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A custom debt-reduction budget that fits your own family’s size, needs, etc., is crucial to debt reduction success.

3 Easy Ways to Teach Kids About Money

As a parent, one of our big jobs is to teach kids about money. Whether we like it or not, at some point our kids will be out on their own in the world. And the last thing I want is for them to have to move back in years later because they couldn’t figure out the financial aspect of living on their own. Therefore, teaching them about money and budgeting is high up on our list of regular priorities. So, here are the 3 easiest ways we’ve found to teach kids about money, for long term retention. Hopefully!

1. BASIC money lessons

Since children’s brains  process information differently than adult brains do, starting with basic money lessons is the way to go. This generally breaks down into creating information into smaller chunks. The more simplistic the concept the better, as these concepts lead to longer term retention.

One of the easiest first money lessons to teach kids is by using a simple piggy bank (doesn’t have to be a pig though!). This is due to the fact that kids are very visual learners. Just giving them something to physically see and touch begins the teaching process.

Some great ways to utilize this simple tool are:

  1. What each coin looks like
  2. How much each piece is worth
  3. How many of them it takes to make $1.00

Once they have that down, a good next lesson is about sales tax. This helps kids learn just how much things actually cost, besides what just on the sticker. In order to do this, you’ll need to know the sales tax rates in your city specifically so that you can teach them how to properly calculate it.

The best way I’ve found to do this is to take my kids shopping with me. I have them pick out something they want for educational purposes only. Much to their dismay, I’m not actually planning to buy them anything for this lesson.

Teach Kids About Money EXAMPLE

If my child has $10.00 with them and sees a toy that costs $9.99, they’ll assume they have enough to buy it. This is where sales tax lessons come in.

Our sales tax here is 7.25%. Therefore, the sales tax will cost an additional $.71 on top of the $9.99, for a total cost of $10.71. Which means if they only have $10.00, they’ll still need another $.71 to afford the toy.

Even if you happen to be one of the few who doesn’t have sales tax in your area, this is still a necessary lesson to be taught.

2. SAVING money

Once kids grasp the concept of how much they actually need to purchase the things they want, saving money is up next. This can be a very difficult concept for a lot of children (and adults too!), because they want everything immediately.

I like to start with smaller savings goals, because this can help keep them on track for their larger goals. This is where the piggy bank comes in great handy. Since they can physically see how much money they’ve saved, it’s easier for them to see how far they still have to go. I typically like to have them take out all of their money once a week and count it. This not only helps them get a better grasp on what each denomination is, but also lets them see how far they’ve come.

Once this basic saving skill has been grasped, it’s time to move on to compounding. This is usually a good lesson to be taught with larger ticket items, which is all age dependent. Typically, at this point, the piggy bank isn’t the best way to save for the larger items. So, this is the time when I begin talking to the kids about moving money into a high yield savings account. The rates vary, but they will be able to save more, faster, simply due to the magic of compounding.

Compounding

Here is a great example of how compounding works with $100.00. If this is all they have to put in and the high yield savings rate is 4.35% (which is what ours is currently at), then at the end of one year they will have $104.35 in that account. This may not sound like much, but they just made an extra $4.35 without doing anything. Help them imagine how much more they could save if they add money monthly instead of just once a year!

3. make that MONEY, kids!

Now that they are more motivated to earn money, getting them to work for is up next. Getting children to do chores around the house is one good way to put kids to work so they can earn money. While this is not always my favorite way to teach them (because some kids can be so difficult sometimes), it’s a good place to start. How much you choose to pay them is entirely up to you. But I like to make the amount determinant upon how much of it they get done and how well the task was performed.

My other favorite way to have them earn money is by working for me. The perk of being a business owner is that I can outsource some things (that are age appropriate) to my kids. And most of the time, my kids prefer to do work for my business as opposed to chores. Therefore, my kids working for me helps teach them how to make some of their own money by working for someone else. Even if the someone else just happens to be their mom!

