Master Your Card » Melissa

7 Ways to Stay in Debt Forever

Melissa — Thu, 22 May 2008 00:33:58 +0000

For Dillon Debton, it was love at first sight. He pulled the envelope out of the mailbox and held it up to the gleaming sunlight. His name marched across the front of the envelope in bold black letters and “special offer inside” was scrawled in red script. A special offer for him? His heart leapt as he raced to the house. His trembling fingers opened the envelope to reveal the contents: a letter offering him a $5000 line of credit and a low introductory interest rate for the first six months!

Dillon snatched a pen and filled out the application. He daydreamed of the new possibilities that were opening up to him. With $5000 he could buy snazzy new clothes; he could purchase that high-definition big screen TV; he could even buy tickets to the Barry Manilow concert! He stuffed the application into the postage-paid envelope and sent it on its way.

Dillon watched the mailbox every day until it finally came: his plastic ticket to fun had arrived. Dillon took his beloved plastic everywhere he went. He bought lunch at fancy restaurants and bought gizmos and gadgets. He and his plastic stuck together like a wad of gum sticks to the underside of a school bus seat.

About a month later, Dillon received his first bill. He opened it and laughed out loud as he saw all the things he had bought and the stuff he had done. Now he actually had a life! Man, he thought, the chicks will really dig me now! He would now have a monthly reminder of what a groovy man he had become. He smiled as he looked at the small minimum payment.

Mr. Debton loved his plastic card and he wanted to have it as his constant companion. Dillon took out a piece of paper and made a list of how he could insure his monthly “reminder” of his absolute coolness would continue to make its appearance.

7 Ways to Stay in Debt Forever

1- Use the credit card at every opportunity. After all, he could really rack up some bonus points – maybe he could earn enough for some free french fries or something.

2- Only make the minimum payment. He knew that bill would keep on coming, month after month, if he just paid the minimum payment.

3- Send payments late. At $30 a pop, those late fees could really add up fast!

4- Use the cash advance option – a lot. With a cost of $25 and a 25% interest rate on the money advanced, that balance might not ever go away.

5- Pay by phone. He could get a $10 fee every time he paid by phone.

6- Go over the limit. Another fee! A whopping $39 for going over the limit.

7- QVC, The Shopping Network, late-night infomercials – now you’re talking, baby!

Day by day, month by month, Mr. Debton’s balance grew and grew as his wallet shrank down to almost nothing. Suddenly, he saw the light: his plastic “friend” wasn’t giving him a better quality of life; it was robbing him of it. Suddenly, he didn’t feel the love for the plastic anymore.

Dillon pondered his relationship with his card as he sharpened the large kitchen shears. He really didn’t like how the fun things he had bought with his card had worn out or had broken months ago, yet he would still be paying for them for years and years. His credit limit was maxed and so he couldn’t buy any more fun.

Dillon pulled the plastic out of his wallet and held it for one brief moment before chopping it to bits. He tossed the sad remains into the trash, walked away, and never looked back.

13 Ways to Slash your Gasoline Bill

Melissa — Tue, 20 May 2008 17:22:50 +0000

There’s one thing that’s rising almost daily, and it isn’t your paycheck. It’s the price of gas. Sure, there are non-driving things we can do to save on gas: walk, ride a bike, rollerblade, or ride a unicycle (I’ve seen quite a few students use them at our local college campus.) Unfortunately, much of the time, the distance we need to travel or the amount of traffic involved makes it hard to park the car in favor of more fuel friendly options. Truth is, most of us need to drive. Therefore, we need to make the most of our gas mileage and learn how to save money at the pump.

Here are 13 tips to slash your gasoline bill:

1- Slow down. Okay, I’m a lead foot and there are times that I’m more interested in getting somewhere quick than I am saving gas. However, slowing down can significantly improve your gas mileage. Different types of cars are most efficient at different speeds (the average is about 55mph), but most cars lose gas mileage at speeds over 60mph.

2- Maintain a steady speed. When you drive at inconsistent speeds, you waste a lot of gas. Keep a steady distance from the car ahead of you. Use cruise control whenever possible.

3- Turn off the air conditioning. I know, summer is almost here and we love the comfort of riding in an air-conditioned car. Using the AC can cost an extra 10% to 20% in gasoline. But for some of us, we’re okay with that.

