I know I usually post about marriage and parenting, but I thought given the economic crisis the world is facing I'd talk economics. Please forgive me, but I've had a thought, and I'd really like your opinions!
Here's the issue: right now, through payroll deductions in both Canada and the U.S., working families are paying for seniors through Social Security (U.S.) and CPP (Canada). As we found out in the debt ceiling debate, Social Security money isn't deposited into millions of little bank accounts; it comes out of general revenues. So your money isn't being saved for you; it's paying today for seniors. And many of those seniors have way more money than you do.
Eventually, with the budget crisis the Western World is facing, people are going to start to notice, and see that young people paying for wealthy older people, as young people receive fewer and fewer government services and older people more and more, cannot fly. So they'll HAVE to means test Social Security and CPP, meaning that the wealthy won't get as much. I don't think they'll have a choice.
I don't like that idea, because as soon as you means test, you give a disincentive for being responsible. If people know, "If I save for my retirement, like I'm supposed to, then I'll lose the government 'free money' ", then they'll stop saving.
We can't reward irresponsibility and punish responsibility.
But is there another way? I think there is.
Here's what it would look like. Instead of taking a portion of all paycheques and putting them into a vast account called "Social Security" and "CPP", the government could deduct 5% or 10% or whatever from your paycheque and then deposit it into your personal retirement account that you now control. It isn't going into general revenues; it's your money. You can't lose it. You're not funding other poeple; you're only funding yourself. But the government is forcing you to do it. If the government doesn't deduct the money, most people won't save. This way, the same amount of money is flowing out of your paycheque, but it's going to you, not to anyone else.
If your investments tank, or if you never made very much money, then government help would still be available to the elderly poor. No one would starve or freeze. But in general, people would be responsible for themselves now.
Of course, the transition would be hard, because I don't know how they'd wind down Social Security and then implement this. Probably for a few decades it would have to a mix of both.
But why isn't this being talked about? Doesn't this seem like a logical solution? Or am I missing something? I'm just genuinely curious what other people think, so I decided to throw it out there.
But one thing's for certain: expecting struggling young families to pay more and more of their paycheque to the wealthy, who currently have more resources, can't keep going on for very long. Something's gotta change. This seems like a good place to start. What do you think?
I'm taking some time this summer just to rejuvenate, so I'm running this guest post by Patty DeLoach from Patty's Pen.
When our kids were small dressing them was a breeze. They didn’t have opinions on clothing. They were too busy walking the creek or playing street hockey with the neighborhood pickup team. But when they reached about 6th grade all that changed. Allie became very conscious of labels. She needed certain name brand things, or so she said. I had a real hard time with this as, to me, it indicated an unhealthy desire to project an image.
Then there was the day she broke down in tears and told me that she had to have a designer backpack or the other kids at school would make fun of her. *Lightbulb Moment* My sweet little girl wasn’t trying to make a fashion statement, she was just trying to survive the rigors of Middle School. So, did I run out and buy her that outrageously overpriced nylon backpack with the ridiculous sewed on icon? Nope, I didn’t.
Did I want her to fit in with the other kids? Sort of, kind of. I talked to her about friends being the folks who liked you for who you are not what you have. I reminded her that the reason she wasn’t in private school or being home schooled was that the world is a place of all kinds of people and Hutch and I wanted to help her learn to deal them while she was under our roof and authority. She nodded, but I knew she didn’t get it.
So Hutch and I came up with a compromise that worked for us all. We started giving her a small clothing allowance monthly, $25. With this allowance she was to save up to buy her clothing and accessories [read book bag here].
All of the sudden she was the mistress of her own clothing decisions. At first she squandered her small pittance on lots of little things. Hello Kitty’s stock must have risen several points just on her expenditures alone. Then after a month or two she buckled down and got serious about saving. Did she ever get that pricey backpack? Yes, she finally did. And maybe it wasn’t such a bad purchase after all. She carried the thing for many years until it literally burst at the seams. I estimate the final cost analysis was in the range of $8 dollars a year. Not too shabby.
By giving our kids that clothing allowance we taught them many different life lessons. They learned to identify what they really wanted based on a thorough examination of needs, value, & durability. They learned how to save for those things, taking responsiblity for their own decisions. But most of all they finally learned that designer labels don’t count for much.
In the end our kids both turned into responsible adults who buy for value. Most of the time they purchase second-hand.
Just a couple of weeks ago our son Jon, who teaches high school, visited us and made a trip to his favorite thrift store for three almost new dress shirts. Allie called me from Colorado last night where she lives with her sweet hubby. She related how they bought the baby crib they wanted for a 75% discount just by watching the sales, using a coupon, & having it shipped from a Ga. store to a Denver store. A $400 crib for $99 is a pretty great savings.
Anyhoo- It just goes to show that you can teach your kids life is all about being rich in the intangibles [love, respect, passion] and not about spending a whole lot of money.
Hope Summer is great for you and yours! Love Never Fails.
Want to learn more about how to implement clothing allowances? Read this post. Patty DeLoach writes for newspapers, magazines, and film production companies. Currently she's blogging about her passions for faith, family, food, frugality, and fun at Patty's Pen. She has been married 35 years, has two grown children, and works everyday to live by the Biblical axiom - 'Love Never Fails'.
I know many of my faithful readers could probably give us all lessons on frugality! Many of you are just so good at making a dollar stretch. I sometimes find it hard to talk about this issue because most of you know that my husband is a doctor. Money just isn't a concern for us like it is for many others, and everytime I write about how we should spend less I get nasty emails telling me that I don't know what I'm talking about and I should just shut up. So I often steer clear of the subject.
But I'd like to add my thoughts anyway today, and please don't send me nasty emails!
First, a little context. I grew up to a single mother in a lower-middle class home for most of my life. Her jobs got better as time went on, but we were never well off. So I learned the importance of working and saving as a teen, and I knew that if I wanted to go somewhere on a trip or if I wanted to buy something big I'd have to pay for it myself. And I did.
When we married, and started having children, Keith was still in residency and making hardly anything at all. The banks were willing to lend us tons of money based on future earnings, but we didn't take out loans. We lived in an apartment (many of his classmates bought houses with no money down), and we didn't have a car. I shopped at second hand stores. And during those years of his residency we managed to save a fair amount for a downpayment, so that when we bought our first house we didn't borrow the whole amount.
The banks would give us $450,000 for a house based on his projected earnings, but we bought one that was 1/4 of that in a regular middle class neighbourhood with lots of kids. It was marvelous! We lived there for nine years until we paid it off and bought a slightly larger home, still in a primarily middle class neighbourhood. Very few doctors live around here.
I'm not saying this to toot my own horn; I'm just saying this because I do believe we've practiced what we preach in this area, at least. The one area we spend too much on is travel, having taken the kids on a whole bunch of missions trips, but I think that has lasting impact.
