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Helping Your Child to Budget Effectively

 

budgetOne of the daunting feelings that come with parenting teens is the sense that they are reaching a point where they don’t need you anymore. Yet, while they may be acquiring independence on many levels, a worrying number still don’t know how to budget. Teaching them this is one of the last great gifts you can give. It will help them avoid financial disasters, set them up for a more successful life, and help to protect your own finances by ensuring you don’t have to keep bailing them out.

Set an example

As with so many other things, the first way a child begins to learn about budgeting is by watching you. Make sure there are lots of opportunities for this. It can be as simple as taking your kids to the supermarket and putting them in charge of working out which products offer the best value. Look at receipts with them and discuss what was a bargain and what wasn’t. If you’re thinking of buying a larger household item, ask them to search on the Internet for good deals and then discuss what they find. Make sure they’re present when family budgets are being drawn up, and ask them for suggestions. Children are always more interested in learning when they can see that it’s empowering.

Provide an allowance

Kids need to learn how to manage money before their lives depend on it, so provide them with an allowance. Initially this can just be a small amount of money for sweets or comics, with the lesson being that spending it all at once means no treats later in the week. As they get older, shift the allowance to a monthly pattern (so it resembles a paycheck) and make them responsible for more and more of their own things, such as buying clothes, sports gear, music and gas.

An allowance system only works if it has a hard limit. Don’t be tempted to bail your kids out if they mismanage it, no matter how much they beg. After all, it’s better for them to be miserable about missing out on a band they want to see now than it is for them to be unable to pay for food when they get to college.

Discuss college outgoings

One of the reasons young people often get into financial difficulty when first at college is that they’re not aware of all the things a budget needs to cover. Before they leave, go over this with them and draw up a ledger that outlines the most important concerns (reflecting what’s important to them as well as to you). If you didn’t go to college, bear in mind that money will be needed for things like books as well as living costs. Make sure your figures are up to date.

Look to the long term

A kid going to college provides a good opportunity to talk about long-term financial issues and the importance of choosing a major that will lead to a good career. This doesn’t necessarily mean aiming for the most lucrative careers because it’s about balancing something realistic with something your child will enjoy enough to stick at. If your child wants to pursue a direction with no clear career path, discuss the importance of making practical plans and being able to take care of things like health insurance. Make sure it’s understood that you won’t always be around to help.

Emergency options

If the worst comes to the worst and, despite all your efforts, your child runs out of money at college, remember that you can always use a service like Trans-Fast remittance to transfer emergency funds at speed. Sometimes teenagers are hit by expenses no one could have predicted and they shouldn’t have to suffer for that. If they’ve simply been careless, make it clear that the money is a loan.

parenting, Wednesdays parent

Wednesday’s Parent: A Crash Course in Money Management

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money managementBudget? For teenagers. Why on earth would they possibly need to learn to budget? Their every need is met: food, shelter, clothing and for most entertainment. The baby boomer generation has made sure that our kids want for nothing and their every need is met immediately. What is wrong with this picture? Simple. We’re raising a generation of children who end up drowning in debt as adults.

Before you send your child off to college and expect them to understand how to budget and not abuse credit, it’s time to give them a crash course in money management.

Money 101-The difference between wants and needs

This is the foundation upon which every other lesson is built upon. We all say it, especially our kids: I need (fill in the blank). But is it a need, or a want. Most of the time, it’s a want. And if it’s a want, you can 99.9% of the time, do without it. Understanding this concept will help your kid learn to spend wisely and if you teach them to ask this question before they make a purchase, it’s going to change their lives.

Money 202-Don’t spend more than you earn

Adults (or most adults) understand this concept. If your child doesn’t learn this before college, it is open season for college students by the credit card companies. It’s easy to “swipe” the card and rationalize they can pay for it later. Before long $20 becomes $50, $50 becomes $100, and $100 becomes $1000.

Money 303-If you want it, you have to earn it

This is an easy lesson to teach your kids, but many parents don’t. Start early with chores, then summer jobs, and then encourage them to save for that high ticket item. Purchasing a new car for your teenagers doesn’t teach them this lesson. Instead, consider a used car that needs some work, but only if they contribute some of the funds.