4- Close the windows. Having the windows open at a high speed can cause excess drag on the car. Use the air-ventilating system instead.

5- Lose the excess baggage. Heavy cars use more fuel. Lighten your car up by taking out anything that isn’t necessary, especially if it’s heavy.

6- Avoid excess idling. If you are going to be stopped for more than twenty to thirty seconds, turn the car off.

7- Make your car more aerodynamic. Take off any bike or luggage racks or any other car body accessory when you’re not using it. These can cause drag and lower your gas mileage.

8- Check the tire air pressures frequently. Check your cars owner’s manual for the recommended air pressure for your tires. Keeping your tires inflated properly can help your car achieve a higher gas mileage. Check the pressure weekly when possible.

9- Condense your trips. Try to be efficient in your errand running. Get as much done with the least amount of traveling. Plan your routes in advance to avoid wasting gas and time.

10- Avoid stops and starts. Take the freeway or expressway when possible. Slow down gradually when approaching stoplights. Use a light foot on the gas when accelerating and try to avoid stopping where possible.

11- Try mass transit. Research your city’s mass transit options. The average bus, subway, or commuter train ticket could be less expensive than using your own fuel. It also saves the wear and tear on your vehicle. Many municipalities offer discounted fares for students, seniors, and disabled persons.

12- Use the Internet. Search the web for the lowest gas prices in your area. Many local television and radio station websites provide a link of where you can go to find the cheapest prices at the pump.

13- Get your hands on a good Gas Rebate Card. Assuming you can commit to using it responsibly (in other words, paying it off on time and in full every month), a Gas Rebate credit card can potentially save you thousands of dollars every year. We like the BP Visa Rewards Card because it offers a rebate of up to 10% and doesn’t have an annual fee. Not too shabby, but remember: A Gas Rebate Card is only cost effective if you don’t carry a revolving balance!

How are you slashing your gasoline bill?

7 Tips to Having Quick Meals on a Budget

Melissa — Mon, 19 May 2008 22:59:54 +0000

It seems that even with all our modern-day timesaving gadgets, we are busier than ever! It’s hard to find the time to cook inexpensive meals from scratch. Quick meals often mean a hurried trip through the local drive-thru or buying a meal-in-a-box to pop into the oven or microwave. This can shrink the pocketbook, but unfortunately, not the waistline!

You don’t have to slave away for hours in the kitchen in order to save money on the meal budget. All it takes is a little planning and advance preparation. Here are seven tips:

1- Plan the weekly menu. I find that if I take a little bit of time to plan my menu in advance, I avoid the 5:00 panic of “I don’t know what were going to have for dinner and the kids are starving!” Try and include some of the staple items mentioned below when planning your meals.

2- Have cooked rice on hand. Buy rice in bulk to save money. I really like the taste of brown rice, buy it doesn’t store as well as white rice. Basmati rice has a good glavor and smells like popcorn when it’s cooking. I cook up a lot of rice at once. After the rice is cooled, I divide it into several one-quart freezer bags and store them in the freezer. Whenever I need rice for a meal, I grab the amount of freezer bags that I need and defrost them.

3- Buy dried beans and cook them in advance. I like to buy a variety of dried beans, such as black, red, kidney, and pinto beans. Every so often, I cook up a large batch of beans. I soak them over night before cooking them. (Make sure you pour off the soaking water before adding fresh water.) When the beans are cooled, store in containers and freeze them. You can add beans to soups, stews, casseroles, or burritos. I like to make a mixture of rice and beans, flavor them with taco seasoning, and put them into tacos.

4- Have a variety of chopped vegetables. If you are going to use fresh vegetables, chop them up in advance for your weekly meals. It’s a lot quicker to pull out a baggie or container of chopped veggies for a soup or dish you are going to make, rather than chop the vegetables every single time you need them. It’s also a good idea to have plenty of frozen vegetables on hand. Many times, they are cheaper than the fresh vegetables. Grab a bag of rice, some frozen vegetables, and soy sauce for a quick stir fry meal.

5- Make a weekly salad. I get a large bowl and make enough green salad to last a week. That way, I have one less thing to worry about when I plan my meals. For a dinner idea, make a taco salad. Put tortilla chips on a plate and top with some salad, a seasoned bean and rice mixture, guacamole, and sour cream. It’s quick, easy, and cheap!

