Making Payments to Your Kids

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The following post is by MPFJ staff writer, Travis Pizel. Enjoy!

My wife and I aren’t perfect.  As we fight our way out of credit card debt, we occasionally slip up and overspend.  We had just such an episode in July, and starting the following month, it was all hands on deck to recover from the financial hole we had dug for ourselves.  Unfortunately, during that period, we had to stop paying one of our regular monthly expenses, and are now behind.  Who is that creditor?
Our children.
We had to cut every expenditure we could, which included suspending the weekly allowances of our son, Tristan (13) and our daughter Tori (10) until we could get our budget and spending back on track. Lucky for us, they were very understanding of our situation, and granted us enrollment into a hardship program that gave us 0% interest and no late fees.
Our kids’ weekly allowance is one dollar for each year of their age.  We had to suspend their allowance for six weeks which means we owe them a total of $138.  On September 14th, we sat them down and told them that we were re-instating Friday as allowance day, and handed them each their weekly amount.  We also told them that we would be “making up” the missed weeks by paying them double on selected Fridays.
We could have just walked away from the missed weeks, after all we are their parents and what we say goes, but that just didn’t feel right.   I also thought this would be a great teaching opportunity for our kids.
  • Financial irresponsibility and debt can affect more than just you.   Your debt can affect your significant other, your children, and everyone around you.  I felt like a failure kneeling beside my son’s bed telling him he wouldn’t be getting his allowance for awhile.
  • Never walk away from your debts.  You may not be able to pay right now.  But hopefully, you’ll be able to eventually.  Plan for it and make it happen.  Even if your debt is to your 10 year old daughter.
  • Watch me fail, then watch me overcome:  Our kids don’t know the specifics or the numbers, but they know we’re in a Debt Management Plan.  They’ve watched us fail.  But more importantly, they see us fight back and overcome those failures.  They’ll watch us pay them back the owed allowance, and they’ll be a witness to the day when we make that final payment and be rid of our credit card debt.
Parents commonly say they want their kids to learn from their mistakes.  I want more than that.  I want them to learn how to recover from those mistakes.   I don’t want my kids just to remember the time mom and dad stopped giving them allowance and how they couldn’t buy that new video game like they had planned.  I want them to also remember how mom and dad gave them double allowance for what seemed like forever because they wanted to make it right.

How about you all? What financial lessons are important for you to teach your children? What strategies do you use to facilitate those lessons?

Share your experiences by commenting below!

    ***Photo courtesy of http://www.freedigitalphotos.net/images/Other_g374-Giving_To_The_Poor_p57545.html

    Lessons in Frugality From Other Cultures

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    Click here to enter my free $79.07 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is September 30th, 2012.

    The following is a guest post by Staz Johnson. Staz passionately blogs about personal finance, frugality, investing tips, and more at Essential Finances. Enjoy! 

    Lessons in Frugality from Other Cultures

    As a newlywed going away on my honeymoon, I never thought that finances would be on my mind. I had just had a very small wedding ceremony and reception with less than 15 people attending. Since the wedding was so small, we didn’t end up spending too much on it; we had planned to blow more money in Europe, but instead, we learned the extent of frugality in a different country.


    Frugality as a Way of Life


    We took the train through England and Germany until we reached a small town in Poland. As far as towns go, this one is not at all rich, and the individuals residing here implemented more tips for frugality than I had ever thought possible. As we visited friends and family, we noticed that saving money was very common ground; an unspoken language of frugality existed ranging from a lack of impulse buying (or large and unnecessary purchases in general) to where most tea was made from herbs grown on the balcony, and if packaged tea was used, then the tea bag was reused to make at least two cups.


    Frugality in the Home


    When we spoke with my relatives, we found out that many of them made their own hand creams and conditioners out of a blend of coconut oil, olive oil, herbs, and spices. Hot water was also to be used sparingly. For example, when doing the dishes in the morning, cold water was used. My aunt told me that they only used hot water to clean the dishes after dinner because the foods eaten at that time are generally greasy, but in the morning, cold water works just fine. As we can see, saving money doesn’t have to be overly complicated, it just takes some consistency. By using hot water only to shower and clean up after dinner, you could save hundreds of dollars a year or more.


    Transportation


    As we went outside for a walk around the town, we noticed that there were many more bikes being ridden than we are used to seeing and that when cars do go by, they are usually very small. You could easily find whole families bike riding together as easily as individuals or couples. Not only are they saving money on gas and insurance, but the active lifestyle they live can lead to decreased health bills down the road. When we arrived at the park, we noticed people crouching down under the trees; I later found out that they were picking up nuts to for the winter underneath acorn and walnut trees. I personally haven’t tried this, but every summer I do pick mushrooms and strawberries for free from the forest and from our garden to save money going to the market.

