As a parent, you are responsible for teaching your kids how to manage money. No matter what their age, children should start learning how to manage money throughout their childhood. Children taught these lesson turn tend to turn into financially responsible adults instead of jobless and in debt adults sitting on their parents’ couches watching TV all day.

Budgeting and Planning

Whether your child is five or 16 years old, they typically receive money from allowance, part-time job or as gifts for special occasions. This is a great opportunity to teach your children about budgeting and planning for the future. Yes, your child should be able to spend this money on what they want (to a point), but it should also teach them about spending responsibly. Instead of allowing your children to blow all of this money, require your child to use a certain amount of their money to pay for some of their own expenses. For a teenager, this may mean requiring them to pay for one tank of gas for their car each month. For a younger child, it may mean that they have to put 10% of it in their piggy bank to save for a rainy day.

Household Budget

It’s also important to teach your children that money is limited. A great way to illustrate this is with money jars labeled with the family monthly expenses. Using real money or play money, start out with a pile of money that includes the monthly income of your household. Go through the list of bills and expenses for the family each month, removing the expense amount from the pile of money and dropping it in to the appropriately labeled jar. Continue this until all of the expenses are paid. If there is money left over, explain to children that this is spending money. If there isn’t any money left over then explain that there isn’t any money left after bills are paid for any extras.

Live within Your Means

It’s also time to instill the need over want mentality in your children to teach them how to live within their means. Danny Kofke, father of two young daughters (5 and 2) drives this point home by paying an allowance in exchange for chores completed. Allowance money isn’t used solely for spending. Ava (5) is required to split her earnings between three jars–give away, savings and spending (in that order). If Ava sees something she wants, Danny and his wife Tracy tell her she has to see if her spending jar holds enough to buy it, or Ava can dip into her savings for items that may cost a little more.  Ava uses the give away jar money to buy presents for others and donate to organizations.

Financial Contracts

Teach children about contracts and financial obligations by acting as a lender from time to time. When your child wants to buy an item, “finance” it for them. You can form on agreement (on paper, if you wish) with the child where you fund the purchase of the item but they are required to pay you back with their own money until the “loan” is paid off. This will prepare your children later in life when it’s time for them to take out a loan or mortgage with a real lender.

No Bailouts Available Here

You may be teaching your child a more valuable lesson by not bailing them out every time they hit a financial snag. Financial snafus are opportunities for your child to learn ways to better manage their money or create a strategy to come up with the money they need to get out of trouble on their own–take on a job, get a second job or create a budget to manage their spending, so this won’t happen. If you do bail them out, then require them to pay you back.

Investing Today for Tomorrow

Take a trip to the bank with your child to open their very own savings account or take it a step further and open an investment account. Require them to deposit a certain amount of their money into this account on a regular basis. Sit with your child and review the statement for their account(s) each month so they can see how their money grows over time. It may seem like a basic concept but it teaches your child how putting money away today grows it for the future.

Bills of the Future

While your child may not have any expenses now, they will in the future. A good way to teach them what kind of expenses they’ll have in the future is to make a list and go over it with them. Teach kids about some of the bills they will be responsible for paying as adults. Again, this drives home the value of money, the need to budget and to cover necessities before being able to splurge on their wants.

Parents that teach children about managing money and finances tend to have responsible adult children. Take your opportunity to instill good financial habits in your children while they are young so they know how to manage their money later in life too.

Do you ever ask yourself why you’re being such a stickler with your money? We save and invest money for “the future” but how do we know when that future we’ve been preparing for becomes the present?

My Grandmother’s Apartment

My kids and I paid an evening visit to my grandmother this week, just so they could spend a few hours hanging out with her.  The memory of my grandfather, who passed away last year, still fills her relatively new apartment.  She moved into the independent living community after he died and as I walked in the front door I realized how people know when “the future” has arrived.

The place she’s living is wonderful. They have a computer room, a chapel, a game room, a workout room, a movie theatre, shuttles to drive the residents around town, a great dining facility, and most importantly… a nice community.  The people that live there congregate for meals, movies, games, worship, and just to visit.

The Future is Now

Of course all of these amenities aren’t cheap but it’s okay because “the future” that my grandfather saved for all those years has arrived.  As I mentioned in my memorial to him, my grandfather was tight with money, and proud of it.  Now all that saving and investing is paying off. Providing for his wife when he’s not there to care for her is EXACTLY what that money was meant for. 

He probably couldn’t visualize exactly how the money would be spent at the time of earning and saving it but he knew he was investing in the security of his family.  He didn’t know what the future held but he knew that it would eventually come and that he wanted to be ready when it did.