Teach kids about money summary

Overall, teaching kids about money can be as easy or as difficult as you make it. But, as a parent, it’s our job to give them the building blocks now can help ensure their long term financial literacy, and hopefully, success. To do so as efficiently and easily as possible, keep these skills in mind:

  1. Teach them money basics its worth (Plus sales tax)
  2. Learning how to save is crucial (Plus compounding magic)
  3. Teach them how to earn money

Once they have these foundational lessons down, there are plenty of more  complicated financial lessons on the horizon. Oh the joys of parenting sometimes!

What are some ways you have successfully taught your children about money?

4 Ways to Stay Frugal with Money

In the fast paced life of today’s world, we have pretty much everything at our fingertips. While that is fantastic in so many ways, it can also be really financially problematic. This land of instant gratification can make it so easy for our money to slip right out of our hands. And when that happens, all of our hard work to become financially fit goes out the window with it. So, here are 4 great ways to help you stay frugal with your money. Even when Amazon Prime day is lurking around the corner!

#1 Pay off credit card monthly

Even if you prefer to pay cash whenever possible, using a credit card is just much easier to get things in life done these days. In fact, approximately 80% of us prefer a credit card over cash for transactions, and most retailers prefer this method of payment as well. But, paying with a credit card for the majority of your purchases can also make it extremely easy to rack up credit card debt.

The best way to avoid this is to make sure you pay off your credit card(s) in full every month. When you do this, you avoid any interest charges from accruing. Plus you will still get to take advantage of the credit card rewards, which makes it more like free money.

I suggest checking your balance weekly so that you know exactly where you’re at with your spending. We do this every Sunday when we have our budget meetings and it helps us stay frugal.

#2 Open a high yield savings account

No matter what your debt-to-income ratio is, there is always room to save something. It could be as little as $20 a month, but that will add up over time. We’ve found the best way to bulk up our savings is to switch to a high yield savings account.

A regular savings account at the bigger banks are typically giving out minimal interest on your money. Not even enough to keep up with inflation. But, the high yield savings account with MySavingsDirect that we use is currently giving us 4.35% interest on our money. While that may not seem like a ton, even this little bit helps us to stay frugal by saving a little bit more each month.

Every week when we have our budget meeting we discuss how much we can put in there. But for those who get a regular paycheck, putting a specific minimum amount in each month can really help boost your savings faster.

#3 stay frugal by determining Needs vs wants

Setting up your financial goals and a good budget are good first steps. But staying on track can certainly be difficult when life happens, or a really good sale on something you’ve been eying. This is the time for you to dig deep into needs vs. wants.

Determining if the item/service is a need or a want can help you be more disciplined about your money and stay frugal. Before you pull the trigger on anything, it’s good to think long and hard about any purchases.

If it is a need, then go ahead and do it. But if the item is actually something you want instead, it’s usually best to hold off. If you still want the thing after you’ve really thought about it for some time, and it’s within your budget, then go for it.

But just remember that every “want” you purchase can derail you even a little bit from overall financial freedom. So, it better be something really good!

#4 avoid peer pressure

In the game of financial freedom, you aren’t even necessarily your own worst enemy. Friends and family can play havoc with your own personal finances if you let them.

We all want to have a good time with our friends and family, but it doesn’t have to kill you financially to do so. This is the part where you should budget for some fun and entertainment in your monthly budget. Once you decide how much that monthly allowance is, don’t go over it. Having this in place ahead of time will help you feel more freedom to relax and have a good time, while still staying frugal.

stay frugal summary

Overall, there are plenty of great ways to help you stay frugal if it’s really that important to you. And I think, for most of us, that’s the case. But we also don’t want to live life only to reach certain financial goals. We have to enjoy living life at the same time. Everything in life is about balance, and frugal finance management is no different. So, to help keep yourself on track, you should:

  1. Pay off your credit card monthly
  2. Consider opening a high yield savings account
  3. Determine your needs vs. wants
  4. Avoid peer pressure like the plague

When you can do all of these things regularly, the balance you seek between enjoying life and creating wealth should be much easier to come by.

