Money and kids always make interesting discussions, from the pocket money debate (how much, when, and for what) to whether you’d be willing to support children into adulthood.
I was financially independant from the age of sixteen and moved out completely when I was seventeen and I’ve never moved back. This is probably not un unusual scenario for past generations however with the cost of living rising and the difficulty young people face in getting a mortgage this has all changed and it’s far more common to hear of people living at home in their twenties and sometimes beyond.
As a parent how much do you feel that you’re obliged to support your children?
Do you think that parents should provide children with their first car, a down payment on their first house or see them through university? At what point do we draw the line and accept that they’re no longer our financial responsibility.
Does it help them to prolong the dependency, will they become reliant and less creative themselves if we’re always there with handouts and a little too ready to pick up the pieces if they make mistakes.
I don’t have my personal answers to all these questions so I guess in many ways I’m thinking out aloud. I don’t think at seventeen you automatically have the right to be handed a set of keys and a batch of driving lessons, although this has become an expectation in some circles. I definitely don’t feel I should be paying a down payment on a house and the university funding is something I continue to ponder.
I have contributed to Erin’s trust fund and will try to do so more in the future, so she’ll have a chunk of money to do with what she wishes but I’m considering setting up a seperate account that I can use to help here and there when I think she *really* needs it, and I think that’s the key for me. I want her to be independant so I guess I’d want to help out a little where becoming independant will be the result. I’m far more comfortable using this pot as an interest free loan, that way I can help with bigger steps without handing her things on a plate. Going back to the university/college thing I think it’s something I’d want to help with and I’d consider contributing to certain aspects of it. I also think that if 16-18 year olds stay on at school then I’d be happy to supply a larger allowance on a monthly basis as lack of money was one of my reasons for leaving college.
Have you considered how you’ll support your children in the future?
Erin: I’d like one of the kittens in the case like X at nursery
[Santa's bag's getting pretty full]
Me: Oh well, maybe you should save up your pennies…
Erin: Oooh yeah, how can I get pennies
[sensing an opportunity to teach lesson about the value of money..]
Me: Well you could do some jobs
Erin: [Gives a blank look]
Me: You know, like how Daddy does his job for pennies
Erin: [Excited] Oooh, maybe I can borrow some off him then!
Errr, that went well then 
ACF stands for America’s Cheapest Family by the way, it’s a book I bought last year after it was given a positive review at The Simple Dollar. The book covers all aspect of saving money and spending wisely, one of the biggest takeaways though has been their budgeting system.
Like most people (I think?) I used to muddle along and as long as my bank balance was ‘in the black’ I thought I was doing just fine, until of course the car broke down and we hadn’t accounted for the unseen cost of repair, which is where it all starts to get complicated and stressful if you don’t have savings. The ACF budgeting system takes into account these seemingly ‘unseen’ costs and factors them into a budgeting system that is easy to use and provides piece of mind that when something unexpected happens the funds are there to take care of it. Sound good?
I manage my budgeting system in a (very) simple spreadsheet (no formula required! Unless you want to). Along the top I have all the categories in which we spend money, ie insurance, clothing, car, mortgage, food etc.. I take the projected annual cost of each category and divide by 52. The amount left is the amount I must put into that category or ‘account’ each week, we are paid weekly, you may choose to do this part monthly. The projection is easy to figure out if it’s a monthly direct debit I times by 12 then divide by 52. If it’s something more difficult like the car (which includes repair!) I allow for the most expensive car repair we’ve had (£650) and then divide by 52 and hey presto. For household maintenance I allow around 1% annually for the value of our home which is a generally accepted amount ie if my home’s market value is £100,000 then I allow £1000 per year, which sounds about right.
So as we are paid weekly (and this is much easier if you have internet banking), I breakdown the pay into these categories, leftover money is put into a seperate ‘frivolous spending’ account. All bills and spending which is accountable comes out of the first account, I manually minus the money out of the categories each morning. This sounds like a complicated process, but in reality it takes me around five minutes or less each morning.
I’ve been testing this budgeting system for nearly six months and I can honestly say I’ve never worried less about money. I’ve nearly always kept savings for unseen disasters, however, it’s all too easy to spend those savings, not when you’re using this budgeting system, it’s easier to realise that eventually these ‘unseen’ events will happen and that you’re actually just saving up for when they do. Instead of the event being a financial disaster it becomes just another bill, one that you’ve already budgeted for! Now that the routine is in place it’s so simple to manage that I can’t ever see me not doing it now.
How do you manage the household finances?
There’s been a lot of coverage recently about an impending recession, the american mortgage crisis, and the rising price of food and fuel. Is there anyone who hasn’t given at least a quick thought to their monthly budget and looked for where they could trim some fat? I have, and I’ve also been wondering how I’m doing with my food budget compared to everyone else. This isn’t an opportunity for one upmanship, I’m actually more interested in finding those who are spending less, and how?
Please answer the following questions either on your own blog (and link here, so I can find you) or in the comments.
Here are the questions and my answers.
1.) Predominantly, where do you shop? Tesco
2.) How often do you shop? Weekly
3.) How much (on average) do you spend? £60(this includes household products and nappies)
4.) How many people are you buying for? 2 adults, one infant
5.) Do you do any of the following – meal plan, make a list, have a budget? Yes to all
6.) If at all, how have you tried to lower your spending on food and household items? I started meal planning and buying online to keep my costs down, recently though I have had to increase my budget from £50 to £60 as I was really feeling the squeeze.
Thanks for taking part.
I’m pretty lucky, Erin asks for nothing more than the odd biscuit or grape at the moment. In a few years, it will be a completely different story, “mum, can I have” will be the war cry. The summer holidays will be yet another financial event to be budgeted for.
In the past (dim, and very distant)when we’ve gone abroad I’ve tended to budget by the day. For example I work out a daily budget, multiply it by the amount of days and I know that’s how much spending money to take. Each day I will ‘pay’ myself the daily amount, leftovers are carried over to the following day. Money remaining at the end of the holiday is spent on a special treat, souvenirs for family and ourselves.
I think if I had a few kids of spending age I would be inclined to use a similar system, perhaps worked on a weekly basis instead. With teenagers you could give them the budget and let them learn to budget themselves.
Do you budget for summer? If so, what system do you use?
Photo by flickr user Rafa from Brazil
Well folks, I’m pleased to announce to you some breaking news.
Slowly but surely consumerism is being overturned by the new wave of creativity. Hand-made beats machine-made hands down and now you can get involved too. Think about what you do best…
Here are a few ideas from get rich slowly on how to become more creative and maybe even make a little extra money on the side. Making money instead of spending money will make you happier and is more of a challenge. So give it a try.
Here are just a couple of the suggestions at Get Rich Slowly
Knitting – Knit. If you’ve been bit by the knitting bug, put that yarn habit to work. Create simple, beautiful hats and scarves. Take commissioned projects. My wife is learning to knit adorable little stuffed animals; she could sell them for $20 a pop.
Cook. Do people rave about your food? Offer to cater events. Provide food for a picnic, for a cocktail party, for a sit-down dinner. Sell cookies and cakes.
You could also;
Produce hand-made cards, soap, candles, or coasters.
Sell your old things on an auction site, and other people’s too.
Make flavoured olive oils, lemon, chilli, garlic – sell them at craft fairs.
Stop spending and start earning. Are you making money from a hobby? Let us into the secret.
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I've been blogging for four years and write about anything and everything that takes my fancy.
Above is me with my beloved Ernie in Port Aventura and left with our love child in Florida.
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