Budgeting is Fun for Everyone!

Budgeting is such an important part of our livelihood.  There are so many great methods for budgeting and it takes time to find one that fits you.  As I mentioned in my 2nd post, I grew up with a mom who worked for many years as a credit card counselor and is now a certified financial planner.  I have had most of my life to perfect a method that works for me. 

Over the next few blogs I'd like to share a few things that I remember from my childhood as well as a few techniques I use now.  Although my methods may not work the same for you, I hope that if you don't already have a budget plan, you are able to take away a few good ideas.

Today I would like to write about some things I remember from my childhood.  These can be used with a child's allowance, for money they earn mowing lawns or even when they are old enough to get a part-time job.

Growing up I was an avid baseball fan.  I collected tons of baseball cards and spent a lot of time watching Baseball Tonight on ESPN.  Of course when the Ken Griffey Jr. baseball game came out on Super Nintendo, I just HAD to have it.  Although I received an allowance I did not have enough saved to buy the game when it came out.  Mom agreed to "loan" me the money.  She wrote up a contract that stated I would pay her a certain portion of my paycheck each week for X number of weeks until the money was paid back in full.  I had to sign the contract and over the next few months I had my first experience paying off a debt.  I think this is such a great technique for kids!  Understanding the process of how a loan works as well as the fact that by taking out a loan you will have to live on less money until the loan is paid back.

Another method I used growing up was the envelope system.  For those of you who have read Dave Ramsey, you understand this concept.  This is a great method for kids to learn at an early age.  Later I will talk to you about how my "envelope" method has evolved, but when I started, I truly began with envelopes.  For children, you can develop envelopes based on their spending habits.  Obviously they don't have the types of expenses we do but some envelopes could be devoted to entertainment (things like movies, or trips to get ice cream, etc), clothes (in the event they want to buy something outside of a time that you have plans to buy them clothes), giving (to church or charities), or it could be for something specific that they have as a hobby (such as baseball card collecting, painting, etc). 

Though giving is something we may often overlook for a child, it is really important that children understand at an early age the importance of giving back to others.  I would encourage you to make a special point of sitting down with your child to discuss this with them.

Saving is also a very important habit for children to learn at an early age.  I would pick a set amount for them to place into a savings account and make sure they do this on a consistent basis.  I had my first savings account by the 4th grade.  It is never too early for your child to start one on their own!

The envelope method can work as such: Let's say your child is earning an allowance of $10 per week.  The envelope categories they have are giving, entertainment and baseball card collecting.  You decide with your child how much money they should put towards each.  The breakdown could be $2 to giving, $3 to entertainment and $3 to baseball card collecting, and $2 towards savings (or whatever you decide is best).  When you make a trip to Walmart and your child decides they want to buy a package of baseball cards, you have them pull out their envelope labeled baseball cards.  Once the money is gone, they will need to wait until they receive their next allowance to spend money on any more baseball cards.

Read more about the envelope method here.

Developing healthy spending habits early can make all the difference in the world and will set your children up for success!

As the Deer

I am so blessed to live in a neighborhood where deer can be found roaming at any time.  While on my way to work this morning I noticed a car stopped in the middle of the road.  This usually means that a deer is getting ready to cross the road so I of course stopped as well.  I then noticed 5 little baby deer eating grass on the side of the road and so we waited as each one took its time crossing. 

Even though this is a common occurrence, it never ceases to amaze me!  It always makes me think of one of my favorite church songs which is taken from Psalm 42:1, "As the deer pants for streams of water, so my soul pants for you, O God."

As the deer panteth for the water,
So my soul longs after you.
You alone are my hearts desire,
And I long to worship You.

You alone are my strength, my shield;
To You alone may my spirit yield.
You alone are my hearts desire,
and I long to worship You.