Anyway, here's the other reason I'm saying this: because we have consistently lived below our means, we've managed to save a lot of money so that my husband can conceivably cut back on work in the near future and we could potentially go overseas for a few years for ministry. I still don't know if that's where God will lead us, but the main thing for us is that we have the option.
And that's what living below one's means does for you: it gives you options. You aren't tied to a job you hate in the same way because you have a buffer. You can pursue more dreams. You can take some time off. You can give more away.
And living below one's means has very little to do with income and a lot to do with attitude. You wouldn't believe the number of physicians in our social circle who are close to bankruptcy. They make a ton of money and they're not saving it or treating it responsibly. Just because one makes a good income does not mean that one spends it well.
I ran across a few statistics a while ago that I think are quite interesting about the difference between millionaires and non-millionaires. The long shot? Most millionaires don't buy really expensive things. They're millionaires because they buy regular stuff. The people who buy the expensive stuff are people who are trying to LOOK like millionaires, not people who actually are.
* Eighty-six percent of all prestige or luxury makes of motor vehicles are driven by people who are not millionaires. * Typically, millionaires pay about $16 (including tip) for a haircut. (this must be for guys!) * Nearly four in 10 millionaires buy wine that costs about $10. * In the United States, there are nearly three times as many millionaires living in homes with a market value of less than $300,000 than there are living in homes valued at $1 million or more.
When we live below our means, we're able to save more and eventually be worth more, which gives you options. When you live beyond your means, then you're committing yourself to having to earn a whole lot of money to pay off that debt. You're limiting your options.
So wherever you find yourself today, with whatever income, remember to live below your means. If you do so, you'll be acting more like a millionaire than you think! And you'll be helping yourself immeasurably!
I don't have time to write a long post today, but for your viewing pleasure, I present this hilarious video on how to get out of debt fast. It's got one simple tip. See if you can pick it up:
Yesterday I asked "are you called or are you driven"? Do you feel like your life is out of control, or can you peacefully move forward, knowing God is leading?
Living Tight
Today I want to look at that question in relation to our finances. But before we do that, look at that picture of a house at the top of this post.
Small, isn't it? And yet the majority of North American families in the 1950s lived in something that looked pretty much like that. After World War II, we radically expanded the idea of home ownership. Instead of renting, people bought these little houses, and they, by and large, thrived in them.
Was it tight? You betcha. Often three bedrooms with four or five kids, so 2-3 kids would have to share a bedroom. Bunk beds became major furniture items. The living room was small, so people sat on the couch and the floor to watch TV. Kids did homework at the dining room table.
My husband grew up in a house like that: four boys, one bathroom, small kitchen. And they survived just fine.
Am I about to write a post telling everyone you should run out and buy that house? No, of course not. What I am saying is this: many of the things we think are absolutely necessary are not. It is simply that we have listened to our society and we have turned many wants into needs. And that is part of what is making our lives so harried!
Today I want to talk about how to make decisions about work, because one of the biggest issues you will face when it comes to quality family time is whether or not both parents work outside the home. It's just a fact. I'm not going to talk about whether or not you should leave your child in day care; I've already done that here. I'm not going to talk about how you can make money if you stay at home; I've done that here. I'm also not going to talk about the fact that often it costs so much to work that it's not worth it, because I've done that here (and read the comments!).
What I do want to talk about is how we can get off this merry go round that tells us that we NEED so much stuff. Work, you see, is directly related to expenses. Lower the expenses, and a job is not as much of an issue. Increase the expenses, and you have to work.
So let's ask this: what was the quality of life like for people growing up in those tiny homes?Of course, so much depended on the family. But the size of the home was not necessarily bad because people adjusted. It was all they knew, and they felt grateful to have a home. Let's also remember that in most parts of the world, far more people are squeezed into far smaller spaces than even that house represents. We are the strange ones, living with our huge homes. Our grandparents, in these small homes, were not strange. They were more the norm.
What did people do with less space? The kids played in the living room together, or in the basement. They didn't hang out in their own rooms, away from their siblings. They tended to be together. They went outside more since inside was cramped, and thus they got more exercise, even in the winter. They didn't spend as much time on television, because families usually only had one, and sometimes Mom and Dad would want to watch their programs, and the kids had to scatter. They played board games. They made Lego. They played with dolls. They used their imagination.
And that was okay.
Dreaming Big
When you were 13, did you love bridal magazines? Did you used to read them and stare at the pictures and imagine what your own wedding would be like? Many of us did. But many of us still do--we just replace the bridal magazines with Home & Garden, and we dream of a beautifully decorated, spacious home. It's what we're aiming for. We want to have "arrived". We want the space, and the luxury.
But what if that space and luxury comes at the expense of massive amounts of your time--or your husband's time? For it is not just women working that this quest for more stuff affects. It's also men working. A few years ago we made the decision that my husband would work less so he could be home with the kids one day a week. Because he was on call so much, he was often gone at night, and he was missing out on so much with them. So he decided to work less. We gave up some money so that he could gain some much needed time. That's what it all comes down to.
Not surprisingly, when we trim our expenses, we're often able to build wealth and increase our security. Millionaires, for instance, don't tend to act like millionaires. It's those with less than a million dollars who consume all the luxury stuff, because they're acting like they want to be millionaires. Here are just a few stats I picked up from the Growth Matters blog:
•Eighty-six percent of all prestige or luxury makes of motor vehicles are driven by people who are not millionaires. •Typically, millionaires pay about $16 (including tip) for a haircut. •Nearly four in 10 millionaires buy wine that costs about $10. •In the United States, there are nearly three times as many millionaires living in homes with a market value of less than $300,000 than there are living in homes valued at $1 million or more.
The two things to take away so far? We can surely survive on less than we think, and yet at the same time society is lecturing us that we need more--and we're believing it.
Think "Enough"!
Imagine how we could change the culture if we just said, "Enough!". Enough credit card debt. Enough working round the clock to afford all the latest gadgets and the big cars. Enough stress from living beyond one's means. Enough believing that life is all about entertainment and stuff instead of about family. You see, the best things in life aren't things at all. But we seem to have forgotten that. We think our kids need stuff, when what they really need is us.
Here's a family that gave up the rat race and decided to "live in the middle":
His income has stayed steady at roughly $20,000 a year. Lola earns about $30,000 plus benefits working part time as a medical technician in a nearby hospital lab. A decade ago, the couple earned twice as much — about $100,000 a year. Gregg sold insurance, and they lived in tony North Scottsdale. But he wasn't happy.
"We were on this treadmill of making money, making as much money as possible every year, and feeling that we always had to increase that because we wanted to buy more things and live in a nice house and have nice cars and everything else," he says.
At the same time, Lola didn't get a job she'd dreamed of, working at the Mayo Clinic in Scottsdale. That's a painful memory.
"I remember I prayed, I prayed so hard. I still didn't get a job. But there was a sense of letting go," she says.