Condolences

One of the reasons I wanted to write this was because of Jason over at Frugal Dad who sadly lost his mother last Sunday. My visit to my grandma and his loss of his mom really got me thinking about where my parents and someday my wife and I will end up. 

I don’t know when that future will be. I don’t know what it will look like. But I’m glad that my parents and my wife and I are saving for the day when it arrives so that we can provide the rest of our family the security that we won’t be there to give.

Yesterday I wrote about the costs of raising children and got a few emails reminding me of some of the costs that I left off the list.  I don’t know how I missed some of these like childcare and insurance since they’re pretty big chunks of money.  I guess there are so many expenses it’s easy to overlook a few and I’m sure I still won’t have captured them all.  Here are some more costs of raising kids.

Childcare

Childcare can be really expensive. It depends on a variety of things such as the age of your kid(s), how many children you have, how many days you need childcare, how many providers are watching over your kids, the activities they do, etc.

We are happy using an in home daycare that is cheaper than the chains like Kinder Care / La Petite and is very flexible with scheduling but the fees still add up pretty quickly. I have co-workers with 2 kids that have day care expenses of several hundred dollars a week.

Laundry

Kids are always getting their clothes, blankets, and sheets dirty. Whether it’s dirt, food, or bodily fluids children can’t seem to go a few hours without getting something on their clothes.  Of course, if it’s a little dirt or a food smudge you can let it go but if they’re covered in mud or dripping in urine then you have little choice other than soaking the clothes in the sink and putting on another outfit.  Before you know it the laundry basket is full, their drawer is empty, and it’s time for another load of wash.

Insurance

I talked about medical bills and co-pays last time but I forgot to mention insurance premiums. Each time we have a kid it costs us more in monthly insurance premiums to add them to our coverage. 

Of course you can lower your premiums by raising your deductibles but that’s quite a balancing act of guessing how sick or hurt your kids will get in the year ahead and picking your deductibles.

Activities

We enrolled our son in soccer lessons for the first time this year.  It was also our first time paying “activity fees” for our kids.  It was $80 for 8 sessions so it wasn’t outrageous but it was $80 that we weren’t spending a year ago.  As kids get older and get into more activities the budget for stuff like this will have to increase.  I have co-workers whose kids are involved in multiple sports and different activies that are always moaning about all the fees.

One of the activities we like to do that isn’t expensive is take a picnic to the park.  Another one our son loves that is free is taking an afternoon trip to the public library.

Babysitters

For a good night away from the kids you’re going to need at least 3–4 hours to grab dinner and see a movie or some other fun event.  The more kids you have and the longer you’re away, the more you have to pay the babysitter.  You also have to make sure there’s food for the babysitter to eat for dinner. So on top of the money you spend on dinner and a movie you’re also shelling out cash for someone to watch your kids.

As I mentioned yesterday, the joys of parenthood are certainly worth the added expenses but they can add up quickly so make sure to budget for them.

Being a parent can be a lot of fun but it can also be quite expensive.  If you’re thinking about having children, make sure you budget in enough cash each month for all the different ways kids can cost you money.

Health Care

Medicine

It seems kids, at least young ones, are always getting sick.  I’m sure part of it is that they’re often running around other little kids with runny noses and stomach bugs.  It doesn’t help that they like to put everything in their mouth, never want to wash their hands, don’t cover their mouth when they cough, and are too small to understand the concept of germs.

For example, when our son was younger he kept getting some kind of eye goop from the kids at daycare where his eyes would crust shut.  The doctor gave us a prescription for a tiny little bottle of drops that cost us $50. At $50 a pop, I would dread every time I saw the goop start to accumulate in his eyes. 

Then, I’d catch it from him and have watery, crusty eyes as well but the doctor said not to share the bottle of drops.  They wanted me to go to my doctor and get a prescription and get my own bottle.  Dreading another co-pay and spending another $50 on a teeny tiny bottle I didn’t listen and borrowed his drops. Luckily my goop went away.

Co-pays

Of course, anytime your kid gets a cold you have to worry if they’re going to get an ear infection.  You don’t really know if they have one or not but if they’re acting fussy and crying a lot you start to wonder if the cold caused an ear infection.  So you take them in to see the pediatrician which means you have a co-pay. 

Sometimes they have the ear infection, sometimes they don’t; but you pay for the doctor’s visit no matter what.  The thing is, you love your kid and don’t want them to be in pain.  So whether it’s a suspected ear infection or some other ailment, when something seems wrong with your kid you worry about them and call up the pediatrician. All those doctor’s visits add up over time.