    If you don’t get a chance to eat everything right away, remember that there are many ways to preserve foods so that they last in the future; mushrooms can be dried and then used for soup later, cucumbers can be pickled (as well as many other vegetables), berries and rhubarb can be used to make juices for now and jams for the future.


    Frugal Shopping


    We went to the market every day and my aunt bought only that which she will eat in the next day or two in order to make sure that nothing goes to waste. And when meat was purchased, every part of it was used; chicken bones that most people throw away were used the following day to make chicken broth and even the water in which the sausages were boiled was then used to start a new soup later on. My aunt had a little garden that she grew on the balcony and inside by the windows (you don’t always need a yard to grow a garden and save money on food) and she frequently traded her garden grown fruits and vegetables for other types of food with her neighbours such as trading tomatoes for apples or herbs for peas.  Many neighbours also baked their own breads and pastries.

    The cost of food is not the only expense individuals try to cut costs on; making your own clothing is also very common. Fabrics and yarn were bought very cheap and can be made into elaborate sweaters and shirts and skirts which can also be given out as gifts, saving money for birthdays as well as during the holiday season. Teddy bears and stuffed animals are also frequently made to save money for toys for the children. Another aspect of their life that I wanted to mention was that even though many people did not have much, they took very good care of what they did have and kept everything very clean and well maintained.


    Conclusions


    I have always tried to be frugal and spend less than I make, even attempting to sew my own clothes once, but my eyes were truly opened as to how frugal you can really be. I’m not sharing this to be judgemental; I wanted to share this to show that frugality can be more than simply a 30 day challenge. Most of us have the choice whether to be frugal or not, but in many countries, frugality is a way of life. Those who implement this into their daily routine end up spending much less, wasting very little (if any) and give their creativity a constant workout to come up with new ideas.

    How about you all? When you have traveled to other countries, have you noticed any effective frugal living strategies that are ingrained in to the culture?

    What ways do you think would be effective to instill more of a sense of frugality in to US culture?

    Share your experiences by commenting below!

    Is it Possible to Gamble in a Fiscally Responsible Way?

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    Click here to enter my free $79.07 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is September 30th, 2012.

    The following is a guest post. Enjoy! 

    Everyone loves the occasional flutter. And, with the wealth of sporting events going on recently, what better time is there for throwing a cheeky few quid/Dollars on the athletics or boxing event you’re watching?

    Indeed, if you know about sport, then the time could be ripe to take your winnings to the max. And, with the football season set to get back underway in a few weeks, more fruitful days could lay ahead for the sharp gambler.

    When Gambling Becomes of Problem

    But, the key to any successful gambler is discipline. While the feeling of winning is one which is rarely rivaled in life, it is important to ensure that any money you lay down is done in a responsible manner. Unfortunately, some people do not know their limits and end up in serious debt. In 2008, it was suggested that as many as 284,000 people in the UK were in debt because of their gambling habits, with the average person owing £17,500. And, it is believed that these figures have risen further in the four years since.

    But, how do you recognize if your gambling has gone from being the harmless bit of fun it is intended to be, to something much more serious? Well, there are a few tell-tale signs. These include having arguments with your family and friends over money issues, yet still being able to scrape enough cash together to go down to the bookies, losing interest in other activities and thinking of gambling constantly. You’ll know that things really have come to crunch point when you are forced to borrow money off people, can’t afford to pay bills because of gambling, or even have to sell your possessions just so can rustle up enough money for groceries.

    If You Must Gamble, Gamble Responsibly – Here’s some tips

    When gambling, be it on the horses at your local turf accountants, online using a dedicated account, or even on the fruit machines in a pub or nightclub, there are some simple rules which will keep your gambling in check, up your enjoyment, and ensure you don’t lose your shirt.

    • The first of these involves setting money and time limits. Tell yourself that the most you are prepared to put down is, say, £50 and that the maximum length of time you are willing to spend checking forms in the bookies or online is 20 to 30 minutes. This way, you’ll ensure that you can only lose what you can afford to and you also avoid the temptation to lay bets on other races or events happening later in the day.
    • It’s also important not to overestimate the likelihood of a win. While you might be certain that Sad Ken will romp home at Kempton Park, nothing is guaranteed, so you should never gamble money you don’t have on what at first appears a no-lose situation.
    • Another no-no is chasing your losses. Just because your last bet didn’t come in doesn’t mean that you should stake more funds trying to get your lost money back. This often just makes the issue worse and can be one of the trigger points to a serious gambling problem.
    • It’s also a good idea to have a spreadsheet or database which tracks your betting. This way, you’ll know exactly what you bet on and when and how much you won or lost. Heck, you could even set up a bank account just for gambling as this would ensure that you only spend what money is transferred into it.