Perhaps you need two incomes to get you to the minimum that you can afford a house, even a small one like that. That's okay, as long as you've prayed about and you're trying to meet your family's NEEDS, not WANTS. But many of us are on a treadmill trying to meet WANTS, and it doesn't work.
Now, those who know me are going to say it's easy for me to suggest all this, because I'm not in that position. I've got it made. And I do. My husband is a doctor, and we're able to live quite comfortably. But it was not always that way. Both Keith and I put ourselves through school. While he was in training and the kids were born, we lived in a small apartment, without a car. I spent my life with the girls taking them to playgroups and museums, because the apartment was too crowded to stay in during the day. Others in training had taken out the massive loans the banks were offering, and they had bought vehicles and homes. We didn't. We saved for a downpayment.
And then we bought a nice house, 1400 square feet, in a neighbourhood where no doctors ever lived. After ten years, we moved to the house we have now. We have always paid cash for our used cars. We buy our clothes at second hand stores. And we endeavour to take as many missions trips as possible and to give as much away as we can.
Yes, I have it easy, but even when we didn't we made the decision to live "small" so that we could enjoy life more.
The Benefits of Downsizing
The best thing some people could do is to sell their home and downsize. Yesterday in the comments Kristy shared that's just what she's doing--downsizing to get their finances under control. Unfortunately, that's not so easy right now with the glut of houses on the market. Many people will have to remain in the house they're in simply because you can't get a decent price right now. But maybe there are other things you can do. Buy a used car instead of a new one. Eat out less. Learn to save money on the big things, like electricity, insurance, utilities, car payments. And learn to save money on the small things, like groceries, eating, shopping. Many women basically "earn an income" by staying at home and putting a lot of time into saving money!
Is it fun? It can be! Think of it like a challenge, to make the money last. Give up some extracurricular activities with the kids, but replace it with fun family time, where you play games or have parties every week. Stop going out for dinner and have people over more. All of these things are "fun".
Our society cannot go on the way it is, with so many living beyond their means. We are crushed in debt at every level--personal, state, federal. We have built a beautiful society, but it is built on sand. One day it will come crashing down, as it has already begun to. I want to be ready, by raising kids who don't need stuff. Who don't ask for a huge list at Christmas, but instead look forward to all the games we play that day. I want to live with less so I can live more. That's getting back to what's really important.
So here's your exercise for today: examine your 10 biggest expenses on a monthly basis, and ask if they're necessary. Can you downsize? Are these things you want, or things you genuinely need? Can your family develop a new way of looking at money, as something that works for you to build wealth, rather than something that slips through your fingers and is a source of stress? Can money be the vehicle that you help others with, instead of something you're always desperately worried about?
For some it's a hard switch, because you're already living bare to the bone. For many of us, though, we just need to change our habits. Tell me in the comments what you think. Have you ever downsized? Have you ever chosen to forego something big? What did it feel like? Let us know!
UPDATE: Welcome, Organizing Junkie readers! Glad to have you here! I've got tons more articles for simplify your life month, as well as lots on parenting and marriage, so stop by and look around! And if you liked this, be sure to share it on Facebook below!
We live in a consumer culture, which is based on two principles:
"I deserve to be happy."
"I could be happy if I just tried a little bit harder."
That's what our culture sells us. We deserve to be happy, and the route to happiness is all around us. It's at the makeup counter, where blissful, beautiful women shine. It's at the travel agency, where frolicking couples head to the Bahamas. It's at the clothing stores, where ecstatic models drape themselves in the latest fashions. Happiness is easily attained, if only you buy the right stuff.
Then you buy it, and you're not happy.
Because you're still missing something. And the whole cycle starts again.
I've never really been into this cycle. I just couldn't be bothered to try to get the brand names, or the latest fad, or the best shoes. My biggest thrills tend to come from Thrift Store excursions, when I pick up a bunch of clothing that's perfect for my kids and light on my pocketbook. It makes me feel like I have conquered the world!
But just because I'm not into brand names does not mean that I haven't been sucked in by our culture as well. Think of how much you define your happiness by something you can pay for. When you're out with your children grocery shopping, and they've been particularly good, what do you say?
"Let's go get a treat!"
When you're at home and you're just really grumpy, what do you do to give yourself a pick-me-up?
"Let's go shopping!"
Even if it's just to the corner store to get a chocolate bar, or to the thrift store to get a new outfit.
And what is it that we do for fun? It's all things that cost money, like computers, and televisions, and boats, and restaurants. We have lost the art of just being, of just living, of just breathing in the glory of the day and the wonder of the people and relationships all around us. We have lost the beauty of revelling in God alone.
This consumer culture is very difficult to break out of, because we are so immersed in it. The Israelites, back in the Old Testament, used to get in trouble rather routinely because they started worshiping idols again. Did you ever read that in your Bible and think, "Boy, they must have had really low IQs back then to go to an idol when they had the God who parted the Red Sea with them the whole time!"
It's easy to judge a culture that lived 3,000 years ago, but I think we do the same thing. We have a God who has given us everything, but where do we turn for happiness? We usually turn to something that the wallet can buy, because we have bought into society's lies that "we deserve happiness", and the route to happiness is to try a little harder--to buy some more, to earn some more, to spend some more. It's always just a little more.
When you are attempting to survive on one income, feeling a little hard done by is a natural reaction, I think, because you aren't going to have those things that people now think of indispensable. You may not have your own cell phone, let alone an iPhone. You may not have your own personal laptop. You may not even have bedrooms for all your children, or a separate freezer, or a new van. You may not have all these things which every family "needs". But why did we ever decide that families needed these things?
What families need, I think, is time together. They need time to play and laugh and have fun and learn of each other. They need time to learn character lessons, to pray together, to explore God's creation, and little of that costs money. The best fun we can have is just being together and laughing together, and that is a joy few in this world know. For most families, togetherness is sitting at the same table while each person is on their individual iPhones. That's not right.
We live in a world that wants to keep us perpetually dissatisfied, because then it can sell us on the idea that to be satisfied all we have to do is buy one more thing. That's how our economy works. Do you think we all actually need all this junk? Of course not! But they're trying to sell it to us anyway. And much of the current crisis that we're in economically is because people thought they deserved everything, when they contributed very little. We are living beyond our means, and now the markets are catching up. We aren't saving; we're putting things on credit. We can't survive for long when it's all fictional. A new realignment will soon come, when people will be forced to live within their means again, and I think that's a good thing.
It means that over the next year or two, if we're lucky, frugality and responsibility may come back in style. It won't be about conspicuous consumption as much as it will be about keeping one's head above the water. And perhaps, as families realign their goals, they'll realize that all this stuff didn't keep us happy anyway. The more stuff you have, the harder you have to work to pay for it and to keep it up. How much better to work less and to still have time to read to your kids!
So if you're feeling dissatisfied, shake it off. It is not your fault. To feel dissatisfied is not necessarily a sin; I think it is more of a temptation in this world that is trying to sell us on constant dissatisfaction. To nurture dissatisfaction, though, is going down the wrong path. If you're sad about all the stuff you don't have, think about what you do. Think about how you don't have to be a slave to all of these things that you wish you could buy; instead you can be free to find more creative fun. Families usually do better that way, anyway.
