Teaching Kids about money, budgeting, paying bills....

Teaching kids about healthy financial habits can be daunting when you are still struggling with healthy habits yourself. It doesn't have to be daunting though, discussing some of those hard issues in terms that they can understand can be healthy. It's sort of like saying "look see mom/dad made some mistakes, we all do, and we are working on fixing them" and then explaining how people fix their financial mistakes.

All of that being said I have an older daughter she is *almost* a teenager *yikes*, at 12 she gets a lot more than she did at say 3. She sees and hears me talking about budget and bills often. A few weeks ago she asked me about how a budget works and "how do you pay your bills?" I was surprised by this. She has always been a fairly observant child. Her father and I are not together, he is no better with money than I used to be he just had lots more of it than I did to spend. Our daughter has never really seen a good example of saving, spending, and paying bills... until now.

Mint.com has a really great blog/article about teaching kids budgets, I encourage you all to read it. In fact Mint.com is a really great (and free even!) website to check out and familiarize yourselves with. I think for my child though going more in depth is what she is asking for.

With my daughter's needs/wants to learn personal finance and budgeting this week we are starting something new. I will give her an allowance for time she has worked over and above family chores that everyone does, she will work with me to create a budget on saving to spend on a goal, savings for college, and spending money. I will take her to the bank and help her learn to fill out deposit slips (and when the time comes withdraw slips) and how to balance her savings accounts and keep track of what money is for what things. I am also going to show her my pay, where things go to, where they come out and how much is left at the end of the month/day/week... Not all kids can handle that I don't think nor should they, my child seems to have a need/want for that to understand. This need/want stems a bit from how she learns anything new and her abilities to really take the information in.

Most of all, I want my child to have a better understanding of personal finance than I did so when she makes mistakes she knows how to correct them. I was never taught anything about budgeting, making money, paying bills, writing checks, or balancing a check book. Nothing at all, I was thrown into it and failed miserably, I'm working at teaching myself now but I'd like for my daughter to know better. Whether she makes the right choices by having the right knowledge is totally up to her. I can instill the right things and educate her with the knowledge and then it is in her hands on how she applies all of those things.

Photo By: Matt McGee

Banking for me versus a cash system

I'm not good at this banking thing, I'm especially not so great at the balancing thing.

I tried to make things simple 3 accounts

Savings/Overdraft protection
Checking for bills
Checking for spending/necessities (grocery shopping, gas, some variable bills)

I didn't do so hot, but I got back on the horse and tried again, only I did it again.

With that said. I'm keeping 2 accounts the savings/overdraft protection account and one checking account. I'm getting rid of the debit cards (although for the bill paying account I will keep the number to pay over the phone if I need to, just not the card). The other account I'm getting rid of and I'm going to a cash/envelope system.

I'm also going to start tracking my spending here on the blog.

I'm not sure where I am going wrong. I tracked my spending before and I was surprised with how much money I was spending in places like the gas station buying 'extras' and the likes.

I know one thing is I don't have a set grocery budget, I'm not quite sure how to create one... I just buy some weeks only what we really need to get by and some weeks when sales are great and I actually have the cash I stock up on expensive items. I know this is one of my big budget busters so maybe if I just buckle down with a cash only system I can get this done and get on a good track.

I'm really trying not to get frustrated or down about this, in the past by now I'd have totally given up. I'm going to keep getting back on this PF horse and keep riding hoping I fall less and less as time goes by.

I'm also toying with getting rid of everything but the savings and getting money orders each week when I get paid for bills then putting those together to mail off payment.

WWYD Wedensday: Retirement Investments vs. Debt

In light of most people who had significant investments for retirement losing a good portion of them this year, I thought this would be a good topic to discuss this week.

I read a short article at Comcast Finance about borrowing from your 401k or 403b to pay off debt. I once did this since it was considered a hardship and I lost the job where I was contributing to it I didn't have to pay it back. However it didn't come without steep tax penalties and I only took about something to the tune of $1200 at the time.

Currently, I have no retirement investments (yes, I know I need to). So it really isn't an option for me but it is for many out there who may have enough left after losing portions of it during the credit crisis etc...

But should you? Should you borrow against your retirement to pay off debt? Should you borrow from your future to save the present?

Personally, I say no, at least not in most situations.

What do you think? Would you borrow from your retirement if you were in hot water financially? How much is too much borrowing if you would use retirement to do so? What would be the circumstances you would borrow from retirement?

Photo By: Juan Marketing

Feeling discouraged, and car repairs

So I started my savings, I haven't been able to add much more to it and now I'm going to have to take from it.

My car (as usual when I get to this point) has taken a turn and is in need of repairs.

So far it needs:

• Rotors and brakes
• Power Steering Pump
• New hose for windshield washer solvent
• New Gasket for oil pan and trans pan both fluids are leaking

It wants:

• Front end work that can wait
• Rust prevention
• The remote start I got as a gift installed
• Whatever leaks badly when it rains so I get a soaking floor on the front passenger side

I still owe on this car so it isn't really feasible to look at other vehicles. The car is 7 years old. I hate the car. However, it has a lot of money sunk into it already. I bought a lemon I think from my mother at blue book value at that. Never buy from family, EVER!

As luck would have it, I only have to buy the parts and give my boyfriend's BIL a few bucks to work on it. It is still depressing, this car has had a lot of work done to it.

I've been discouraged about this and so I haven't posted. I am trying not to go back to my old stick your head in the sad ways so I'm posting here.

Photo By: dididam

What I'm doing wrong... or it takes 30 days to make a habit!

There are several things I know I'm doing wrong and why I've always had financial crisis. Its not that I'm totally frivolous but that I do indeed have a limited income. Although, I do make enough money to make it and have some savings. So what am I doing wrong?

I know I get caught up in the save a little here and there theme of frugality and it does save, but it frustrates me and I quit. Mostly, what I'm doing wrong Sisterly Savings spoke about in her post today Organized Bill Paying. I know I'm not organized at all it is part of my ADD I spoke about in my initial post.

My first goal is to get organized to kick that off I'm going to organize my finances this week by creating a new budget. I have opened a new bank account that has two checking accounts. One has certain features which were appealing and the other has other features I found appealing. I am also going to open an ING Direct account and will have my savings at the credit union for my loan payment. Oye! Just posting the amount of accounts to keep track of has me in a panic. Never fear though, that is the best way for me to stay organized. Sounds backwards doesn't it? Well each account will be for something different. If I mix my bill money in with my emergency fund I WILL spend the emergency fund because I'm not organized enough to not do it. I must organize myself in a way that will be effective for me.

I already have one of the spiral books to hold bills in it that Sisterly Savings speaks about in her post, the problem is I have never actually used it. So that is on my agenda for my budget and financial organization plan. I am also going to make a plan for some of my wants and needs. I'm not ready to post about those quite yet because the plan isn't ready by a long shot.

My newest motto is it takes 30 days to make it a habit. I need to start making healthy financial habits, I have identified my biggest problem which is the organization now I must tackle the issue.

My next step will be to organize my home, in small steps. Big steps overwhelm me so small steps are the way to go a project every weekend is good even if it is just one cupboard or two eventually the kitchen will be organized in an efficient manner.

What are some of the best ways you organize?
Do you have a financial system that works for you? Feel free to share.