    A final suggestion is not to gamble when you’re under the influence/drinking. While a quick bet here and there can be good fun when you’ve had a few drinks with friends, alcohol can impair your judgement and make you do things which you’d avoid when sober, such as making ridiculous bets.

    How about you all? Do you ever gamble with your money on sporting events or at casinos? If so, has it ever had any negative effects on your finances? 

    What tips do you use for helping to keep your gambling fun in check?

    Share your experiences by commenting below!

    ***Photo courtesy of http://www.flickr.com/photos/matsuyuki/201651074/sizes/l/in/photostream/

    Advanced Couponing for Savings Pros

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    Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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    Click here to enter my free $79.07 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is September 30th, 2012.

    The following post is by MPFJ staff writer, Kelly Gurnett. Kelly runs the blog, Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do.


    You may already know the basics of Couponing 101:
    • Clip any coupon you think you might use.
    • Keep them organized (by product type, by expiration date, etc.)
    • Let go of brand loyalty.
    • Stock up when things are on sale.
    • Combine coupons with on-sale items for extra savings.
    • Join every free store rewards program out there.

    You can rake in some decent savings with just these strategies. But if you’re anything like me, you want more. Maybe your budget has gotten tighter recently due a job loss, a new baby, or (in my case) a leap into the world of self-employment. Maybe you’ve been watching Extreme Couponing and have dreams of building a stockpile big enough to feed your whole neighborhood for a month. (I can relate. I’ve had those fantasies.)

    Whatever your reasons, Couponing 101 just doesn’t cut it for you anymore. Fair enough. Then it’s time to take the advanced course.

    So get out your pen and notebook, buy a bigger coupon binder (you’re gonna need it!), and let’s get started.

    Couponing 101 – Level 2            

    Say “Bye Bye” to Self-Consciousness. Without this essential ability, you will have a hard time pulling off some of these advanced plays. You need to get comfortable with the idea of being the “crazy coupon lady” (or guy) and occasionally making the people in line behind you mutter over how long your checkout is taking.

    Learn to let it roll off you and diffuse the tension with an apologetic smile and an olive branch statement like, “Each penny counts in this economy, huh?” Yes, you’re going to annoy some fellow shoppers (and some cashiers) when you play the advanced coupon game, but it’s worth it when you see your savings. They’re about to be horribly jealous as they watch your total plummet from $60 to $30 to $5.25.
                
    Duplicate Coupons. The key to stocking up on sale items is to have as many coupons for each item as possible. While I do not advocate Extreme Couponing strategies like getting your whole family inside a dumpster to rummage for thrown-away inserts, there are plenty of easier (and more hygienic) ways to get your hands on multiple inserts.


    Ask your neighbors and relatives if they use their inserts, and if they don’t, ask if they’d mind putting them aside for you. You can make the rounds each week to collect them or just get them the next time you see the person. Don’t overlook “used” inserts, either—if your friends and family are willing to give you their inserts after they’ve clipped out the coupons they want, chances are you can still get a good amount of coupons from the leftovers. (Especially since casual couponers usually only clip the name-brand items they use—whereas you, as a couponing pro, know how to use whatever you can get.)

    Online coupons. Even easier than clipping, with additional deals you won’t find in the weekly inserts. Just check off the coupons you want, hit “print,” and you’re ready to go. Often you can print a coupon more than once. Popular sites include Coupons.com, SmartSource, and Red Plum.


    Rebates. Add rebates to your couponing arsenal and you can really make off like a bandit. Rebates usually require purchasing an item, then mailing in the receipt and proof of purchase to get a check in the mail several weeks later. If the item was already on sale, this just means you’re making more money from it.

    How do you find these rebates?  Check out the rebates section of sites like Couponaholic and Fabulously Frugal.

    Couponing sites. There are hundreds of sites out there that make advanced couponing easier by doing things like matching up current store sales with existing coupons to save you the work of doing it yourself. Some of the top sites (in addition to those listed in the previous section) include Refund Cents, Coupon Mom, and Coupon Cabin.


    The Trifecta (CVS, Walgreens, Rite Aid). If you have yet to discover the wonders that are these drug store’s weekly deals, you’re in for a treat. I refuse to buy anything full-price at a drug store because the prices are usually inflated. But by mastering these stores’ weekly circulars, I’m usually able to get half my monthly grocery and household needs fulfilled at deep discounts.

    You’ll want to sign up each store’s frequent shopper programs in order to get these deals, plus sign up for their e-mail lists for special promotions. Here are the basics you need to know to rock the trifecta:

    CVS Extra Care Bucks. Each week, CVS offers Extra Care Bucks (or ECBs) on particular items. For instance, if you buy a certain brand of shampoo, you get $2 in ECBs, which print out as a coupon at the end of your receipt that you can use on your next shopping trip. (These print-with-your-receipt coupons, in couponing lingo, are known as “catalinas.”) The next time you go shopping, bring all your ECBs from previous trips and you can knock your total bill down even further.