6- Cook up lots of hot cereal. Make a big pot of oatmeal or multi-grain cereal. Buying dried cereal grain in bulk is much cheaper and better for you than buying it in the individual packets. When you’re in a mad dash to get out the door in the morning, put some mush (as my kids would call it) in a bowl, pop it in the microwave and enjoy!

7- Cook our meats in advance. To keep the meal inexpensive, use the meat sparingly instead of as the main course. A sirloin steak costs more for a meal than making spaghetti and meatballs. That being said, cook up all the meat you will need for your weekly meals in advance. Brown hamburger and store it in containers or freezer bags. Instead of buying expensive boneless chicken, buy a roasting chicken, cook it up, and take the meat off the bones. Store it in the fridge or freezer until you are ready for it. For quick meal ideas, toss some cooked hamburger into a pot of spaghetti or use it in a beef stroganoff dish. Use your cooked chicken in soups, stir frys, or make it into a casserole.

You can have quick meals that are inexpensive. It just takes a little planning and prep time; and it sure beats wasting money at the local fast food joint!

What are some ways that you save money on the food budget?

7 Ways to Destroy your Credit Rating

Melissa — Mon, 19 May 2008 10:34:15 +0000

Bill and Sharon Smith recently tied the knot in wedded bliss. They adored their little studio apartment in the middle of town…for about one week. The next-door neighbors partied – a lot. Cars honked their horns at all hours of the night. The landlord liked to raise the rent. It was time for a change.

The Smiths decided they would like to look into purchasing their own home in a smaller town. They spent a lot of time looking through Homes For Sale catalogs. They drove through promising neighborhoods and went to open houses. They spent every weekend looking for the perfect house.

One bright summer morning after several months of searching, they found the perfect house: a cute two-bedroom bungalow nestled in a grove of trees on two acres of land. It was a for-sale-by-owner and the price seemed reasonable. The Smiths fell in love.

Bill and Sharon promptly went in to speak with Jim, the loan officer. They had spent so much time house hunting that they hadn’t given much thought to pre-qualifying for a loan. The Smiths sat down and showed Jim a flyer describing the charming details of the home. They eagerly waited while the Jim pulled up a credit report. After what seemed like an eternity, Jim shook his head and handed the flyer back to the Smiths. Bill and Sharon’s FICO score was low. It would be very difficult for them to get a loan; and even if they could get a loan, the Smiths would be paying thousands of dollars in extra fees and an interest rate so high that Bill and Sharon would have difficulty making the house payments.

After Jim had sat down with the Smiths and showed them how they had ruined their credit rating, the heartbroken Smiths drove back to their tiny studio apartment in the middle of town. They were stuck without many options. Don’t make the same mistakes they did.

7 Ways to Destroy your Credit Rating

1- Make late payments. Payment history makes up a big part of your FICO score. Making late payments could drop your credit rating by 100 points and it takes a lot of effort to bring that score back up.

2- Keep high balances. If you keep your credit card balances close to their limits, it lowers your FICO score. This also means that it isn’t a good idea for you to consolodate your bills onto one credit card. Try to keep your balances under 35% of the credit limit.

3- Declare bankruptcy. A bad credit report can stay on your credit history for seven years. Lenders want to see that you are financially responsible and will pay the loan back.

4- Open a lot of store credit cards. Lenders get nervous if they see you have many open lines of credit.

5- Close down credit cards. This can actually lower your score, especially if you close down an account that you’ve had for a long time.

6- Don’t have any credit cards. You may think it is a wise idea to avoid credit cards all together, but lenders want to see that you are able to make timely payments and that you are responsible. It’s important to build up a positive credit history.

7- Don’t check your credit report yearly. Request a free credit report from one of the three major credit reporting bureaus and check for errors or fraudulent activity. The three major agencies are: Equifax, TransUnion, and Experian. If you want to be extra sure of your credit, request one from all three. www.annualcreditreport.com is the authorized website to request a free report from each bureau. The credit report is free, however, you will need to pay a small fee to get your FICO score.

Need a Holiday? Try House Swapping!