A constant danger that was warned about in the Old Testament was that people would get fat and forget the Lord. They would have all they needed, and so wouldn't need Him. We have lived in a very fat age, and we have found that it does not satisfy. Take that realization as a good thing, and not as a disaster. Yes, this world is worrisome right now. Yes, the future is uncertain. But that just means that we're going to get back to what is important, and we'll be thrown back towards God. And maybe, just maybe, the next time we think of the word "treat", we won't pull out our wallets. We'll look down at a giggling todler and climb down on the floor with him and play airplane. Wouldn't that be fun?
Do you feel rich? You likely don't. Few of us do, and especially in this recession, many of us are understandably worried about money. We're not sure how the bills will get paid. We're wondering when our husbands will find work, or better work. It's tough.
And I don't mean to diminish that. I just want to add some perspective. Here's something I read on the Sarcastic Christian blog that made me think:
If you make $25,000 per year (about $12.50/hr) you are in one of the top 10% richest people in the world! If you make $35,000 per year, that puts in in the top 5%. If you make $45,000 per year, you are in top 1.72% richest people in the world!
Wow. You probably think you're stretched, but most of us, reading this blog, are at least in the top 10% of the world, at least when it comes to family income.
Most people in the world wonder where their next meal is coming from. We worry about what takeout we might order tonight.
When I was in Kenya recently, one of the biggest delights was sitting with several Kenyan women just chatting as I taught them how to use knitting machines to start a micro business. (Here's my mother with two of our "students"). One woman, who had been rescued from the street when she was 10, and was now a married mom, asked me what we "plant" here in Canada. She wanted to know what crops my husband and I grow, because in Kenya, that's the main thing. Everyone grows something, and one's crops determine one's wealth. It's inconceivable that one wouldn't grow crops.
I explained the kind of crops that grow in my area of Ontario, without going into detail that the only crop I actually grow rather well is dandelions.
Another shocker from our first trip to Africa was how expensive sanitary pads are. They run about the same price as they do here, with the only difference being that there people only make about $1 a day. If you made $1 a day, could you afford pads? Probably not. And that's why many Third World girls and women miss a week of school and work every month because they literally have nothing to use.
One of my pet projects in Africa was showing the women how to sew sanitary pads out of rags (and fabric scraps from their sewing school). We got quite good at them!
They're just flannel on top, two layers of towel (or four layers of flannel) in the middle, and then fleece on the bottom. Here's another one:
Kind of cute, aren't they?
Here's a stack all cut out and ready to go on the sewing table at the orphanage. They just loved them (although everyone acknowledged they're a pain to wash). But women have been washing them for centuries, and they'll figure it out.
It's a little thing, sanitary pads. We take them for granted. But that just shows how rich we really are!
I know many of you are struggling with money right now. Remember, though, that we have been given so much here, and no matter how bad things get, God has still given us so many blessings. If you're burdened with worry today, think of these girls in Africa, so thrilled just from a little piece of flannel. We have much to be grateful for, and remember that this, too, shall pass.
Every Friday my syndicated column appears in a bunch of newspapers in southeastern Ontario. Here's this week's!
Last week, in New York, the Staten Island Ferry collided with the pier, sending passengers hurling towards the deck. That scene is about to be replayed, all across the Western world. Our ships are coming in, and it’s not going to be pretty.
For many years, we have been living the high life. Our governments have promised us free health care, abundant retirement income, beautiful roads and parks, and all kinds of goodies. And it’s all paid for with borrowed money! But what happens when the money runs out?
We caught a glimpse of it in Greece, where workers have been rioting, throwing Molotov cocktails into banks, and killing several employees. What got their ire up so much? Greek public workers have been living quite high on the hog. Many can retire in their fifties or early sixties. They’re given bonus pay equal to an extra two months of work each year, and that pay is a lot higher than private sector workers get already.
When Greece inevitably approached bankruptcy, and had to be bailed out, countries like Germany, who were footing the bill, demanded austerity measures. Instead of retiring at 61, Greek public employees would now have to work until 63. And their pay would be frozen, too. Germans, it should be noted, can’t retire with full pension until 67. But for some reason Greek rioters don’t feel ashamed that Germans have to work longer to pay for Greek salaries.
Canada’s not in as bad a shape as other governments. But that doesn’t mean we’re in the clear. Baby boomers are set to retire, and that will cause an earthquake on government balance sheets. Whether it’s CPP or health care, we’re going to be on the hook for billions, at the same time as the proportion of Canadians actually working and paying taxes will fall. Yet politicians won’t talk about the crisis that this will inevitably cause. Instead, many parties just keep proposing even more sweeping social programs.
During the British election, where the Conservatives recently won a very unstable minority government, nobody talked honestly about their looming financial crisis, either. Honesty apparently doesn’t win you votes.
Maybe, then, the problem is not solely with politicians. Perhaps the problem is also with us voters, who continually allow politicians to bribe us with tax dollars. They promise us largesse from “Other People’s Money”, and we obediently check the box next to their names. Meanwhile, the world financial situation grows more dire from bailout upon bailout until the entire house of cards falls down. Relatively better off countries are now borrowing money to save countries who have borrowed too much money. Anyone feel like Alice in Wonderland?
Recently my daughters and I watched a movie set on the western frontier in the 1800s. Everybody saved and worked so hard to build a better life. It reminded me of the farmers I know today; up before the sun, rarely taking vacations, and working as hard as possible to have something to leave to their children.
We have lost that mindset. As the government does more and more, we start to expect it to do more and more. Then, when governments have to announce that the party is over, people protest by destroying stuff, like a toddler throwing a temper tantrum. Adults don’t have temper tantrums. They sigh, feel sorry for a while, but then they pull up their boots and get to work fixing stuff.
We’ve become a world of children. And kiddies, our ship is coming in. Are we going to set fire to it, or are we going to get to work trying to put everything back in order? It’s a choice all of us are going to have to make soon. I sure hope we choose right.
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Here it is--our definitive post on how to save at the checkout counter! I've got a ton of tips coming, but first, a giveaway--
Last week was our giveaway post for Mary Ostyn's Family Feasts on $75 a Week! So today it's time to announce a winner. I'm going to randomly pick a winner from the comments, so drumroll please:
And the winner is....
Dianne from Bunny Trails! Dianne has such a beautiful blog! I used a random number generator to choose a winner, and Dianne won, so congratulations!
If you didn't win, I really encourage you to get the book anyway. It's not expensive, and it will save you tons of money with lots of great ideas. Here it is:
In the meantime, we've had so many great tips entered in the comments that I wanted to summarize them all here for you. So if you want to save money on groceries, here are the top ways:
1. Coupons, coupons, coupons. They work! And if you don't know where to get coupons, or you don't know what's on sale at different grocery stores, don't worry! You don't even need to keep track of it anymore, because the website A Full Cup lets you print out coupons by store and by product, and generates shopping lists based on sale items at your store of choice. It's awesome, and it's got everything! For coupon lovers, you must CHECK IT OUT!