What are some of your best tips and tricks to stay frugal?

4 Ways to Create a Budget Without a Fight

I don’t know about you, but we are always trying to do better with our finances. One of the best ways we’ve found to do this is by creating a budget together. And having a weekly budget meeting where we discuss every aspect of our budget helps keep us on track and speaking the same financial language. Just these few things have really helped us in our financial journey towards getting out of debt and, hopefully, retiring early.

Of course, this doesn’t mean that we always see eye to eye on everything in our budget. Therefore, here are 4 ways to create a budget without a fight.

#1. DETERMINing YOUR WHY

Determining the main underlying reason why you both want to create a budget is extremely important. While you and your spouse may not be on the same page regarding every aspect of finances, discussing your main reason WHY can really help get you more in sync. Ultimately, if you don’t have a strong reason to create a budget in the first place, then there really isn’t any point in doing so. And it may just cause undue stress on your relationship instead.

When it comes to most common reasons why couples choose to begin a budget, here they are:

  • Debt pay off
  • Build an emergency fund
  • Save to retire early
  • Fund travel
  • Home improvements
  • Purchase a house
  • Grow a family

While you and your spouse’s WHY may not fit into these categories, it really doesn’t matter what it is. As long as you both have on and discuss it in depth. You and your partner’s WHY will become your driving force to not only create a budget, but stick to it.

#2. CREATe THE VISION

Once you have determined both of your WHY‘s, then it’s time to discuss the best action plan to get to each of your goals. This can be both together, as a couple, and also separately. After all, you can’t do everything together all the time!

At this point, some great questions to pose are:

  • What is the ideal timeline for both of your goals to be reached?
  • How much do you both ideally want to save each month?
  • How much can you actually save a month with your current income?
  • Where are areas that you feel you both can cut back on?
  • What areas does your partner think you can both cut back on?

These questions are great jumping off points to create your budget because they are setting the foundation for all future budgetary discussions and goals.

#3. BUDGET CATEGORIES

The next step in this process is setting up the budget categories. Categories really help you see, on a monthly basis, what you are ACTUALLY spending on things, as opposed to what you THINK you are spending. Most of the time, what we think we are spending on things ends up being completely different than what we are actually spending. Therefore, this is a very important piece to any budget.

The categories I suggest to start with are:

  • Income
  • Recurring Expenses
  • Automobiles/Transportation
  • Food/Drinks
  • Household
  • Travel
  • Clothing
  • Gifts
  • Luxury
  • Savings
  • Investments
  • Misc.

These are the basic categories that we use, personally. However, if you want to break them down further to really dig into what you are spending on every little thing, then I highly suggest that also.

#4. BUDGET COMPROMISE

Once the budget categories are set up, then it’s time to determine how much of your income goes into which category. This can actually be the most difficult part of the whole process because it’s the most in depth. And due to this, it can create the most friction among couples. So going into it with an open mind and patience is really key to making your household budget a success.

The first year you do this can be the most difficult because you don’t have as much past data to pull from. While part of it is a guessing game, most of the big categories can be fairly easy to determine. These categories usually include:

  • Income
  • Recurring Expenses
  • Automobiles/Transportation

Once you have these categories figured out, you’ll need to take what’s left of your income and and divvy it up among the remaining categories. This can be much easier said than done though!

You and your partner should discuss how each of you thinks the remaining dollars should be appropriated. And this is where disagreements can come into play. So talk through each category calmly and in as much depth as possible to come to the best budgetary compromise on spending.

Create a BUDGET without a fight summary

My partner and I may not be on the same page with everything all the time (and who is, really?). However, we both respect each other’s point of view. We also both want to be financially independent by the time our youngest leaves the house, so we have a major goal.

