Do You Give Your Kids an Allowance?

Does giving a child an allowance help him learn how to manage money when he becomes an adult? I believe it does.

If a child doesn’t receive an allowance and learn the value of money, I believe he will become a poor manager of his income when he becomes an adult.

allowance

Many parents don’t think about teaching their kids about money until they are about to leave for college. I think that is too late.

If you give your kids an allowance, they will begin to learn how to manage money. They will make mistakes, but at least you are there to guide them down the correct path.

Giving them an allowance will also help them to stop and think about how they want to spend their money. They will soon catch on that once the money is gone, it’s gone.

I have definitely noticed that my kids have a greater appreciation for things they purchase with their own money.

I think kids as young as four can begin to learn how to manage money. That’s also a good time to start teaching coins and their values.

Some suggest paying them an amount equal to their age each week. That would mean $6 a week for a 6 year old (or $24 per month). If that is too much, figure out an amount that works best for your situation.

The goal is to teach your child that money has value and how to manage it.

As they get older, create a list of items they will be expected to pay for themselves. This can mean money for clothes, movies, entertainment, etc.

My kids earn their allowances by doing specific chores on a regular basis. However, there are chores that my kids are required to perform that are not tied to an allowance. They are also able to earn extra money by performing extra chores.

Some people don’t think that allowances should be tied to chores, but I believe it gets them into the mindset of earning their pay. When they become adults, no one is going to just give them money. They will have to go to work to earn their paycheck.

We also use the 80-10-10 rule where they are required to give 10% to charity, save 10% and the remaining 80% is theirs to spend.

What are your thoughts on kids receiving allowances? How do you manage their spending? Are their allowances tied to chores? Let me know in the comments below!

Organize Your Foyer

Organize Your FoyerThe entryway or foyer is the first place guests see when they enter your home. It is also where your family will store their shoes, coats, keys and bags. A cluttered foyer can slow you down from getting out of the house in the morning.

Here are some tips to help you organize your foyer:

Before you begin to organize your foyer, take a look at where you will store coats. If you have a coat closet, use it only for coats, shoes, bags and outdoor gear. Try not to stuff it with other items not needed in the entry space. If you don’t have a closet, you can use hooks, pegs or even a standing coat rack.

Place a basket or two on the shelf in the closet to store gloves, scarves and hats. You can also hang an over-the-door shoe organizer on the closet door to hold the items in separate compartments.

Install a hook near the door you enter your home and hang your keys there. That way, when you are leaving the house, you won’t waste time looking for them.

Find an attractive way to store items like loose change, sunglasses or mail by using baskets, or small decorative bowls.

Place a basket or shoe rack near the door or in the coat closet to keep shoes from getting out of control. Taking your shoes off when you enter your home will decrease the amount of germs that enter and will help keep your floors clean. Empty the shoe basket every few days to avoid shoes getting lost at the bottom.

Umbrellas should be stored standing up. They can get damaged if laid on their sides. Look for attractive trash cans (wicker or wire mesh) to hold umbrellas near the door or in the closet. Make sure there is plenty of air circulation for the umbrellas to dry effectively.

If you have enough space in your entryway or foyer, consider adding some type of seating for putting on and taking off shoes. A bench, chair or ottoman will do the trick. If you can find an ottoman with storage inside, you’ve hit the jackpot! Now you can store additional items in the ottoman and keep it from cluttering up your entryway.

Hopefully, these ideas will get you inspired to organize your foyer. Remember, you only get one chance to make a first impression. Put your best foot forward and enjoy your organized foyer!

 

Why is “Budget” Such a Dirty Word?

For some strange reason, most people look at budgeting as a bad thing. Personally, I think budgeting is the path to wealth. If you don’t know how much money is flowing through your house, how will you be able to save money and pay the lowest prices for the things you need?

budget

I created my first budget when I was 15, so budgeting is not new to me. It’s simply keeping track of how much comes in and how much goes out. I create a new budget each month because the amounts of certain items fluctuate from month to month.

I love Dave Ramsey’s guide to creating a budget. He states that your budget should have a zero balance when you are finished creating it. Having a zero balance means that you know where every single dollar is going for that month.  If you’ve never heard of Dave Ramsey, here’s his website to learn a little bit about him.

So, let’s get started. I am going to show you a quick and easy way to create a budget you can live with.

  1. Write down and total all of your income sources-paycheck, child support, alimony, part-time job, any other money that comes in consistently each month
  2. List and total your monthly expenses-mortgage, rent, car loan, insurance payments, charitable contributions, cable, gas, electric, water, sewer, cell phone, food (this category can be greatly reduced if you follow my coupon posts), and debt payments.
  3. Subtract the total of your monthly expenses from your monthly income.Whatever is left over can be allocated to things like: savings, paying down debt, charitable contributions, eating out, entertainment, vacations, birthdays, holidays, home maintenance, auto maintenance or anything your heart desires. Just be sure to specify an amount to each category to help you stay on track for the month. When you are finished, your income and expenses should be the same amount. This is the zero-based budget.

Now the key to sticking to a budget is tracking your expenses during the month. There are many ways you can do this. There is an envelope system where you put the money for each category in its own envelope and spend from there. When the money is gone, you have to wait for next month to replenish it. This system will help keep you from overspending and will enable you to see how much money you are really spending in each category. If you run out of money in your grocery envelope too soon, but have money left in your entertainment envelope at the end of the month, you can adjust the numbers for next month to include more money for groceries and less for entertainment.

You can also keep up with the balances in each category by using an Excel spreadsheet or a checkbook register.  In this age of technology, there are also apps that you can put on your phone or tablet to keep track of purchases and balances. I like to use GoodBudget but there are many others out there for you to choose from. Search around for a good fit.

Know that it may take a few months to get a handle on your budget. Just keep tweaking it each month until it feels right.

Now, what if your expenses exceed your income and you don’t have any left over? That means that you are living above your means and need to find ways to either increase your income or reduce your debt. Read this post to learn how to begin living below your means.

Be sure to check out my other post about paying off debt using the Snowball Method.