How I Am Financially Motivating My Children

kids and money children and money The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

Do your kids get an allowance?  If you’re like most parents, they probably do.  According to a study by the American Institute of CPAs, “61 percent of parents pay an allowance” with the average allowance totaling “$65 a month, or $780 a year.”  I was a bit surprised by how much kids receive on average every month.  Even more surprising, “only 1 percent of parents say their kids save any of their allowance.”  That’s a lot of dough to blow through every month.

One of my desires as a parent is to teach my kids to be smart money managers.  I do use a chore system to pay their allowance and have them save a portion.  Over the years we’ve experimented with different chore/allowance systems, but finally, I’ve found one that works perfectly for our family.

 

What We Used to Do and Why It Didn’t Work

For years, we’ve had a chore chart for our ten year old son.  We decided on a mix of chores he does because he’s part of the family (i.e., these are unpaid) like clearing the table when he’s done eating to chores like cleaning the bathroom that are paid.

We used to have a chore chart where he earned money based on the difficulty of the chore–making his bed paid 25 cents, while cleaning the bathroom paid $3.00.  I never forced him to do chores.  If he didn’t want to do his chores one week, he wasn’t paid.

Let me tell you, there were quite a few weeks when he didn’t do many chores and only earned a dollar or less.  When he wanted to buy something, he’d suddenly diligently do his chores.

While this system saved us money on paying out for chores, the fact is that he is a part of our family; he’s one of five people in our family making a mess every day, and if I didn’t want to live in a messy house or didn’t want to do all the household chores myself, I needed him to share some of the household burden.

We needed a new system.

 

The New Chore/Allowance System We Love

This summer I reread America’s Cheapest Family Gets You Right on the Money by Steve and Annette Economides.  I took particular interest in their chore system.  For their children, each child had the potential to earn 4 allowance points a day.

I modified their system a bit.  This is what I came up with for our kids:

Morning Point–The kids get this point if they make their beds, get dressed, brush their teeth, put the dirty clothes in the laundry, etc.

School Point–The Economides homeschool like we do, so their kids got this point for doing their schoolwork without having to be nagged and having a good attitude.  If a child isn’t homeschooled, he could get this point for completing homework and working hard in school.

Chore Point–Depending on age, a child has to complete a set number of chores every day.  For instance, my 10 year-old has to complete 3 chores while my 4.5 and 6 year-olds only need to complete 2 chores a day.

Round Up Point–At the end of the day, everyone finds 3 things that have been left out to put away.

In addition to these basic points, the kids also have the opportunity to earn a bonus point each day.  I give these bonus points if the kids treat one another nicely, help out if they see someone needs help, or choose to do an extra chore or two.

If kids get at least two bonus points a week in addition to earning all of their regular points a day, their earnings are doubled.  The Economides compare it to an employee who goes above and beyond at her job and is rewarded with a bonus or a pay raise.  The lesson here is that hard work is noticed and rewarded.

For chore point, they can choose between age appropriate activities that I’ve written out for them.  For instance, my 10 year old can choose three chores for the day from a list that includes:

  • Clean, sweep and mop bathroom
  • Sweep the front sidewalk
  • Change the cat litter
  • Empty the dishwasher
  • Vacuum the living room, etc.

 

Why This System Is Working

I was initially surprised this system works because the pay is much less than I was paying with my other chore system.  My son gets 15 cents per point, so if he gets two bonus points in a week and can double his money, the maximum he can earn is $9.00.  Yet, he’s much more motivated with this system.  I think it’s because he knows he has to get all of his points each day if he wants the chance to double his money.  (He loves having the chance to double his money.)

Another key to his motivation is that he can choose his three daily chores from a list of 8 to 10 chores.  With the old chore system, I think he got bored doing the same chores over and over.  He can switch his chores up every day now.  (In fact, I encourage him to switch them up.  So Monday he might vacuum the bedrooms, but he won’t do that again until later in the week.)

 

Motivating Him to Save For College

The possibility to double his money is working so well that I decided to experiment.  If I offered to double his money for college savings would it work?

