There are things we didn't know going into this workshop, and I feel more on top of these things now that we know.
The Benefits of Using a separate account/debit card for Vacations:
- You can open a separate account specifically for a vacation, and only take the debit card for that account with you. This is a secure way of knowing that (1. If your wallet or purse gets lost or stolen, no one will be able to get to your main account, and 2. You will be able to stay within your budget better, by only having to keep track of your vacation funds, and not everything else your main account holds. )
The Benefits of Using a separate account/debit card for (EFT) Electronic Fund Transfers.
- You can open a separate account specifically for EFT withdrawals. If you want to make monthly payments to your credit card company, or to another lender using EFT, you are placing all your trust with that lender that they will (1. Take out only the amount you specified; 2. They will take it out on the day you specified; and 3. If you don't have the exact funds to cover it on the exact day on a following month, and call to change the date, they cannot have access to all your other money that is allotted to other bills.)
Create an Emergency Fund:
- The older members of the family should have an emergency fund. Keep in a savings account $1,000 per adult person; and $300-$500 per high school student. Children under high school age should not need an emergency fund.
Teaching Children to be Financially Responsible:
- Teach your children to give at least 10% of what they earn or receive as a gift.
- Teach you children to save at least 50% of what they earn or receive as a gift.
- Let them spend 40% of what they earn or receive as a gift.
The earlier you can start this routine with your children the better. It is much harder for me to convince my 15 year old that he should save 50%, and give 10% of his money, than it is with my 6 and 4 year olds. With them, we usually have them save all their money, and get money out of their piggy banks to give, when they ask. We usually hand money to them for offering at church. I had originally thought that this was a good idea, until the speaker at the conference made these very good points:
- He said that it is important for children to give of their own money (even a few pennies) so they can reap the rewarding feeling of giving. They feel nothing, if money is given to them to put in a plate or pouch that is passed.
- He also said that it is important for children to learn to save for something. He said to start out by having them save for something small, like a toy. Something that won't take very long to save for. Next, have the child pick a somewhat larger item to save for, and then larger, and so on. Telling a 3 year old that they are saving their money for college, makes no sense to them, and therefore means nothing to them. The same with a car. Having a small child save their money for a car is just as ridiculous. The time seems insurmountable, and therefore provides little relevance when it comes to teaching to save.
Chores and Allowance
First of all, he said not to call the money that a child earns for doing chores, allowance. He said to call it commission. When we call it allowance, we are conveying the message that we are allowing them to receive money for work that is done. Commission is based on extra work that is done above and beyond what is expected by living in the home. Children should not be paid to clean their room, put away their clothes or toys, make their bed, set the table, etc... These should be done for free because they live there, and are part of the family. Commission should be paid for things like mowing the lawn, picking up sticks out of the yard, raking the yard, helping mom clean, etc... These things should not be listed on a regular chore list, and should be paid at the time the child completes the task. It is the parents job to think of opportunities in which they can provide work for commission, for their children. A rule of thumb... rate their commission upon how old they are. Approx. $1 for every year of the child is recommended. However, don't feel slighted to pay less if the child only does part of the job, or if your income doesn't allow you to pay that much. Explain to your children ahead of time, that you are a family, and your income does not allow you to pay them as much as they might want to receive. Explain to your children if you are in a financial hardship, and therefore won't be getting as much in commission for that time being. Your child will understand, as well as, teach them valuable lessons for the future.
Some Information for High Schoolers/and Adults...
- Look on-line for scholarships, before entering college. There are millions of dollars in scholarship money that goes unused every year, so apply, apply, apply! There is a scholarship for just about anything.
- Don't ever get a student loan. Work your way through college, and put most of your money toward your college tuition. Or find a job that will pay your way through college. UPS pays 100% for their employees to go to college. Many other places do too.
- Don't ever go to an ATM machine. More debt problems arise each year because of ATM usage. People forget to write things down, and are apt to be more impulsive.
- Don't use credit cards! Just about anything can be done with a debit card these days. It's more secure, and it's a way to keep you from getting out-of-control with your spending.
Thanks for reading, and bearing through all the boring stuff. I thought it was valuable information that I didn't know, and felt that I should share. God Bless!