    Percent-off coupons. CVS in particular regularly offers 20-25% off coupons through e-mail, which you can either print or send directly to your frequent shopper card. Always use these coupons before any other coupons, because the larger your starting total is, the larger the amount you’ll shave off. I usually hand my percent-off coupon to the cashier first, then hand him the rest of my coupons, just to make extra certain he scans the percent-off coupon first.


    Freebie / Money-Making Items. Every once in a while, a trifecta circular will feature a “free” item. If you purchase a particular brand of contact solution at $7.99, you’ll get a $7.99 catalina with your receipt, so you’ve essentially gotten the product for free. If you have a coupon for that item (for, say, $2 off), the store will actually be paying you $2 to take that product off its hands. Not too shabby!


    The BOGO/BOGO Double Play.  Using coupons on items that are “Buy One, Get One” (or BOGO) can net you some great deals. Using BOGO coupons on BOGO items nets you the mecca of couponing, lots of free stuff.


    Rite Aid’s policy has since changed (probably because they caught on to those of savvy enough to play this game)—but not so long ago, they accepted BOGO coupons on BOGO items. I happened to have multiple sets of BOGO Cover Girl coupons thanks to my generous friends and family, and Cover Girl foundation was BOGO that week. It was one of my proudest couponing moments when the cashier rang up $64 worth of makeup and I walked out of the store with it without having paid a cent.


    You can find each store’s coupon policy on its website or by stopping by its Customer Service desk. I would highly recommend having a physical copy of the policy with you when you check out, as you may need to show it to an uninitiated cashier to prove you really can do what you’re trying to do. (Sometimes you may even need to prove it to the manager they call over to double-check it with.)


    Selling Your Stockpile. Hardcore couponers believe that if you can get a product for free or at profit, you’d be silly not to get it—even if it’s something you’d never use. Which makes monetary sense, but then what do you with all that un-needed stuff?


    If you are truly hardcore, you can save it all up till garage sale season and then sell it to make even more profit. Since you’ve gotten these products for free, you can mark them at a low enough price that customers will be eager to grab them up. I’ve run several garage sales, and the stockpile items are usually the first to sell out.

    Especially popular items? Toothpaste and toothbrushes, over-the-counter medicine (especially pain killers and cold remedies), makeup, and hair color. Just make sure any expiration dates are well in the future, and you’re good.

    How about you all? Do you have any other advanced couponing techniques you use?

    Share your experiences by commenting below! 

      ***Photo courtesy of http://www.flickr.com/photos/24218656@N03/6932081205/lightbox/

      How Conferencing Can Lower Expenses for Your Business

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      Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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      Click here to enter my free $79.07 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is September 30th, 2012.

      The following is a guest post sponsored by Powwownow UK. Enjoy! 

      Businesses of all sizes are struggling to find effective ways to cut costs, even though many of them find that they have no choice but to reduce their spending. Communications are among the biggest overheads that most companies, especially smaller and start-up enterprises have, largely because of expensive phone bills. However, a growing number of businesses are turning to conference calling and seeing how it can save them money on websites like conferencecalls.co.uk. Conference calling has many advantages over other forms of communication besides being cheaper.

      Conference calling allows meeting organizers to invite several people at once to a phone or video call, and can be arranged in a matter of seconds. It also helps to save time and enable people to work from home rather than spend valuable time travelling to and from the office. Some companies have grown rapidly on the back of providing conference calling services, one of them being Powwownow. Recently, they managed to secure a £2.5m loan from the government’s National Loan Guarantee program in order to finance the takeover of a rival firm in order to fuel its already impressive growth.

      In 2011, Powwownow UK recorded sales growth of some 30% with total sales in that year of around £7.5m. The growth in demand for conference calling services has helped to move them in the right direction, and in order to help them stay on the right path, Powwownow launched its “More Sense than Money” campaign featuring an inept fictional banker and some provocative quotes. They also received help from Barclays, which has seen them receive expert advice on how to get to the next level.

      To help increase their appeal to businesses who want to use conferencing software, Powwownow are determined to develop their video conferencing technology further. The reason behind this, says Chief Executive Simon Curry, is that they want to replicate their audio success: “We need to make sure that, in the long term, we have a large share in the collaboration market. We’re working on high-definition video and audio collaboration products to make sure we’re ready”

      The loan, given to them by Barclays, could also help them to fund this move. If they achieve the same level of success as they have done with audio conferencing, then more businesses could be aware of the benefits this technology could bring to them.

      How about you all? With the cost of travel these days, are you using teleconferencing more in your career?

      Share your experiences by commenting below!