My husband and I, for the last few years, have been in no position to save for college.  Our plan is that our kids will go to college at the university where my husband is employed so they will get greatly reduced tuition.  Yet, we still should be saving in case they don’t want to go to the college where my husband works.

I told my son that whatever he saved for college each week, my husband and I would match.  I didn’t know how much this would motivate him since for a 10 year old, 18 is a lifetime away.  However, it’s worked better than we had planned.

 

Opening the Door to Financial Discussions

Now that he has the match in his mind, my son is frequently asking me financial questions.  Where will his money go when he’s saving for college?  This allowed me to talk to him about investing and earning interest on investments.

We also discussed saving for retirement and that the younger you start saving the more you can have in your retirement fund thanks to compound interest.  He finds it fascinating that he can save for retirement at a young age with less money and have more in his retirement fund then someone who puts large amounts of money in a retirement fund starting in her forties.

I can see the wheels turning in his head.  Yesterday, he asked me if he put $50 in his college fund, would I still match that?  If he put in $250, would I match that?  Of course I will.  I’m delighted that he’s thinking like this, and I hope we are putting him on a path to financial independence.

How about you all? What have been your best strategies to teach your kids about money and educating them on smart financial decisions?

Share your experiences by commenting below! 

***Photo courtesy of I’d Pin That

Ever Thought of a Career Opportunity Abroad?

The following is a guest post. Enjoy! 

The Small Print

According to the Isle of Man government website, those who have been educated or have lived on the island for more than five years will have priority for employment on the island. Employers on the island may employ workers from outside the Isle of Man from the EEA, only in the event that there are no current residents who have applied and meet the requirements for the job.

But regardless of whether you’re a current resident or not, what does this tiny island have to offer career wise?

Technology Companies

Unlike traditional companies, which require a permanent establishment (PE) to conduct their business, such as a shop or hotel, technology companies are based online and therefore have a geographic spread of customers and staff. As tax systems look to the PE and ‘Management and Control’ of a company to calculate corporate tax, there is no need for technology companies to base themselves within areas of high tax jurisdiction. The Isle of Man is therefore a popular choice for technology companies to base themselves and benefit from the tax advantages.

The growing number of technology companies on the island has therefore opened up a new line of career opportunities, and as they often require specialised skill sets such as Internet marketing, SEO and programming it is not uncommon for them to look outside of the island for suitable employers. Antonio Moritz, from Douglas based tech company Annexio, believes that there is far less competition on the island for these specialised jobs and therefore those overseas should consider the Isle of Man to further their career in the industry (checkout an ongoing Annexio vacancy here).

Tourism

In 2012, the Isle of Man welcomed 294,460 visitors keen to relax in peaceful countryside, explore the island’s wildlife, from wallabies to basking sharks, dive ship wrecks, sample fresh seafood and explore the Island’s Viking ancestors. The range of outdoor, cultural, historic and annual activities has seen tourism figures increase year on year, opening up an array of career opportunities for current and prospective residents.  According to government data, there is a typical demographic profile of tourists: 75% of visitors to the island are over 45 years and 70% of tourists have visited the island before.

Career paths in the Island’s tourism industry include anything from marketing to hospitality and management. So whether you want to become a diving instructor, organise events or run a b&b, there are plenty of options.

Food and Agriculture

75% of the Isle of Man’s land is used for agriculture with farmers producing around 29,085 tonnes of food each year. The majority of livestock on the island are cows (used for beef production) and sheep (used for wool as well as lamb meat). Although the Isle of Man is not in the EU, 60% of its red meat and milk is eligible for European and international trade. The islands other exports include oats, seed crops, red wheat, oilseed rape and linseed.

As most of the island’s farms are passed down through families, job opportunities in the farming sector do not come up frequently. As the island’s population is only 80,000, there is also limited opportunity for local trade. However, with the introduction of the Isle of Man Food and Drink Festival, and a growing number of excellent restaurants on the island, the food and agriculture industry does benefit from the island’s tourism. There are therefore career opportunities in the hospitality sector (restaurants).