Time Off

When your son or daughter is sick, someone has to stay home with them and that means taking a sick day or vacation day.  If you’ve worked at a job for many years you may have a surplus of days accumulated, but if not then each one of those days is pretty valuable.

It’s not just sick kids that will eat up your vacation days.  For example, last week our daughter got kicked out of daycare because she wouldn’t take a bottle from the babysitter.  My wife went to pick her up and our baby sitter said she couldn’t come back the next day since she was refusing to eat from a bottle.  With little notice to find an alternate, I ended up having to take a day of vacation to stay home with her.

Destruction

Usually kids don’t mean to be destructive but due to their youth and ignorance they destroy things unknowingly or accidentally.  For example, maybe they’ll pick up something fragile (cell phone, camera, decoration, etc) and drop it as they walk across the floor.

Or they’ll be potty training and have an accident and get pee stains all over the furniture or the carpet. 

Maybe they’ll be washing their hands and plug up the sink and overflow water all over the bathroom.

They can also be destructive towards their own bodies.  A big cut or a big fall can lead to a an expensive and day-consuming trip to the emergency room.

I’m sure the list is endless, there are many different ways kids can destroy things.

Babies

Babies cause so many expenses that they’re in a whole cost category of their own.  Cribs, strollers, diapers, and formula aren’t cheap.  Then there’s the process of being pregnant and actually delivering the baby.  Doctor visits and hospital stays keep the medical bills flowing in for a while.  Depending on the mother, you might also drop a bunch of money getting the baby room ready, which can mean new furniture and decorating.

Toys / Clothes

You can certainly save money on toys and clothes by buying them at garage sales or discount stores but those costs still add up.  Your kids will either destroy or grow out of the clothes and toys that you buy them so every season you’re spending more money.

Cost of Kids

So far, we’ve only experienced the costs of the first few years of life. We haven’t gotten to expenses for school age kids, let alone the costs of college.  I don’t know what the total bill will be but I know it’s going to be MASSIVE.

However, the joy of being a parent and seeing your kids learn and grow is worth more than the large financial cost of raising children.  Although they may deplete your bank account, they’ll fill up your heart and make you happy in ways you didn’t know were possible.  Just make sure you budget for the little money sucking bundles of joy.

Why aren’t you at the top of your game? What’s sapping your strength?

I haven’t quite been myself lately, I’ve had a hard time getting going in the morning and have really been struggling staying up and working late at night. Of course there are many different excuses I could make but I won’t bore you with all of them. 

I will, however, share with you the melody of a two month old baby screaming at you because she’s hungry. Just hit play on the video below to enjoy, turn up your volume for the full experience. Crank it all the up around the 1:35 mark for an extra special treat : )

Warning, Extended Listening May Cause Psychological Exhaustion

Job Description
Seeking one full time mother to raise a baby. No experience necessary.

Screening Process
The job requires an initial nine month screening process during which you’ll be puking, uncomfortable, and sometimes miserable while carrying a baby to full term. Your body will do things you didn’t think possible and the nine months will end with some of the worst pain you’ve ever experienced.

Required Skills
Here are the skills necessary to be considered for the job of full time mom.

• Change diapers at any time of day or night
• Decipher baby’s cry and calm crying baby
• Setup & organize a baby’s room
• Cook with a kid on your hip or under your feet
• Fast cleaner, able to clean entire house before kid starts making next mess
• Shop for bargains on kids clothes, diapers, etc
• Keep kid entertained with non stop activities
• Ability to discipline kid
• Must teach kid to walk, talk count, eat with silverware, use the toilet, & be polite
• Whatever else is necessary to keep kid alive, healthy, and happy…

Job Hazards
This job will not be easy, you will have to endure:

• Stress
• Pain
• Guilt
• Worry
• Lack of Sleep
• Petulant Children

Qualifications
To do this job well you must exhibit:

• Unconditional Love
• Compassion
• Patience

Compensation
This is a non-paid position but it does come with benefits you won’t find anywhere else such as undying love of the child and eternal gratitude from the father.

Thank You!
Of course it’s impossible to list all the amazing things you do. When you look at all that’s required it’s a wonder anybody wants the job of full time mom; BUT you do it so well and take such good care of our kids! We’re so lucky to have you in our lives. Happy Mother’s Day!

Note: This is the mothers day card I wrote for my wife today.  This afternoon I took both little ones while she headed out on her own for some time away from the kids.  After only a few hours of a demanding three year old and a crying newborn I am reminded of how tough a mother’s job can be.  Hats off to all the mothers out there!