2. Meal Plan. When you know what you're going to eat, you buy for what you're going to eat. You don't buy a lot of stuff that's just going to sit in your cupboards (or turn to green mush in your vegetable drawers). If you can't handle the thought of getting that organized, let someone else do it for you! Check out Dine Without Whine . They provide the menus and the shopping lists, and it's easy!
3. Think Italian. Pasta makes meat and veggies go a lot farther. And you don't need a lot of meat in spaghetti! Try to start cutting down on the ground beef and substituting more veggies. It's healthier, and a lot cheaper!
4. Use cereal wisely. Think of it as a main course once a week, say Sunday after a busy day. Don't eat it everyday, unless you can buy it on major sale.
5. Stretch out one meal into more. For instance, cook a big chicken, but then use the leftovers in a shepherd's pie. Then use the bones in a soup stock. Freeze all leftover meat. You can make 3-4 meals from one chicken or one beef roast like that. I always freeze all the little bits that are leftover, even if it's just enough for one person. That makes a soup that will feed four. And if you combine those little bits, you've now got enough for a stroganoff or a casserole.
6. Buy only what you like. Don't buy on impulse because you "should". Stretch yourself certainly by trying a new veggie every now and then, but remember: you're unlikely to eat it if you really don't like it. I once bought liver sure that I would make us all eat it. I lectured the kids backwards and forwards on not grousing about it. I told them I would make it and they would eat it and be grateful, because we all needed the iron. Then I went to cut it and it squeaked. Meat is not supposed to squeak. I threw it out, and that was the end of that.
7. Shop on days that the supermarket reduces the meat by 50%. Freeze it that day, and then it's still fine.
8. Don't buy pre-packaged foods. Make it from scratch.
9. Invest in a freezer. You can get a good one for a few hundred dollars, and then stock up when stuff is on sale. When bread is on sale, buy a bunch and freeze it. We also buy half a cow at a time, cut the way we want it. It's so much cheaper (and healthier, because we buy it from farmers we know).
10. Organize your recipes. When they're all easy to find and your kitchen is easy to figure out, you're more likely to cook, and less likely to call for pizza!
11. Keep track of what's in your pantry and--here's the important part--actually eat it. Often we go to the grocery store and buy stuff we already have. Make it a challenge to eat through your cupboards. The average family has $275 in groceries in their house at any one time. If you need to save a few hundred dollars this month, then, just eat what you already have.
12. Cut your meat yourself. Buy whole chickens and chop them up. Buy big cuts of beef and then cut them for stir fries, stews, etc. Cut it yourself and it's cheaper.
13. Get food free! Find out when restaurants throw stuff out, and ask to have it. One woman wrote that she found an Italian restaurant that routinely throws out fifty pounds of pizza dough every Saturday night. So she collects what she wants, and the family has pizza pockets, pizzas, and more!
That is the accumulated wisdom from these blog readers! Hope that helps you! Now go get your recipes and pantry organized, and write a menu plan for the week. And good luck! You can do it!
A few weeks ago Mary Ostyn joined us! Mary is the mom of a busy family of 10, and she's written a number of books on how to juggle that many kids and still have an awesome family life.
One of the things that I'm always amazed at in our Twitter conversations with all the friends I have is how many of you moms out there are so frugal! You know where to get the best deals, and you know how to stretch a dollar. So you're going to really appreciate this interview today. So let's get started.
Mary, you’ve written a book that many of my readers will just drool over, called Family Feasts for $75 a Week. Are you serious? Can you feed that many that cheaply without resorting to all lentils and dried beans?
The $75 a week quoted in my book is for a family of 4. With 10+ people to feed, I spend more like $200 a week. But most of them eat like adults—I don’t think many people could feed the numbers I do for that amount. And we eat really well—lots of good tasting food, lots of variety. I could get by on a little less if we needed to—in fact, one month every year I challenge myself to spend as little as possible. Last year I fed our whole family for a month for $350. But it would be hard to feed that many people every month for that cost, and I don’t think our diet would be as varied
I think if more people realized that if you plan your meals and plan your shopping, you could live for so much less, there would be less of a need for two incomes. Do you think that groceries is one of the main ways that people throw money away?
Absolutely. If your budget is tight, look at your grocery spending first. I wrote my book to help the ‘average’ family waste less money. But I’ve had confirmed tightwads tell me they learned new tricks from my book. I think that just goes to show that most of us could be spending less, whether we realize it or not
I have to admit, Mary, that I have expensive tastes. I like salmon, but it ain’t cheap. What do you do with foods that you just can’t afford? Do you ever treat yourself?
I love salmon too, and I splurge once a month or so. (It’s generally cheapest in the freezer case, by the way!) The trick is to balance your splurges with affordable meals. For every splurge meal I serve 2-3 vegetarian or almost-vegetarian meals. For example, potato corn chowder and pasta carbonera can both be made with a dollar’s worth of bacon, and yet the flavours are very rich and satisfying.
Another trick is to incorporate a flavor you love in a more affordable form. We eat steak maybe 4 or 5 times a year – it’s just too expensive to be a regular at our house. But I make a wonderful steak fajita with caramelized onions and bell peppers, served in flour tortillas with salsa and sour cream. That meal offers the flavour of steak for half the cost
Restaurants are so expensive, especially with large families, but it’s hard to cook all the time. Do you have a plan so that on those nights when you just want a treat or a break, you can get one inexpensively? Do you make up frozen meals for that purpose, or do you have another trick up your sleeve?
I love to cook, but I have days where I’m burned out too. At least once a week I make a pot of soup big enough to last two meals. Once a week I also double a casserole recipe, and stick the second one in the freezer. I try to have 2-3 casseroles in the freezer all the time, for variety.The crock pot can be a time saver on a busy day. And almost every meal, I make 2 or 3 servings extra. Then a couple times a week I serve ‘pot-luck’ for lunch. I pull all the leftovers out of the fridge and let kids pick what they want to zap in the microwave. Like you mentioned, planning really is at the heart of keeping the grocery budget in check.
You have a daughter who is married now. Is she frugal, too?
I think so. Once before she and her husband were married, they went to the store for candy. They opted for the bulk food bins and their entire purchase totalled 37 cents. I laughed when they told me that story. Of course that they’re buying more than candy they’re spending more. But they’re doing a great job being careful with their money. Last summer Amanda canned fruit and made jam. And she’s always trying out new recipes, expanding her repertoire. I think that’s a big key to being content with eating at home: mix it up, keep it interesting, both for the cook and for the rest of the family.
I know you'll love this book! I'm excited to get my hands on it, and Mary has generously offered one as a prize to a commenter! So leave a comment, and in one week, on April 12, we'll draw for a winner!