How Much Money Do You Need to Be Happy?

psychology of money The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

In our society today, there is always a wanting for more. You may live in a house that is perfectly fine for your current needs, but that house up the road that has 500 extra square feet with a pool in the back just looks so much better! Surely everyone would be happier with more amenities and more space, right? Well, not necessarily.

 

The Research Regarding Money

According to the research of Forbes magazine, the standard amount for happiness is around $75,000. Those that earn more than this really don’t gain much from their extra income. They still have a nice house, but maybe it’s just a little bigger. They might still own a boat, but it has a few extra feet on the front. And, they still receive (and can afford) a valuable education. Extra money beyond the $75,000 amount is merely spent on extras that truly don’t provide much more in the way of happiness.

 

Why Is It That We Always Think We Need More?

So for those of us that have read this Forbes article, we can buy the fact that happiness does not increase greatly after that $75,000 mark, but why then do all of us continually strive for more?  Why are we all spending our precious time to acquire more and more money, which in turn buys us an increasing supply of stuff?

This is the question I have been asking myself lately, and I think that it’s an important question for all of us. Sure, it might be nice to earn more money than we have right now, but how much money do each of us really need to be happy? And how do we decide what this amount is for us?

 

The Quest for Understanding Your Happiness

It is easy to think that additional money would make you happy. Instead of going out to eat once a month, you could eat out every weekend. Surely, this would increase your happiness right? Or what about that new car that you have always wanted? If you were able to buy those new wheels, life sure would be sweet wouldn’t it? Then you would be happy! Honestly, I really doubt it. An increase in stuff will not make you happy, and the earlier you realize this the better.

If you are anything like me, when you talk to others, you are not talking about your recent money-making quest or about your big raise at work. No, you are talking about your wife, your kids, your experiences, and the fun things you have done in life. Relationships and experiences are what creates happiness, not money.

So how much does it cost to have these relationships and to create memories through experiences? Honestly, it doesn’t cost that much at all. I currently earn quite a lot of money (in comparison to the average family), but I only find myself spending about $25,000 a year. I travel, I give, and most importantly, I spend a large part of my time with those that I love. In the grand scheme of life, money does not play that large of a role in my overall happiness. As long as I am able to buy the necessities without stress or worry, and I have a little extra to have some fun once in a while, I can really be quite happy.

What about you? Do you always feel like you need more money to be happy? Perhaps you just need to change your perspective!

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/marinadelcastell/8916590367

5 Money Lessons You Only Learn In Your 60s         

The following is a guest post. Enjoy! 

From splurging on holidays to paying for university fees and student bank loans, spending whilst we’re young doesn’t seem to matter too much at the time but it can drastically affect our bank balances later in life.

Here are five money lessons which you are only likely to learn once you’re in your 60s. As this article from McCarthy & Stone shows, you’re not old until you’re 90 so you’ve got plenty of time to take heed of these lessons and whip your bank balance into shape!

  1. How to manage your finances online

If you’re still learning how to manage your finances then now may be the time to start saving ‘properly’ for the future. A huge number of people in this day and age will work well into their retirement and those still in employment after the age of 60 may like to take this opportunity to manage their finances online.

Speaking to an advisor at your local bank is a great place to start as he or she will be able to tell you a little more about the best ways to save for your future. The best thing about modern day banking is that it can be managed at the click of a button.

  1. It is never too late to learn something new

More individuals than ever before are treating retirement as the start of a new life as opposed to the end of an era. Both learning new skills and accepting new challenges is certainly one way to enjoy later life. It’s also a great way to earn a little extra pocket money post retirement.

  1. Get what you’re entitled too

When you reach a certain age, there are innumerable benefits, grants and extra payments available. Such payments help towards everything from the weekly shop to fuel bills and further study. If you’re not receiving any of these extra grants at present then now is the time to suss them out.

Certain insulation companies may even offer those on a low income free boilers, and cavity wall and loft installation for no charge, so it’s worth investigating.

  1. I should have started saving sooner

Once you reach the age of 60, it’s important to consider a retirement plan. You may be a few years off from retiring but despite this, having a plan in place is a must. You may quickly begin to realise that you should have started saving sooner. Just because your retirement is coming up, doesn’t mean payments for your household bills, child’s study fees and car insurance will suddenly cease.