Therefore, we talk weekly about our budget and change things accordingly when we feel like we are off track, if things change, or if one of us voices a concern. Sometimes, we decide that we want to pivot and reallocate our funds to one category more than another. This works well for us because we communicate well with each other. And we’re always careful to be respectful of each other’s opinions about where we would like to see the budget going.

Ultimately, good clear communication is the most important part when trying to create a budget without a fight.

What are some of the best ways you have found to create a budget without a fight with your partner?

7 Ways to Help Your Teen Build Credit

When it comes to having teenagers, there are a lot of things we as parents need to teach them. And nowhere is this more important than when it comes to to their financial education. Teaching our teens about money, finances, credit scores, etc. is extremely important to do before they leave the nest. There are many different ways we can go about this, of course. But, one of the most important things I feel that we can teach our teens is what a credit score is and how it impacts every aspect of their future financial lives. Therefore, before they leave the nest to fly on their own, helping a teen build credit is high up on my list of important lessons.

1. Get a job

One of the first things I told my teens when they turned 16 was that getting a job would be a good first step into the adult world. Not only does this give them some idea of what to expect in the work world, but it also gives them a first taste of managing their own finances usually. As a bonus, getting a job helps a teen begin to build their own credit.

2. open a checking account

Once your teen has a job, opening a checking account for them is the next best step to help them build credit. Most banks won’t let a child open a checking account on their own, so you’ll need to be a co-signer on the account until they are 18. This is also helpful when it comes to monitoring their spending, as it gives you a way to see everything that’s happening with their money. And it gives you good talking points to discuss with them about budgeting, when they get off track. Which my teens have done more times than I’d like to admit!

3. open a savings account

Whether your teen has a job and/or checking account, they can still get a savings account. We started savings accounts for our kids when they were much younger, just to put money into for them that relatives gave them for holidays. Having a savings account is a good way for them to watch a nest egg grow. And we have found it’s also a good place to put excess money they earn from their jobs is a savings account. This has helped rein in and regulate their excess spending on random junk they don’t need and help them save for bigger goals at the same time.

4. Open a Roth ira

When our kids started working for me, I opened Roth IRA accounts for them. These types of accounts can only be funded by earned income. So they can’t be opened until your teens have earned income that will be taxed. But, once they have some earned income to work with, you can open a custodial Roth IRA for them that will roll over directly into their name solely once they turn 18. This not only gives them a good first taste into investing, at much lower risk than when they do it as an adult, but also helps your teen build credit.

5. get a prepaid credit card

The next option is to help them get a prepaid credit card in their own name. Typically, you’ll have to be a co-signer on the account, as with all of the other accounts. But, with these types of credit cards you determine how much is put on the card to begin with, so that is all they have to spend. This works out really well if they have a job already also. You can tell your teen to set aside $100 – $500 to put onto the prepaid card and then use this card for all of their purchases. This way they are building credit while only spending the money they already have.

6. credit card authorized user

As another option to the prepaid credit card, you can add your teen to one or more of your existing credit cards as an authorized user. I did this for my two older teens just recently with one of the credit cards we never use that also has a high credit limit. I chose to put them on this one since we don’t use it because it’s easier for me to track who is spending what. Plus, since it has a really high limit, it helps boost their credit that much faster due to the amount of credit used versus the credit available. So far, they’ve both been paying off what they spend before the bill even closes, which is awesome!

7. teach them about credit scores

After all of these other options, the most important thing to teach them about is their credit score. Since they are trying to build credit, understanding how their credit score impacts their financial future is integral to overall financial health. If they have any of the aforementioned accounts opened, they can begin to see how their saving and spending are affecting their credit score. Which is a fantastic way to give them an early taste of how the whole system currently works. And don’t forget to show them how to pull their annual credit report each year so they can run through it for any discrepancies.

Teen building credit summary

Overall, there are a lot of great ways to start helping your teen build their credit score early on. While I don’t use the prepaid credit card method, I have used every other option to help my teens build their credit now. And, they’ve been doing awesome so far with the learning curve. So my hope is that by the time they are out on their own, they won’t have nearly as many issues as a lot of young adults do with their first taste of financial independence.

