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Let’s face it. Children are expensive. Just providing the basic necessities like a roof over their heads, food in their bellies and the extra usage of the basic utilities come at a high price. That doesn’t even include the hidden costs of living, like insurance, auto maintenance and health care. Add it all together, and you can start to see the pink tint in your checking account balance. It can be scary.

If it is scary for you, how do you think your children are going to feel when they move out on their own and are faced with a paycheck that barely stretches far enough to pay for necessities – forget about far enough for anything in the ‘want’ column. Personally, I know how hard it is to make ends meet. As a young mother, I didn’t want my children to face that reality without being prepared.

I was one of those mean moms. My children did not get an allowance for doing chores around the house. My attitude was that they also lived there and helped to create the mess. They could certainly pitch in and help keep it clean. I assigned chores according to age and ability. At four years old, James’ bed-making skills left a lot to be desired. But he was required to learn and to do it. I offered assistance when his short little arms couldn’t stretch the distance. Sarah, two years older, was expected to do a bit more. However, there were other things that needed to be done, and if they wanted to earn some money, they could help with those. Payment was commiserate with the type of work to be done, and the amount they did. As soon as she was able, Sarah babysat for spending money. James would help his dad, or mow lawns when a neighbor needed it. Grandma and Grandpa were always good for a job or two, as well.

As they collected their ‘pay’, I had them place it in a cigar box. I also had them write it as a ‘deposit’ in an extra check register that I got from the bank. If they wanted to spend any money, they had to mark it down as a withdrawal. Occasionally, both of them would see something they wanted. Since that was a lean time for Randy and I, we weren’t ready to dole out cash for just any whim. Instead, we would have the kids determine the price of the item, add the tax, and then check their ‘bank’ for available funds. If the cost was more than they had, then we talked with them about ways they could earn the extra money. If the funds were available, then we explained how they would have very little to nothing left for something else they might want – like going to a movie on the weekend. It didn’t always sink in with them as children, but as adults, both of my kids can be tight with their money. Sarah does some amazing things to make her money stretch – especially with the expenses involved with a three-year old child. James has no problem doing without, just to keep a decent balance in his savings account. And when he does encounter a ‘crippling financial blow’, it doesn’t take him long to work his way out again. Truthfully, I could probably take a few lessons from both of them.

Math – basic budgeting takes the simplest form of math – addition and subtraction. But in order to really budget, you need the skills of projection. The smartest way to budget is to project what expenses you are going to have within a one year period. The electric bill may not be as high in the winter as it is in the summer, but either way you need to be aware of what you might owe. Around here, there is always an emergency that requires a hefty sum. In order to be prepared, I use the advice my mom gave me when she taught me my first budgeting skills: 10% to tithe. 10% in savings (always pay God and yourself first). Mortgage, other loans (like credit cards – she always felt like they fell into the loan category), utilities, gasoline next. Figure up your yearly insurance bill and put 1/12 of it in savings, along with that 10%. And always try to have another 10% for fun. She told me that if I only paid my bills, and didn’t allow for any fun, then I ran the risk of spending the rent money on a weekend fling, and then would end up without a roof over my head. Wise words, Mom.

Shop Class – The accumulation of money seems to be a driving force in the world today. The more you have, the happier and better off you will be. Unfortunately, that is far from the truth. In reality, money is a necessary tool that provides us with the basic necessities – a roof over our head, food, insurance and utilities. The best thing we can teach our children is how to use this tool properly. You do not use a nail to saw a board in half. A screwdriver doesn’t work to drive a nail. A wrench won’t get a screw out of the wall. If we teach our children that money is a tool and not the solution to great happiness, they will have a better understanding of how to use it. Let them find out for themselves at an early age how to earn it, and they will probably have a better appreciation for it, instead of elevating it to some unattainable god in their life.

Psychology – Every human needs to feel secure in their life. To not know where your next meal is coming from, or whether or not you will have a roof over your head next month can create such a significant amount of stress that you may have added medical expenses to an already stretched-to-the breaking-point budget. To live within your means, with a little left over, helps to give you that secure feeling. To feel secure means you can sleep well at night, and we all know a good night’s rest is one of the first ways to remain healthy.   That isn’t to say that emergencies well above our financial comfort level won’t happen, but to know that we are able to budget for those contingencies, and have a credit score good enough to secure a loan to make it through is comfort in and of itself.

An old English Proverb says, “Take care of the pence and the pound will take care of itself”. These are wise words to live by. If you watch your pennies, then eventually, those pennies add up to dollars. And it’s those dollars that pay the bills and offer a little left over to play.

*For a sample budget for Kids, head over to the DIY page!