Money 404-Don’t depend on a rich benefactor

We’ve all seen those shirts in the mall that say: “My kid thinks I’m an ATM”. This is the mantra of today’s generation. If I want it, mommy and daddy will get it for me. If I want to go to college, mommy and daddy will foot the bill. Encourage them to always have some “skin in the game” when it comes to important purchases. If it’s their hard-earned money, it will have more value.

Graduate Course-Create a budget and stick to it

You can start early with an allowance and some weekly spending money for essentials. Explain to them that this is their money but it’s their responsibility to use it wisely. When it’s gone, it’s gone. They will have to wait until the next week before their funds are replenished. It’s as simple as sitting down with them every week and writing down how much money they have and what they will need to spend it on.

Kids who learn these lessons before college will be happier adults. They won’t become a slave to debt and they will work for everything they acquire in life.

For more budgeting tips read Wendy’s blog:

6 Circus Lessons for Balancing the Budget

college costs, college planning, parenting

Smart ways to live cheaper on campus



Here’s some great tips to help parents help their college-bound teens save some money when they go off to college. Take notes and start implementing these strategies into their lives BEFORE they leave for college.

By David Replogle for The Real College Guide

Living on a shoestring budget? Whether your parents float you funds or you’re pulling a part-time paying gig, here’s how to stre——-tch every precious penny.

piggy-bankBroke — it’s a common catch in student jargon. “OMG, I broke my phone at that rager last night” or “I just broke up with my girlfriend ’cause she was cheating on me with my best bud.” But when used as an adjective, the word describes the financial status of most college kids.

Unless Dad is handing over his preferred platinum card or you strike it rich selling those musty ol’ Pokemon cards, you’ll have to get by on meager means. Here are some painless ways to get major bang for your buck … even if it’s your last buck.

Put the “Eat” in Creativity

Whether you’re craving a change from the monotonous glop of the dining hall, celebrating a friend’s birthday at a nearby bistro or taking a study break to go for a late-night munch, your wallet will take a hit. Cutting back on these extravagances means getting clever.

  1. Buy in bulk When stashing snacks in your room, think long term. Talk to your roommates about pitching in for some grub, then head to the nearest warehouse retail chain to stock up on industrial-sized cheaper-in-the-long-run crates of Ramen packets and other non-perishables. Many discount clubs offer collegiate membership rates, and some give free introductory one-time shopping passes for non-members to bypass the annual fee altogether.
  2. Use the student discount Grocery stores, restaurants and even places on campus usually have discounts for students. Even if you don’t see it advertised, it doesn’t hurt to ask. Have your student ID at all times. It could save 15 percent on that panini or score you a free dessert!
  3. Sniff out free food Complimentary chow is almost as popular on campus as the latest gossip on CollegeACB. “Club meetings and churches are always looking to give out food to potential new members,” says Robby Panos, a University of Virginia junior. Philanthropic bashes and school-sponsored speaker events are also prime time for gratis grubs. Grab a slice of pizza and take in a lecture.
  4. Have a drink on me Students pour beaucoup bucks down the drain when indulging in conveniences like Starbucks and bottled water. Invest in a coffeemaker so you can brew your own, and get yourself a travel mug. Pick up a refillable water bottle too if your college’s tap is tolerable. Bonus: It’s better for the environment.

That’s Entertainment

Life doesn’t have to be a snore just because your pockets are empty. Money buys neither happiness nor a stellar social life. You can get out and about without tossing around a ton of green.