What are your favorite ways to help your teen build credit early?

The Benefits Of Minimalism From Health To Finances and More

For over a decade now, the concept of living a more minimalist lifestyle has been at the forefront of many people’s minds. The world is much more fast-paced now than it ever has been throughout human history, and sometimes this can leave people feeling stressed out and leave their bank accounts drained? How’s that, you may ask? Well, the overstimulation of such a fast-paced environment can give us too much to think and stress over; and the constant advertisements and pressures we feel through things like social media lead us down a dangerous path of overspending and living outside our means. 

So the same way, it’s essential to have health hacks to keep costs low in our lives and live more frugally; it’s just as important to have lifestyle hacks to keep costs to not just our bank accounts but our health low as well. One path towards that goal is minimalism.  Read more

Are you considering whether you should rent or buy? If you have bad credit, here are some things to consider before buying.

Buying a House When You Have Bad Credit

If you find yourself having to move you might be asking yourself, “Should I rent or buy a house?” Of course, both renting and buying usually mean a credit check so you’ll want to know your credit score before submitting an application to a landlord or to a lender for a mortgage loan.

When purchasing a home, a good credit score of at least 760 will get you the best interest rate, as CNBC reports. Anything under 670 is typically considered “subprime” while 579 or less is generally “bad.” If you’re in that category, it’s going to make both renting and buying difficult, but if you’ve got your heart set on purchasing a home, there might still be some options. Read more

Essential Tips for Full-Time Farmworkers

Agriculture is vital to the survival of humanity. Providing the basis for food security, farming has been, and always will be, a viable occupation. Farming provides large quantities of food and materials at relatively low costs and ensures the meat dispersed throughout the country is harvested by healthy animals. Modern farming began around the 18th century and continues to be a highly profitable business for many people. Like any occupation, farming comes with its own set of challenges.

 

Despite its contributions to the stability of the food chain, farming can be extremely dangerous. In fact, farming ranks as one of the most dangerous industries in the United States. Due to this, farms and ranches must follow strict safety guidelines when it comes to handling animals and equipment. This will protect owners and their employees from unexpected mishaps. Here are a few helpful tips for farm and ranch workers. Read more

Eliminate These Things From Your Wallet for Healthier Finances

Samuel L. Jackson and company never seem to tire of interrogating you about what’s in your wallet. They do this while pressing you to add a product that almost certainly shouldn’t be there. It is not just to cure your hopeless case of Costanza wallet. It is to help you gain better financial hygiene. Not only that, but it is remarkable how much better your situation can get by eliminating the things you carry with you. That is not to imply that removing a few things from your wallet will magically fix everything. But it is the beginning of a solution.

There are two major problems that have to be addressed in every financial crisis:

  1. You don’t have enough money to cover your expenses regardless of what you do.
  2. You are spending the money you have in a way that is contributing to the crisis.

Just about every financial problem has its origin in one of those two buckets. They are both buckets of hurt. The first problem cannot be easily addressed. You will need to increase the amount of money you make or decrease your lifestyle to fit the budget you have. The second problem can be addressed. Let’s take a look at a few of the things we can remove from your wallet that will help to address the problem: Read more

As a parent, your children are looking to you for advice, guidance, and modeling. Here are some time tips on helping your children succeed.

How To Boost Healthy Financial Habits In Your Family

How can you prepare your children for financial health? How can you give your children and teens a head start towards financial success?

 

As a parent, your children are looking to you for advice, guidance, and modeling. Young children model spending, saving, and earning habits. Teens learn financial literacy by watching what they do. You can set the course for financial success by practicing smart financial habits.

 

In the United States, only 17 states require high schools to offer at least one course in financial literacy. Many teenagers never really learn the basics of budgeting, managing money, communicating about finances, and assessing risk.

 

You can help your young children and teenagers develop good financial habits.

 

Here are 8 tips to get started right away.

Read more