While you're busy leaving a comment, though, why not leave us your favourite frugal grocery tip, too? I have a couple that I'll leave for you:
1. Don't buy cereal. It's horrendously expensive. Make up your own pancake mix, or choose smoothies for breakfast instead.
2. Make lots of soups. They last a long time, and you can use leftover meats to fill them out. They're cheap and filling! We often do a potato-leek soup with homemade buns and salad as a vegetarian meal.
Now, what are yours? And good luck on the contest!
UPDATE: Do read the comments! Great tips there! Here's a really good one from Charline, that I try to emulate, too:
I cook something big and prepare extra potatoes, then I stretch it as long as I can by using everything up in very simple recipes. For example: Roasted chicken with sides of potatoes and carrots on the first night; using the liquid, some leftover chicken (with fresh potatoes), I can make a soup; using half of the leftover potatoes (with cream corn and hamburg), I have sheppard's pie; using the second half of the potatoes with leftover chicken and carrots, fried together in a pan with salt and pepper, I have what we call hash; and then with whatever chicken that's left, we can make sandwiches. So, with only a few extra ingredients, a very large meal can make an additional 4 to 5 meals.
Now read the comments, and remember to leave one if you want to win!
Every Friday my syndicated column appears in a bunch of newspapers in southeastern Ontario. I'm posting this week's a day early because tomorrow is Good Friday. So here it is, based on a blog post from last month. I hope it inspires people to start saving!
Let me give you the stories of two men. One we'll call Jim. He married straight out of high school—rather an anomaly today. He didn't go to college, but immediately took a job at a financial planning firm in Windsor. He became certified in investments, and worked his little butt off building his own client base. He looks about 12, but he always dresses impeccably in suits.
Jim’s first child was born two years ago, when he was about 20 or 21. Today his family is still doing quite well, despite the economic downturn. They’re saving up for a downpayment on a house, building their little nest egg at a time when most men his age are still living in their parents’ basement. At one point Jim would have been quite typical; today he sounds like a dinosaur.
Now let's talk about Bob. When Bob was Jim’s age, marriage was the furthest thing from his mind. He concentrated on working as little as possible so that he could play as hard as possible. He took extended vacations to the Caribbean so he could scuba dive, renting apartments with other twenty-somethings. He lived a carefree life until well into his late thirties, working odd jobs, minimizing his income and maximizing his fun.
At 38, though, he met the woman of his dreams and settled down. They’ve since had three kids, and while both he and his wife are working, money is tight. They’re starting almost twenty years after Jim did, and neither of them used those in-between years to shore up any sort of nest egg.
Many people just don't worry about saving when they're single. But in the long run they do themselves a disservice, because when they do marry (if they do), they've lost about a decade or so of good earning years and saving years.
Now 44, Bob is juggling saving for a house, putting money aside for his kids’ education, and contributing to an RRSP. He’s in a really difficult bind, because time is no longer on his side. He has to put money into an RRSP if he’s going to have anything at retirement, but he also has incredible family expenses right now, too.
One thing Jim teaches his financial clients is that if they save $2000 a year in a retirement account from ages 19-26, as he is planning to do, they can then afford to stop for a bit and save up for a house. If you wait like Bob did, though, and don’t start contributing until you’re in your late thirties, putting in $2000 a year until you’re 65, guess who has more money in the end? Jim does, even though he actually contributed far less. That money has more time to accumulate and grow! It's starting early that makes all the difference.
If you’re in your twenties right now, even if you don’t have a family of your own, chances are one day you will. And if you want the rest of your life to be much less stressful, squirrel away money for a house and retirement now, before you need it, to avoid feeling the crunch later. I know cash is short when you’re in your twenties, but you don't need a big-screen TV. You don't need to eat out every night. You don't need all the latest gadgets. It may seem like responsibility is a long way off, but think instead of these years as the breather years. You don't have any major expenses, so now is the time when saving is actually the easiest. Don't just coast through life until responsibility hits. Act responsibly now, and you'll be so much more comfortable in the end.
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One of the strongest messages in our culture is "You'll be happy if only you buy this." And it has a twin sister who says the same thing, just backwards: "the reason you're not happy is because you don't have enough. So go shopping!"
Everything in our culture revolves around shopping. Magazines try to sell us stuff. TV shows are punctuated by commercials. Movies have product placement. And even when there aren't specific ads, the people are so beautiful that we want to buy what they have, just so we can be that successful, too.
It sure is hard on one's wallet. But even worse, it's hard on our hearts, because what culture really sells us is dissatisfaction. You can never be completely happy because if you were, you wouldn't need anything. You'd have no need to shop! Hence, they have to make you unhappy so you'll head to the mall!
If you're a mom trying to make ends meet, it can be frustrating. And often we spend months scrimping and saving and depriving ourselves, and then what we want more and more is to splurge on something. We deserve it! And it doesn't seem fair that we should always be the ones losing out.
It's funny that we should think that way, because in reality, most young couples with kids who have big homes and vacations and new clothes are heavily in debt and bordering on bankruptcy. You're probably in better financial shape than they are, if you are watching your pennies and budgeting for stuff. But television rarely shows people living in small homes with hand-me-down clothes. I'm amazed at the shows and movies I watch where people with a relatively low-income job still live in a huge house. It's unrealistic. They're the ones who are wrong, not us!
So how do you come to the point where you can be happy with fewer things, but more time with family and less stress about money? How can we find peace without materialism? There's a (surprisingly) good article here at wiki on it, and let me share with you a few of their points.
1. Limit television, movies, and news watching, because it will make you feel inadequate.
2. Don't go the mall for fun.
3. If you want something, make a 30-day list. If you still want it after 30 days, and think it's worth the money, talk to your spouse about it and then decide whether or not to get it.
4. Make a gratitude list instead of a shopping list
.
And there's so much more! I, of course, would add prayer and reading Scripture, because it focuses your heart on what's really important. Even just play praise CDs throughout the day to keep your mind thinking about God.
But now I'd like to ask you: how can you defeat materialism? Leave a comment, and let's see if we can make our own lists!
Let me give you the stories of two men. One we'll call Jim. He was homeschooled, and married at 18. He didn't go to college, but immediately took a job at a financial planning firm. He became certified in investments, and worked his little butt off building his own client base. He looked about 12, but he always dressed in suits and always looked very impressive.
Their first child was born when he was 20 or 21, I think. As far as I know, even in this economic downturn he is still doing well, trying to provide for his family and grow their nest egg.
Now let's talk about Bob. Bob wasn't married, and so he didn't worry too much about how much money he was making because he didn't have a family to support. He didn't have many expenses. He just earned a small pay and lived quite comfortably himself, until he married when he was quite a bit older. As soon as he married, he began earning more and doing better for himself. But had he worked hard and demanded fair pay when he was 22, he would be in a much better financial situation today.