Melissa — Fri, 16 May 2008 11:42:27 +0000

Want to take a vacation, but the funds are too tight? Try house swapping! There are several variations of house swapping, but the main idea is that two parties agree to swap houses for a vacation. Besides the massive savings of not having to rent a hotel room, many times a swap includes the use of the family car and appliances. This means you can save even more money by not having to rent a car or go to a laundry mat.

So how does this work?

There are websites designed for house swapping. A good one to try is Homelink.org. For a $110 fee, you can advertise your home, with photos, in a directory and on the websites for twelve months. This membership gives you access to the member-only WebPages. For an extra $60 you can receive a print directory of the available homes available. Intervac.com is another good site to try.

Members of a house swapping, or house exchanging, site look through the prospects until they find one they are interested in. Contact is usually made through email. Then, the prospective swappers decide if they would like to do an exchange. Your chances for finding a decent swap are higher if you live in a popular area. If you live in a nondescript town in the middle of nowhere, find all the positives you can about your area to make it more desirable for a swap: What makes your town unique? Is there an interesting festival or event in your area? Are there recreational activities within a short drive? Do you have a great house to offer? House exchanges can be for any agreed-upon amount of time, but typically last about two-to-four weeks.

Sounds great: Free lodging, free car rental, and I can do my own laundry – (wait, is that a plus?)

So, what’s the catch?

Remember, it’s a house swap so while you’re enjoying the comforts and amenities of someone else’s home, strangers may be sitting in your favorite Lazy-Boy enjoying the game on your big screen television and using your – ahem – lavatory. However, the upside is that having someone living in your house while you’re away is that your house isn’t left vacant, which can attract burglars. With a little extra negotiating, you might even be able to have your fellow house swappers water your plants or feed your animals.

Experience your vacation destination as a local

A bonus of house swapping as opposed to getting a room in a hotel is that you can live like a local. When you lodge in a hotel, you’re usually surrounded by the “tourist traps”. On the other hand, living in someone else’s house might put you in contact with different experiences, such as meeting the local people discovering their favorite hangouts.

Is it safe?

You might worry about a stranger rifling through your belongings or doing damage to your property. Fortunately, reports of such activity have been rare. Most complaints seem to center around housekeeping issues. You always want to have your house spotless for your guests, and you’ll want to leave your vacation house in top-shape for when the owners return. You’ll also want to lock up any valuables for safekeeping while you’re away. You and your fellow swappers will want to sign an agreement to work out the details: What is included in the swap and who’ll pay for incidentals, such as long-distance phone calls and use of food items.

House Swapping: A great way to vacation!

Have you had your eyes on traveling to see the castles in Europe or the Hawaiian volcanoes, but thought it would be too expensive? Try house swapping; you’ll save a lot of money – and have a great experience.

Arm your Children with Financial Knowledge

Melissa — Thu, 15 May 2008 12:49:19 +0000

There’s a saying that goes, “It’s not how much you make, it’s how much you keep.” My kids are pretty creative when it comes to making money – they have the entrepreneurial American spirit. However, I would like them to learn how to keep their money – or better yet – how to make the money they make grow.

In today’s world, there’s not a whole lot of teaching about how to keep money. We are surrounded by advertisements enticing us to buy the latest and greatest gizmos. Kids are often the most targeted. Think about it: Companies know that teens have jobs and they don’t yet have the financial responsibilities of an adult. They have money to spend- and if you’ve spent any time at a shopping mall, you see the results of that advertising: teens with armloads of shopping bags. Lured. Baited. Caught. Trapped.

So much stuff to buy

The “keep up with the Jones’s” attitude is usually attributed to adults, but think of what children face each day. Your son goes to baseball practice and Gerald Gymsocks shows up with a new professional series mitt. The next day, half the team has a new mitt and a few of the kids even have expensive new cleats. Your son misses a catch and claims that if he only had “that new mitt”, or “if he wasn’t wearing those crummy old cleats” he wouldn’t have missed the ball. He might even get teased – and it doesn’t end there.

There is so much stuff that kids want to buy: cell phones, iPods, gaming systems, expensive name brand clothing, and as they get older, cars. We need to teach our children the importance of being satisfied with what they have so they can save for the future. If we don’t, they will get caught up in the “keep up with the Jones’s – kid version” and will want to spend every cent they get. If our children are armed with financial knowledge, they will be better prepared to withstand peer pressure – and might even start to feel sorry for their friends who are caught up in spending all their money on “stuff.”

