope, we don’t want to share that stuff! We all have money habits, again some good, some not so good. Let’s be realistic, we can’t fix all our bad money habits overnight, and maybe we don’t have to fix all of them? Maybe some are not that bad?  But I am guessing we secretly have some things we do repeatedly, that we say to ourselves, why do I do this to myself. 

In today’s world with so much online banking and automation that we can do, some of these bad habits might be easier than we think to break. To really start to make changes, you need to be honest with yourself as to what is a problem.  Write it down! Put it on paper and look at IT! Just ONE problem, not all or many of them if there is a list… Own it! Then write out the steps you need to take to make this a bad habit you no longer have.  Maybe you share your bad habit you are trying to break with someone you know will emotionally support you. That might be a spouse, a good friend, a co-worker.

Setting a goal is easy, executing it, not always as easy.  Maybe just saying the habit out load to someone and talking about it will be the biggest step. After that it might get easier to mentally tackle the habit. Good luck, stay focused and you got this!

Week Three Money Challenge

smbaccari

We spent the last 2 weeks looking back at our bank statements over the last three months or so to see how we can FREE up $100.00-$200.00 per month. That “Found” money we put 1/2 in a retirement account we already had, or we started one. The other half we put in the “emergency fund” which hopefully is in a high yield savings account. While you were scrolling those bank statements/activities online, did anything else jump out at you? Maybe there were things like your debit card at the grocery store! Maybe there were random trips here and there that you see a credit card or debit purchase? It’s not pretty sometimes, right? Sometimes it feels like money just passes through our hands like water…. ☹

Being more mindful of WHAT you spend money on might help us NOT spend as much???  Everything we do in life in general seems to be due to a “habit”. So what if we make a habit of really thinking about IF we really need to spend money on certain things or items, vs the impulse to spend. It’s hard! I get it! Maybe we say ok this week my budget for groceries is $100.00 that’s it! I will use cash only and really plan for the week as well as plan meals out. I am assuming this for a family of four.

Maybe it requires you to go to two or three different stores over the weekend to get everything you need. Assuming the stores are not far from each other, maybe it’s worth it! I started buying things at ALDi and another main grocery store than the one at the bottom of my street. I did some rough math and saved at least $30.00 this week! I even googled some coupons and saved on things like the special dog food at the pet store! Hey, it all adds up! Little by little more money ends up in our pocket vs out of our pockets. Your challenge for this week is MIND SET! Be aware of what you’re spending money on. Do I REALLY need this? Is this product sold some place else cheaper? EX. I buy my organic spinach at BJ’s, which is the same price at my grocery store, but at BJ’s it’s three times the size and I freeze it!  Let’s only buy what we need for a few weeks and see if we have some extra cash at the end of the month before the next check shows up. That’s how we start moving in the right direction, living on LESS THAN WE MAKE!! Not saying it’s easy, but it is possible…. We do this EVERY month. This is our NEW Habit.