Many men just don't worry about saving for retirement, or getting a house, or becoming stable when they're single. Single women buy homes; single men tend to live in apartments because they don't care as much. But in the long run they do themselves a disservice, because when they do marry (if they do), they've lost about a decade or so of good earning years and saving years.
Dr. Helen, who is not a Christian, has an interesting post about how many young men are eschewing home ownership altogether. The comments, many from those same young men, are very insightful into how that younger generation is thinking. Basically: why buy a house when taxes will just eat it up? It's women who want the houses anyway. Let them worry about it.
There is so much wrong with this it's hard to know where to start. I understand their feelings, but it's not healthy for society. I suppose if they never were to marry it would be fine, but lots of men at 23 or 24 don't really think of themselves as marrying. It seems so far off. Chances are, though, that they will eventually tie the knot, and I don't think you should squander those years when you could potentially be saving.
My mother taught me while I was a teenager to save for retirement and to save for a downpayment for a house, and I did. One of the best services we could do for our kids is to teach them that if they start saving when they are young, life is so much easier in the long run. It is hard to start saving for retirement at 45. It is so much better at 25. I know cash is strapped at 25, but you don't need a big-screen TV. You don't need to eat out every night. You don't need all the latest gadgets. It may seem like responsibility is a long way off, but think instead of these years as the easy years, the free years. You don't have any major expenses, so now is the time when saving is actually the easiest. So save. Be responsible. Don't just waste your life away until responsibility hits. Act responsibly now, and you'll be so much more comfortable in the end.
I remember reading about retirement savings like this: Take two individuals, and we'll call them Jim and Bob again. Jim saves $2000 a year in a retirement account from ages 19-26, and then he stops, because he wants to buy a house. Bob, on the other hand, doesn't start saving until he's 26. He puts in $2000 a year until he's 65. Guess who has more in the end? Jim. It's starting early that does it for you, because you have that extra time to earn more return.
In the same way, I figured out one year that if you put away about $5000 into a retirement account at the birth of a baby, that is all that would be needed to fund their retirement, because by the time they retired, it would have earned so much return. The problem is that when a baby is born, you usually don't have $5000 lying around (and you usually can't contribute to a tax-free retirement account until you yourself have income).
But we've got to get smart about this. Let's be honest: government deficits are huge right now, and the biggest item on government expenditures is all the transfer payments to individuals: health care, social security, etc. At some point there just isn't going to be the money for all of this, and it will collapse. And the generational cohort above us, the Baby Boomers, are so numerous that they're the ones who are going to cause it to collapse. That means that our generation, the generation that is 25-40 right now, is going to be pretty much on its own when it comes to retirement. Do you really think you're going to see much of your social security (or CPP in Canada) dollars? I sure don't. Governments ultimately just don't have the money, and you can only print so many dollars before inflation takes over and the dollar isn't worth anything anymore.
So it's up to us. And that means we have to think smart now, while we're young, and while expenses are high. If you want until you're 45, it is so much harder to fund your retirement. Even if you're only putting away a few hundred dollars a month, in the long run that can really grow (and now's a good time, because the stock market is relatively low).
So don't worry about buying new furniture. You can buy that when you're 45 and the kids are older and won't wreck it anyway. Don't worry about new cars. Don't worry about big TVs. Save some money. And teach your kids to save some money while they're young. Don't let them waste their 20s, even if they're not married yet. They need that time, and we're all going to have to learn to be a nation of savers, because the safety net is going to be awfully small by the time we need it.
A while back we had a long conversation on this blog about the cost of working. If you've got little kids, we asked, and you have to pay for childcare, then does working outside the home even contribute to your income in a substantial way?
For instance, one of the things that stay at home moms can do is to figure out how to live on less. We do have more time to do things like cook from scratch, make our own gifts, spend more time shopping for bargains, etc. We can only have one car, even though that may mean chauffeuring hubby to work so we can keep it for the day. I also find that when I'm tremendously busy, either because of speaking or because of events with the kids, it's harder to make dinner. That's when we go out or eat prepared foods, which adds to the budget. I know if I were working full-time I'd do the take-out thing more often, and so that would become more expensive.
Therefore, I'm not sure it always pays to work, depending on your potential income. But what do you do when you just really need money? I want to throw this question out there, because several of my long-term readers really need answers, and I thought together we could come up with something.
So here's the scenario. You aren't highly educated, and the maximum you could probably make would be $15/hour, and that's if you hit the jackpot. But you really need to bring home about $1500 a month just to make ends meet. So what do you do? Here are some choices that I see:
1. Work part-time. It sounds silly, but part-time work may be able to bring in more money. When you're not paying for childcare because your husband has the kids, and when you can still live on one vehicle, part-time work may actually leave more money in the wallet. Work two nights a week and Saturdays. Be a waitress, or work at a call centre or something. The disadvantage: you never see your husband. You don't really have family time. So I'm not a big fan of this one.
2. Sell Mary Kay/Tupperware. I'm not an overly big fan of this one, either. I've gone down that route briefly, and gone to all the sales conferences, and gotten all pumped up to sell stuff, and become a leader, and have people work under me, but it just doesn't work that well. You can work so hard at it for a few years and still have little to show for it. It works great for some--but for the majority it doesn't. And you spend your life out at nights and trying to convince women who don't really want to go to parties to go to just one more. Let me know if you think differently, but I know one of the women who needs money advice has already tried this and won't do it again.
3. Become a foster parent. Don't balk at this one right away. I'm not saying we should do it for the money. I don't know what all jurisdictions pay, but in mine, if you take in two kids you make up that monetary gap we were talking about. It's a lot of work. It's a big sacrifice. You have to define your boundaries. But if you are willing, it has a lot of upsides. You're really making a difference. You're living out your values. You are still able to stay home and be with your own kids, and if they're in school, you're able to get them on and off of the bus or be there for their field trips and sports games. You have to be careful who you take, but this can be an option for some, and given how desperate they are for good foster parents, perhaps it's one more of us should consider (even forgetting about the money!). Any foster parents out there? I'd love for you to comment on this option!
4. Help your husband to make more money. After all, you need more income. It doesn't really matter who gets it. So how can we help our husbands boost their incomes? Can we help them start a business? Can we help them with that business by doing some of the work at home? Can we support them going back to school for a time to get more training? Any thoughts on this one?
5. Save more money. The other way to make money, of course, is simply not to spend it. If you've got a major shortfall, look at what you can change in how you spend money to perhaps make some of that up. That's not always possible; I know a lot of people are already living pretty close to the bone. It's just a thought.
6. Start your own business. Lots of people are doing it. Sell on e-bay. Turn a hobby into a business. Especially at Christmas it's easier to make some money. Any concrete suggestions here?
So what do you all think? What's the best way to boost income when you want to continue to stay at home with your kids? And if someone absolutely had to get a job, any suggestions on what kind of job to get?