The power of compound interest

Teach your children about the power of compound interest to help them understand the importance of saving early. The earlier children learn how to use this powerful tool, the more it can work in their favor. For instance, if thirteen-year-old Sally Savesalot puts $5,000 into a savings plan that earns her 8% interest, in twenty-years, that $5,000 will have grown to $23,305 – without putting in another penny! If the account stays at 8%, by the time Sally is sixty-five, that $5,000 will be worth $234, 508!

On the other hand, Patty Procrastinator doesn’t contribute to a savings account until she is twenty-six-years-old. Patty earns $5,000 for winning a Spam-eating contest and puts the money into an account at 8%, and leaves it there until she is sixty-five-years-old. When she is ready to withdraw the money, it has grown to $100,576 – which is a lot of money. However, Sally had earned more than double that amount with the same initial investment! If children can learn and understand the advantages of saving early – they can have the power of compound interest on their side.

Children also need to understand the other side of compound interest. I frequently make offhand comments to my kids when I see advertisements for “buy now, pay later.” I always have to add, “Yes, you can have it now, but it will take you forever to pay it off, and you’ll end up paying at least double or triple the amount.” My kids have heard me say it plenty – and I don’t think they will ever want to buy now, pay later.

Financial knowledge early equals more financial security in the future

Sure, our kids will still want to buy those cool gizmos and gadgets every once in awhile – but they will also know that gizmos and gadgets break, go out of style, or wear out. If our children are armed with financial knowledge, they will be less tempted to buy stuff. They will be motivated to invest their money in order to secure a better financial future.

Teach your Children about Finances Part – II

Melissa — Thu, 15 May 2008 00:20:37 +0000

Children and teens need more financial savvy as they get older. They start earning more money and they have more expenses. They are also ready for more depth in their financial education. While it’s important to teach your children about finances, it’s also important to let them make a lot of their own decisions (within reason) about money. Experience is a great teacher!

1- Help your child set some goals. Discuss with your child some financial goals and write them down. Post his goals in a place where he can refer to it often. If your child has goals to work toward, he is less likely to squander his money away on consumables.

2- Help your child budget. Get some sort of notebook or bill book to keep track of expenses. My oldest son has a composition notebook that he uses to write things down. Each month, he writes down all the expenses for the month. He also writes down his earnings and he figures out where to allocate his money. Any extra money goes into a savings account.

You could also have your child save receipts to help track spending. It can be a real eye opener to really see how much money went toward buying soda and potato chips!

3- Read and discuss good books on money. There are lots of wonderful books about money. Give a list of book options to your child and let him pick one to read. Plan a date to discuss the book (you will need to read it too!) I like to take my child out for an ice cream cone or for a walk in the park while we discuss the book. Ask your child what he liked or didn’t like about the book. What did he learn? Did he agree with what the author had to say? Try and pick a new book to read each month.

Here are some of my family’s favorites:

Rich Dad, Poor Dad for Teens
The One Minute Millionaire
Growing Money
The Kids Business Book
If you want to be Rich and Happy, Don’t go to School

4- Play games together. Games are a fun way to learn about money. My kids especially like playing Monopoly. Robert Kiyosaki’s Cashflow for Kids is another good one to play.

5- Let them pay for more of their expenses. Kids learn best by doing. Let your children pay for some of their expenses. Once kids are in charge of paying for their own things, they learn how to be frugal in a hurry!

6- Teach your kids about investing. Let your children do some research on different types of savings accounts. Take them to a bank or credit union to discuss some different options with a financial advisor. Teach your kids about the Stock Market and let them do some research on different companies.

I recently found a simulation game online called The Stock Market Game designed to teach children to learn about investing. Kids are grouped into teams and they “invest” play money on real stocks. See if your child’s school would be interested in participating in the next simulation scheduled for October 2008.

http://www.stockmarketgame.org/index.html

As you teach your children about money, you will find that you have more financial savvy yourself.

7 Ways to Squash your Credit Card Debt

Melissa — Wed, 14 May 2008 12:19:04 +0000

Freedom. It’s a wonderful feeling making the final credit card payment. Unfortunately, the way credit card payments are set up it takes a long, long time to pay off debt – longer than you might think. The credit card companies want their customers to pay interest as long as possible. Payments are determined by a percentage of the balance; as the balance goes down, so does your payment. While this might seem like a good thing for your monthly budget, it makes it hard to get your card paid off. Credit card companies like it that way.