  1. Saving trumps spending

Even after realising your savings fund is a little overdue, it’s never too late to start. Instead of spending each and every day, learn to stick to a budget and enjoy the rewards. By eating out rarely and only treating yourself on the odd occasion you will make these perks more meaningful and boost your savings to support your future – what’s better than that?

You can find more tips like this by clicking on this great article on 12 things learned after being made unemployed when aged 60 or over.

Re-Energize Your Marriage Without Spending a Dime

relationships marriage couples and money The following post is by MPFJ staff writer, Catherine Alford. Cat is a freelance personal finance writer who blogs at www.BudgetBlonde.com

If you want a way to pep up your marriage but don’t have a lot of extra cash at the moment, here are some ideas for getting back on track without breaking the bank.

 

Learn Something New Together

We often get bogged down in a routine, and I find the older people get, the less inclined they are to learn something completely different and new. Sometimes we get stuck in our ways or stick to what we know, but the truth is, there are so many things out there that you can do with your spouse that will enhance your own life and each others. For example, maybe you can learn a language together. Practice together and quiz each other. Then you can promise each other that if you get really good at it, perhaps plan a trip to France or Spain or Costa Rica and try out whatever language you learned.

You could also learn to play tennis or golf or scuba dive. When my husband and I learned to scuba dive, I was absolutely terrified. He went down in the water first and I just couldn’t do it. I started crying with the instructor on the surface of the water.  The instructor then went down to get my husband to ask him to come back up and help me. He calmed me down, told me it would be okay, and then held my hand so we could go down in the water together. Sometimes overcoming fears together is a great way to reemphasize the trust and compassion you feel for each other.

 

Watch Your Wedding Video

The last time we watched our wedding video, it was so sweet and romantic. I want to start a tradition where we watch our video every year on our anniversary with our kids. I think it would be fun to have our kids see us so young. It’s only been a few years, but I feel like both my husband and I look so different. Anyway, there’s just something sweet about watching the moment when you got married again. I’m so glad I got the video. It’s actually one of the best things we purchased in all of our wedding expenses.

 

Take a Long Walk

Fall is the perfect time to get outdoors. It’s hard for my husband and I to go anywhere because it literally looks like we’re packing for a three day trip with the amount of things we have to bring for our infant twins. Still, we always feel good when we get out the house and get some fresh air.  It’s a great way to work out arguments or have tough conversations because usually when you’re outdoors, you tend to remain more level in your conversation, and you feel a little better being surrounded by nature.

 

Try to Date

Dates are still expensive when you’re married! I see a lot of couples trying to commit to a date night, and while that seems really nice to me, it also seems really out of my budget. So, one way to still have date night without the expense is just to have it at home. You can plan an entire date with a movie and a certain dinner that you can make for your spouse or together. If you have kids, you can do all of this after they go to sleep. It takes a little bit of thought, but it’s something they will really appreciate. There are even entire websites devoted to thinking of fun date ideas you can do at home with your spouse. I love anything that means re-energizing a relationship without having to pay a huge expense.

 

Talk It Out With Friends

I think sometimes we often think our frustrations or issues with relationships are unique to us. Just the other day, my husband and I were hanging out with friends, and we realized that the men and women had a lot of the same issues. We were joking and teasing each other about it, and it was a fun, relaxed conversation about how my friend and I always want to talk to our husbands the second they get home because we both work from home all day. However our husbands, after long days of talking to patients at the hospital, kind of want downtime and want to be left alone. So, by talking it out with friends in a way that was fun and joking, we were able to get past a small hurdle. I find a lot of times it’s good to bounce ideas off of friends when you need an unbiased opinion about something!

Ultimately, there are tons of ways to re-energize your marriage than just the tips listed above. It just takes a little bit of thought, a little bit of advanced planning, and a lot of initiative and motivation to add a positive change to your life. However, once you do, I think you’ll start reaping the rewards right away.

How about you all? Do you have any other ideas on ways to improve or re-energize a marriage while on a budget?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/dlytle/10334814055/in/