By the way: an anonymous commenter took offense at my post a few days ago, saying that I was denigrating working moms in my "stay at home mom" rant. I addressed that in the comments, but in case she doesn't read them, let me just say again: I didn't mean the post against working moms. I had no idea it would be taken that way. I meant it against PEOPLE in general. In fact, the specific individuals I was thinking of aren't moms at all. Several are male. So I'm sorry if you were offended, but I really think it was just a misunderstanding.
Over at Townhall.com this morning, I read a tongue-in-cheek column by Rachel Marsden on men's underwear purchases being an indicator of the recession. The theory goes like this: when money's tight, men will let their briefs get tight, too. And holey. And frayed. No one sees them anyway, so they'll stretch out their purchases.
This has some logic to it, since my husband doesn't really care about the state of his briefs. But the problem with the theory, in my mind, is that MEN DON'T BUY UNDERWEAR. At least my husband rarely does. I buy it for him, usually at a discount store.
In fact, my husband doesn't buy much clothing at all. I think that's true for most men. They let their women dress them, if they're smart. When we were married Keith had these disgusting pair of grey sweatpants that he had worn since he was 14. They were one of the first things that went in a bag to the Salvation Army. Of course, he was angry, because they were COMFORTABLE. But they were also gross. And bit by bit, I replaced my husband's entire wardrobe.
So for underwear to be a sign of the recession on a large scale, women would have to decide not to buy men's underwear. And I'm not sure we're at that point yet.
But Marsden makes the point that what a recession is good for is teaching us to shop smarter. We don't buy all the Starbucks we used to because we realize McD's is cheaper. Or we can just make our own coffee and carry it in a thermos. We don't buy bottled water when the tap stuff tastes fine.
I have to admit that our family is not really hurting from the recession. My husband's job is very secure, and my income is fine. But one of my practices every September is to re-evaluate our family's budget and figure out whether we're really on track. And one place that we fall short is eating out. We don't buy a lot of clothes. We don't have expensive hobbies. But we do eat out too much.
One of my resolutions, then, is to keep the house stocked with things that are easy to make for lunch and dinner. And to stop us from ordering pizza or going out, I'm going to start buying some frozen meals. I didn't used to before, because as a rule I'm against them. They're not healthy, they're expensive, and they don't taste as good as my own cooking.
But often the reason we go out is because I'm too tired to cook, or we're pressed for time. If we had frozen meals, I'd make them. And $4 a meal is a lot cheaper than $12 or $15 at a restaurant, plus drink and tip. Especially now that my girls are starting to order off the adult menu.
The trick, of course, is to save those frozen meals for emergencies, and not just make them because they're easy, but so far it's working out quite well. I also cook double quite frequently and freeze the excess, too, so my freezer is well stocked. But what I'm finding is that while my grocery bill is going up, my restaurant bill is going down.
And Keith's underwear is still pretty hole free.
What about you? Where have you cut back? Where do you think most of your money is wasted? I'd love to know!
Okay, maybe that headline is a bit of an exaggeration.
But I face a dilemma when it comes to parenting. Most of us hope that our children will surpass us. That they will be more successful, more leisured, more content.
While the more content part is always possible, the fact is that in my family it is very likely that we have reached the pinnacle of wealth. As a physician, my husband makes a very good income. We do our best to save a chunk, give a lot away, and live in a nice but still upper-middle class home. We don't have a cottage. We don't have a boat. We don't have first class furniture.
But it's very unlikely that my children will have this kind of income. It's far more likely that they'll struggle to get by, like everyone else, and like we did when we were starting out.
So one thing I've always been conscious about in my parenting is to teach my kids how to be frugal, and how not to expect that money will always be easy, or that they can always buy whatever they want. Here are some of the ways I've done this:
1. Start Allowances Young
When the girls were three, they started with allowances. They earned $1/week per year of age, which they had to divide up as follows: 10% tithing, 30% spend now (usually chocolate), 30% save for something they want, and 30% university. They do that with every bit of money they make, even today when my oldest makes a lot from baby-sitting and selling homemade jewellery.
And with that came the responsibility for buying their own treats. They've had to buy their chocolate bars and their ice cream cones. Sure we've bought our share, but on the whole, they know not to ask me for candy. If they do, I always reply, "did you bring your money?". That way they learn the value of money, and that they need to think about what they spend their money on.
I have a whole chapter on teaching kids good responsibility with money in my book, To Love, Honor and Vacuum! Do you have it yet? If not, you can get an autographed copy here, or get it from Amazon:
2. Start Clothing Allowances Young
When my oldest turned 13, she received her clothing allowance. Now she has to keep track of her money, and all the things she'll need to buy this year. I sat down with her in January of that year (her birthday happens to be at the beginning of the calendar year, so it's handy), and we went over all the items of clothing she'd need. I paid for the basics: a certain number of pairs of pants, certain number of shirts, dresses, etc. And I didn't pay a lot of money, since often we buy at thrift or second hand stores. So I gave her an allowance of about $9-$10 a shirt, for instance, not the $20 that it can cost new in a store.
And then I handed her the money. And she made it last! She's not doing as well this year, but then, she's also making her own money, and soon she'll have to dip into her own to buy her clothes. And that's fine, if that's where she chooses to spend her own money. At least she's learning how to budget!
3. Charity is Non-Negotiable
I suppose it's strange to say that we "force" charity, but we always have. We've demanded that they tithe, and every Christmas one of our rituals is poring over the Christmas catalogues we get from charities and dividing up the remaining charity money for that year, both theirs and ours. We pray over the needs and send it out.
And what I've found is that the girls are becoming generous on their own. Rebecca has frequently given away all the money in her wallet to a friend on a missions trip, or an appeal. And she's done it cheerfully. When you raise them from the beginning to understand that it's not our money, it's God's, they have a better attitude. We've also been to Kenya with them twice to help them to see what an African orphanage is like, so they know how much we have. And I think they get it.
4. Buy Second Hand
We buy everything second hand. We buy clothes second hand (not always, but we do check the second hand stores first). We buy cars second hand. We're bargain lovers! We don't need to be, but even if you have the money, why wouldn't you try to save? It gives you more to give away!
And then the girls learn how to find a bargain when they're older.
5. Cook Cheaply
One of my favourite things is teaching the girls how to cook (I began when they were 10) and helping them to figure out how much different meals cost. At every dinner we often have that discussion: how much was this meal per person? It helps them to see which is an expensive meal and which is not. It also helps them to see how expensive restaurant eating is (and that's the big failing I have as a parent. We eat out way too much). But I love cooking with leftovers, making casseroles and homemade soup. And then they see how cheaply you can get by! I have visions of them in university feeding a whole pile of friends because they'll be two of the few who can cook, and they'll know how to do it inexpensively!
What tips do you have about teaching kids about money? I'd love to know! Leave them in the comments!
About Me: I'm a Christian author of a bunch of books, and a frequent speaker to women's groups and marriage conferences. Best of all, I love homeschooling my daughters, Rebecca and Katie. And I love to knit. Preferably simultaneously.
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