Many credit cards require a minimum payment of 2% of the remaining balance. If you have just one credit card with a balance of $2,000 at 18 % and you only pay the 2% minimum balance, it will take you about thirty years to pay off and you will pay over $5,000 in interest! That should be enough to get you motivated to Squash your Credit Card Debt!

Rule: Always pay more than the minimum payment. Any extra money you pay on your credit card bill will go directly toward your balance, instead of the interest.

But I can barely afford the minimum payment. How can I afford to pay more?

Let’s talk about some ways to get rid of the old ball and chain: your debt.

1- Use your Stimulus check. Put as much as you can toward your debt. Since interest is calculated on the balance, paying a chunk of your debt off quickly will lessen the amount of interest you pay.

2- Sell your stuff. Go through your house and gather up anything you’re not using anymore and have a yard sale. This can generate some quick cash for a good payment.

3- Shrink your entertainment budget. Look for cheap or free dates and family outings. Try free community concerts, picnics at the park, watching the sunset, or just taking a walk.

4- Cut down on treats. Estimate how much money you spend on treats in a given week. Get that money out in cash each week until your next credit card bill comes due. Then put that money into the bank and put it toward your next payment.

5- Drive less. Condense your driving into fewer trips where possible. Sit down at the beginning of the week and plan what errands you will need to accomplish. If possible, have one day where you take care of your errands. Don’t go to the grocery store more than once a week. This will save on gas, and on groceries.

6- Keep to the basics. You probably need less than you think. Think of the basics: Food, clothing, shelter, medical, and necessary school or work expenses. If you’re tempted to buy something that doesn’t fall into one of those categories, don’t do it. Every thing you don’t buy equals more money to put toward your debt. If it’s not absolutely necessary, wait.

7- Cook from scratch. With the cost of groceries skyrocketing, it pays to cook from scratch. Buy things you use often in bulk to save money.

It’s worth the sacrifice to put extra money toward your credit card debt. When that final bill comes due, and after you make the very last payment, take a deep breath. Freedom.

Six Ways your Kids can Help out with the Budget!

Melissa — Mon, 12 May 2008 17:30:19 +0000

Is the rising price of food and gas wrecking havoc with your monthly budget? Put your kids to work – after all, you use the gas to take them to soccer practice and they eat the food that you buy for the pantry. I’m not talking about having your five-year-old flipping burgers for eight hours a day (there are laws against such things, you know.) There are things that kids can do to make a difference in the monthly budget. Heck, even if your family is rolling in dough, it doesn’t hurt to have your kids do their part to help with expenses – it’s good practice for when they’re adults.

1- Let kids start paying for their “stuff”. If you’re at the grocery store and Junior begs you to buy him a lollipop, tell him that he is now in charge of buying his treats and toys. Make sure you also do plenty of teaching about the value of money and savings, but let Junior buy some of his own things.

As Junior gets older and starts earning more money, let him pay for more of his expenses. My oldest son has a cell phone and I don’t pay one penny of his bill. Let me tell you, he is real careful not to go over on minutes and his careful not to download too many extras – well, he doesn’t anymore. One month of paying $0.45 per minute because he exceeded his airtime minutes was enough to keep him careful about such things.

Kids can help pay for their own clothing. Parents don’t need to fork out $75 for designer jeans. You can give your child a set frugal amount of money for their clothing budget. If they want to spend money on expensive name-brand clothes, let them make up the difference.

2- Teach them to cook from scratch. In our busy lives, it’s all too easy to grab dinner at the fast food drive-thru. Convenience foods fill our shopping carts because, well, they’re convenient. Not only are fast foods and meals-in-a-box expensive, they are bad for our health.

It takes time to prepare healthy meals from scratch. This is where you can put your kids to work. Take some time to teach them how to make meals. My thirteen-year-old daughter is the bread maker of the family. This has saved us a lot of money. She makes five loaves at a time and we freeze any that we aren’t going to use right away.

Have your child wash and chop enough vegetables for the week. That way, you have vegetables ready for whenever you need them. Even the youngest child can help out. My two youngest children like to wash the lettuce in our salad spinner for our dinner salads. I have a friend that assigns each of her five children a day of the week to fix dinner. They plan what they will make in advance and then do all the cooking.