  1. Be art smart Your campus is probably rife with free productions, concerts and workshops. Problem is, nobody really hears about them … and when people do, the enthusiasm is usually lower than the grade on your last calculus test. Time to do some research (track down calendars of events), gather up your dorm mates and head to the next pay-what-you-can play or free movie screening. Even if it’s bad, you’ll get a few laughs — or at least the opportunity to heckle!
  2. Speak Greek Not joining a frat or sorority will save you a lot of cash right out the gate. But what happens when you want to get into the best party of the year and don’t have the connections? Exchange names of brothers and sisters you know with friends and ask them to do the same — on most college campuses, name dropping is the ticket to free admission. Once you’re inside, you’ll get beverages … and if you’re lucky, maybe even a few phone numbers.
  3. Out on the town Be in the know too when it comes to events in neighboring areas. Community organizations often host free outdoor festivals with live music. Local restaurants have early-bird specials. Theater workshops and art galleries frequently offer free or reduced admission. (Again, don’t forget to ask about student rates.) Read newspapers and pay attention to fliers. It could pay off.
  4. Any singles? If you have a significant other who saps all your savings, it may be time to have a chat about cutting back on unnecessary costs or to ask your partner to pull his or her own weight. If this person is not important to you, you may even consider living the single life for now. Romantic dinners and little gifts add up. Is it worth it? Your call.

Shop Till You Plop

Enter upscale department stores and exclusive boutiques at your own risk, but you don’t have to totally give up the urge to splurge. Just tone it down a few notches.

  1. Clothes the deal Punch up your wardrobe without breaking the bank: shop clearance racks. (The best ones are where an additional markdown is given to already slashed prices.) Look for one-of-a-kind finds in thrift and consignment stores. Pick up inexpensive accessories at discount stores and chain boutiques.
  2. Gotta dollar? Discover the beauty of the dollar store. It’s great for party supplies, stationery, candles, soaps, toiletries and tons more. Whether you’re buying useless trinkets or practical necessities, think about it: You can walk in there with a 10-spot and leave with lots of loot. Heck, you can scrape together a dollar plus tax in pocket change and treat yourself to something.
  3. Be a coupon king or queen Keep a lookout for coupons on one-day shopping events at major department stores. Also sign up for email notifications of store specials and be sure to check online for Internet coupons before making a big purchase. (Restaurants and fast food chains run a lot of coupon specials too, so keep your eyes on the prize.)
  4. Beauty booty Ladies, fine department stores dole out free samples at the cosmetics counters. Want to road test a lip color or facial moisturizer or new perfume? March on over there with an air of confidence and ask the consultant to show you some options. She’ll likely give you mini-sized products to try at home.
  5. What a card! If you’re a die-hard shopaholic experiencing severe withdrawal, hold off before reaching into your cash stash by keeping in mind that the holidays are right around the bend. “It might be painful to wait all semester,” says Appalachian State senior Diane Vachon, “but soon enough you’ll have a dozen gift cards with your name on them.”

Common Cents

Ask not what you can do for your school but what your school can do for you. Universities give back to their student patrons in plenty of ways, so take advantage.

  1. Be book smart The library isn’t just for studying, using the Net and people-watching. It actually contains books — a revelation, I know. If you’re taking subjects like lit, history or philosophy, the library could relieve a big financial burden. Instead of turning to the expensive school bookstore (or even Amazon) for a book, do a quick search on the libe’s browser to see if it’s available. Then drop-kick the kid who’s about to check it out.
  2. Get off your lazy butt If you have access to the campus gym and you’re paying for a pricey fitness membership, stop. Other free-of-charge physical activities: walking, jogging, hiking, in-line skating, riding your bike, a pickup basketball game, lifting weights in your room, dropping to the floor to do sit-ups and push-ups … shall we go on?
  3. Let’s make a deal You’re a smart cookie, so figure out how to split costs with your roommate. Double up on your laundry to save quarters. Share a printer, swap playlists and take the same cab home from a party. And if you’re both heading out of town, consider carpooling. Even if you and your roomie aren’t the best of buds, a road trip is always less taxing when there’s company … and music.
  4. Hop on that job “The No. 1 thing I can say is find a job on campus,” offers up Wabash College junior Mack O’Shaughnessy. “It’s the best way to get some extra cash in your pocket.” On-campus stores and restaurants are often hiring. Just don’t tell the folks: You still need someone’s sympathy, especially when it comes in the form of a crisp Benjamin.