Lego Motorcycle Mania!

Making and Keeping a Budget

Get the whole family into the act of making money work for you.

As parents we are often our own worst enemy. We display our attitudes about money to our children, without giving a thought to what we are actually teaching them about money in our lives. Of course our children want things, they are bombarded with things all day long. What we do with our money and how we choose to use our buying power speaks volumes to our children.

I know my child is not going to being deprived if he doesn't have the latest gaming system. He still hounds me about newest Lego product on the market, since he's a member of the Lego Club. Legos are in the budget and to be honest we count them as part of our educational expense. We are very frugal and deliberate where his homeschooling supplies are concerned.

When he was small we never allowed television in our home. Yes, we had a television and it wasn't a religious thing, it was the constant sales pitches coming into my home that irritated me to no end. We wanted to be in charge of his learning and expose him to beneficial educational opportunities.

Have you ever noticed that the things that are advertised on television, are the things we need the least and most likely has the least value for the money. Around age 2 to 4, we allowed him to watch shows like Kipper, Blue's Clues, Dora the Explorer and Little Bear. These were shows that moved at a rational pace, had slower tempos, and diplayed educational value to us as parents.

Teach the kids about money!

We still don't allow him unfettered shopping rights. We encourage exploration of the outdoors, wildlife, photography, film making and editing. He has his own digital camera and his own computer — all items we planned for and more importantly bugeted for.

Speaking of Budgets

Speaking of budgets, getting by on one is really tough, especially if you don't actually have a budget and it's just as bad if you have one and you don't follow it. Limiting commercial exposure for our child, limits the press they exert on us to buy them silly things.

Families living on a shoestring can do themselves and their children a huge favor, simply by talking about money issues. As a child many of us were brought up hearing, "Don't worry about it, this doesn't concern you," when the topic of money or finances were brought up in the home. Our parents felt that children shouldn't be bothered with money worries.

But how will our children learn to face the lean times and make wise financial decisions regarding their own money, unless they are able to participate and understand how these decisions are made?

Tackle Overspending

Parents often overspend on their children -- even when they can't afford doing so. Some will even put on elaborate birthday parties and buy extravagant gifts for Christmas and birthdays, even though doing so means the electric doesn't get paid and the rent is late. What kind of example does this teach our children? That these dates are special? Not exactly -- it simply demonstrates to them that it's ok to be irresponsible and that meeting our obligations in life isn't that important.

Guilt is a major factor when parents make bad financial decisions. Couples often feel guilty because they can't provide the things their friends and neighbors have. If the children are homeschooled, parents want their children to feel "normal" and not miss out on important milestones in their life and many times will end up overspending in an effort to appear "normal."

The fact is homeschooling while much more common that it was in years past, it's still not considered normal. Having at least one-parent actually in the home caring for the children, isn't normal these days either.

If you are trying to exist on one income or you would like to, you need a budget and you need to stick to it.

Creating a Budget

When considering how to go about setting up your own budget, the first thing you should do is to begin gathering receipts. If you spend a dollar on a can of soup, get a receipt. If you can't get a receipt, write it down. It's hard to create a budget, if you don't know where your money is going. After a month or two of collecting receipts, sit down and add up the figures. Sort them by categories.

How much did you spend on eating out?
How much do you spend on gas?
Don't forget the insurance.
Include your utilities (gas, electric, phone).

Plan for Emergencies

Everyone knows that emergencies are real budget busters. Things come up unexpectedly all the time, causing havoc with our well-planned money schemes. Planning for the unknown can help. Take a good look at your car. Are the brakes in good shape? Are the tires worn? Set aside a little each week for any added expenses you may face in the next six-months.

When it comes to birthdays, schedule those events in just like you would any other. How much do you plan to spend? Write it down. Don't break the bank on a whim. Let the kids in on the birthday budget, ask for their input on what they would like for their birthday. Don't deviate from the plan.

This is a terrific time to teach the kids about money and how it works. Let them assist you adding up the receipts and creating a working budget. Around the age of 11 or 12 our children became very interested in making money and of course spending it. We helped them create their own budget. Then we took it a step further and had each of the children take their turn taking care of the family finances for one-month.

Get the Kids Involved

The kids would make the bank deposit, balance the checkbook, and write out the checks to pay the bills. After which, they would review the budget for the month, making sure everything lined up properly.

In a susequent month it would be their turn to plan the meals for the month, create a grocery list and do the shopping. These were fun times that brought us closer together and gave the children a glimpse into our world that helped form the foundation of their financial futures.

Many couples are still under the assumption that they simply can't afford to homeschool that they can't survive on only one income. This could not be further from the truth for most families. The question for most boils down to this, - Is it more important to keep up with the neighbors or to stay home with the kids? After all if one parent quits work:

Do you actually need a second car and the insurance that goes with it?
How much would you save on school clothes?
What would you save by omitting the cost of school fundraisers?
Add up the cost of all those meals eaten out because of a lack of time.
What will you save on the gasoline costs for community to the job?
How much do you spend on work clothes?
What other things could you do without if you homeschooled? Add it to the list!

The savings add up quickly. These are just the financial advantages, there are many other pluses to consider as well, not the least of which is being able to provide emotional support to your children and working together as a family. Many homeschooling families have even started their own successful at-home businesses to help supplement their income and have a terrific time together too.

Work Together

The message here is to plan ahead but when even the best plans fail and they will don't get caught in the guilt trap. Talk to your kids about money; let them see how you work through the problems. Instead of going into debt to celebrate a birthday or special occasion, postpone the event, buy gifts ahead of time when they are on sale or discuss an alternative with your kids. If we take the time to talk with them, most are very understanding and willing to compromise.

Get Your Finances in Order!

Money Saving Tips

Here are a few money saving tips from my family to yours:

Keep a plastic bin in the closet - pick up quality sale items when they are available and save them in the bin until needed.
Postpone Christmas - we celebrate Christmas with family at the normal time but postpone our Christmas gift exchange with the kids until January or February. If you wait until the after-Christmas returns are finished (usually mid-January) the stores start the real sales. In fact, I just purchased $178 worth of clothing for one of the grandchildren, for just $56. What a deal! We have done this for the past four years and the kids love it.
Keep birthdays simple - if you get in the habit of spending big for the birthdays when you have plenty of money, the kids will feel cheated when you cut back during the thin times. You don't have to wait for a special occasion to purchase new things for your child. In fact, take the time to take each child on a "date" make that day a special time, just for him or her buy them a gift if your finances allow and don't worry about the calendar.
Come up with ideas of your own to make each child feel special, without breaking the bank.

Updated September 3, 2009