3- Assign your child to be on Utilities Patrol. Teach your child the importance of conservation. Let him look at the utility bills and ask him for suggestions for ways to lower the usage for the following month. Make it a game to see how much you can lower your utility bills. Play board games or read in the evening instead of watching television to help cut back on electricity. See who can get clean while taking the shortest shower to help save on the water bill.

4- Give your child a garden to take care of. Food is expensive these days, and a lot of the time, the quality isn’t very good. Let your children help plant and take care of a garden. If you have a big garden, maybe your children can each have their own rows or sections to take care of. I like to have raised garden beds. They’re easier for me to take care of and I don’t get as many weeds. It’s a great experience for a child to have his own garden box. Let them plan what vegetables to plant and show him how to take care of them. Growing vegetables is a great way for children to help with the family budget.

5- Let them come up with ways to save on gasoline. Brainstorm with your children about ways to save on gasoline. Could you consolidate trips? What about carpooling with friends? What about (gasp) walking? I saw some pictures recently of families traveling by large bikes in India. Some bikes had large baskets or carts attached to them for hauling the entire family. I got to thinking that having one of these family bikes wouldn’t be such a bad idea!

6- Have a family council. Sit down as a family and let your kids see how a budget works. Get the bills out so they can see how much money it takes to run a household. When it comes to miscellaneous expenses, get your children’s input. As parents, you have the final say, but kids usually come up with some great ideas. Tell them you have “X” dollars for the monthly entertainment budget and get their ideas on how to make the most of it.

There are many things that kids can do to help with the family budget and they will learn valuable life skills in the process. So, go ahead – put your kids to work!

5 Ways to Teach Little Tykes About Finances

Melissa — Fri, 09 May 2008 22:16:41 +0000

It’s important to teach children about money from the time they start earning their first pennies. Kids might learn about money from a textbook at school or they might learn with “play” money, but they also need to have experience with real money in the real world. Kids are curious about money. My six-year-old loves to collect pennies and put them in a jar to see how many he can accumulate. Children learn early that if they get a certain amount, they can start buying things.

Here are some ways to help your little tyke learn about money:

1- Teach children the value of money. Put a pile of coins on the dining room table. Start with pennies and teach your child that each penny equals one cent. Then move on to nickels. Put five pennies next to a nickel and tell your child that it takes five pennies to equal one nickel. Then do the same with other coins: five nickels equal a quarter, but so do two dimes and a nickel. I can also use twenty-five pennies.

2- Give them a place to put it. It’s nice for kids to be able to see where their money is going and to visually watch it grow. My youngest kids have a three-section savings box for their money. Each section has a specific purpose: one for savings, one for spending, and one for tithing. When my kids earn money, I help them put their coins and dollars in the right section. When they have a certain amount in their savings section, it goes into a savings account at the bank.

3- Teach kids that work equals money. Let kids find different ways to earn money. I remember being only about seven or eight-years-old and crushing up rose petals to make perfume. I think I may have even used my mom’s blender for that purpose (sorry, mom.) I went door-to-door selling my fragrant perfume to the neighbors. My business venture didn’t make me a millionaire, but I learned a little about creating a business, marketing, and how to budget all those quarters that I earned.

4- Let them pay for things. As parents, we provide the necessities: food, clothing, shelter, and educational necessities. There’s no parental contract that says that we need to ~~bribe~~ provide our children with the coolest toy of the week. If your kids really want something, let them buy it with their own hard-earned money. They’ll probably take better care of their toy too.

5- Allow them to make mistakes. It’s painful to watch children make mistakes – especially when it’s so easy for parents to step in and prevent pain and tears. Think of it this way: It’s much easier if a child learns from their mistakes while they’re young. If a seven-year-old decides to squander away his money on Dum Dum suckers and doesn’t have enough to go to the movie with his best friend – he’s learned that he should budget his money a little more carefully next time. If someone foolishly spends his money when he’s older and living on his own, he may have to skimp on the food budget, gas allowances, or even rent money.

Discuss money on a regular basis with your child. Help your kids make goals and learn how to save. I know of some parents who will match any dollar amount of money that their children put into savings. If we start teaching our little tykes early about money smarts, they will have a great head start on their future.