It’s All About Choice


money pig Image from Good Search

Here we are, into the new year. The bills have arrived, which raises a question: Are you happy how you spent your money—or didn’t spend your money in 2013?

Did you go to the Nutcracker, after years of wanting to go, but thinking you didn’t have the money? Was this the year you baked bread, cookies or candy to give to the service workers in your life (postal, UPS, garbage, landlord)? Or was it the year you told those you normally spend money on that you’d given to a charity in their honor. Did you have a shopping budget, and stick to it for the first time ever? Congratulations! Keep going strong in 2014!

It all comes down to choice. This year, remind yourself that you are in control of the choices you make. Every day. All year. No one can upset you without you being “upset-able”. If you dread (insert group here) family, work, neighborhood… get-togethers, then make plans now to be somewhere else and with someone else for next holiday season. If that sounds impossible, another option is to make plans to show up at the event and not be offended, hurt, or angry. It’s about choice.

Back to your budget. Do you have it ready for the new year? It’s never too late.

Here’s a budgeting booklet download:

Print it out, put it together, and write in your categories. Most important is tracking your expenses. If this sounds too complicated, then save every receipt in an envelope and add them up. If your income varies, keep a running tab of that, too. Bottom line, you need to know income in, income out, and the difference +/-. If you have extra money, save it. Save it for long term (retirement, big goals), short term (six months rent, and fun.) If you come up short, look at where you’re spending. There are several factors to this part, but usually, it about the spending.

Teachable Money Moments with Your Child


teachable momentsImage credit: Good Search

Chances are, you weren’t taught about money. If that’s the case, hopefully you’re changing that pattern with your kids. No matter how old they are—even if they are at college, or raising kids of their own, it’s not too late to teach them. This of course, comes only if they’re willing to hear you out. There are ways to take advantage of teachable moments. If they’re not willing to listen, back off—but then don’t give in to kiddie tantrums or phone calls for money. I recently read that baby-boomers are far worse off than their parents when it comes to knowing how to save money. Their parents may not have had as much, but they knew how to save—and did. Begin now to teach your kids and your grandkids easy ways that add up.

One teachable moment can be offering choices. “The two things you want are out of your budget. You can get this toy for $1 today, or save and get that toy for $5 another day. For older kids, you can give them an allotted amount for clothing and tell them “This if what I’ll put toward your shoes. If you want the more expensive ones, you need to make up the difference.” If you send your teen to the grocery store for an errand, give them guidance. Send them off with a coupon for what you want, give a price range, “Get bananas if they’re less than .50 lb”, or give them directions to buy what’s on sale, “If bananas are more than .50 lb, see what’s on sale. Check the prices on strawberries.” If they have a cell phone, you can always ask them to call you from the store if they have questions. If retired husbands can do this, so can kids. For the child who moves back home and still spends money. Have them pay rent to you for the purpose of you putting the money in a special account to be given to them when they’re back on their feet, and have enough money put aside to move out.

You get more bees with honey. Praise your kids for things done right. If you can, do this in front of someone else. This includes good behavior and wise money choices. A phrase like “You’ll be so proud of  Joey for how well he handled his $1.00 at the store today” is a better reinforcement than, “You’ll never guess who behaved at the store today!” Make sure your praise is genuine and not sarcasm, or a left-handed compliment.

Eat before you go shopping. I remember as a kid and into my teens going shopping with my mom. If it was around lunchtime, we’d always eat at home before heading out. Two reasons: To save money. To keep blood sugars and therefore emotions in tact. As I got older, I’d insist I wasn’t hungry, and that I’d be fine. We’d pull into a parking lot and sure enough, I was hungry! I wasn’t interested in eating out, I just had a high metabolism, and if I hadn’t recently eaten, hunger pangs and crankiness set in. Like magic, my mom would pull a cut apple or some other form of portable sustenance from her purse. As an adult, I know I can go from not hungry to head-spinning hunger. If I’m headed out the door, I’ll bring food with me. A banana, a cut apple, some crackers, cuties or a sandwich for mid-trip. If you tire of a cranky child, try staying a jump ahead, offer a snack at home or in the car on the way to your errands.

Everyone will be better off.

The Average Cost of the Prom


th-13 image credit: Good Search

A new Visa survey says this year’s prom will on average cost $1,139.

WHAT?!

The survey didn’t break the spending down, but it includes dresses, tuxes, shoes, prom tickets, limousines, hotel or after dance events, corsages, jewelry, hair, makeup and extras.

In the last two years, prom cost has gone up 40 percent. As usual with this type of event it’s the lower income households that are being hit the hardest, and unfortunately, they are spending more money on the prom than those who can more easily afford to. According to the Visa survey, families with income less than $50,000 are planning to spend $100 more than the national average on prom. Single parents are spending double the amount of married parents ($1,563 versus $770.)

Of everything I’ve read and heard on this subject, Nat Sillin, Visa’s head of financial literacy, put it best. “It’s [the prom] become a social arms race. It’s an opportunity for parents to engage their teens and have a conversation about budgeting.”

I applaud Sillin’s comment, and am amazed to read and hear parents saying, “I never thought I’d have to spend so much” and “How am I going to afford all of this?” You do not have to spend so much. A choice is being made. You’re supporting your child in their financial illiteracy by spending their college money, or whatever else spending $1,100 could help ease your mind. Some say the prom is the new wedding, since people are getting married later. Okay. . . the average wedding is now $20,000 and many couples either start, or go further into debt. So, maybe in that since, the prom is the new wedding.

Full disclosure. I didn’t go to my prom. I wasn’t dating anyone, and saw the prom as something for those in serious relationships. Yet, I thought those in serious relationships were nuts to spend tons of money playing let’s dress up and pretend, and be part of the stories flying around school the following week.

Instead of prom, four of us—two guys and two girls —all friends, went bowling. None of us were bowlers, but we wanted to go out and have fun. We had a blast.

If you’re a parent of a teen who will be prom age next year. Start talking now. Start talking about values, money, and choices. To put a $500 dress on layaway while some of it goes on credit card, some paid off by check, and some by family pitching in, is mind boggling to me. Is a $500 dress worth it? That’s just the dress. Do you really need a limo? $800 shoes? (I heard a guy bought them.)

$1,139 could be a month or two of rent; a semester of books; an Alaskan cruise or a flight overseas; a down payment for a car — or, yes, one high school event called the prom.