My family officially has our first pets!!! We’ve have had butterflies, rolly pollies, and other insects, but on Saturday, we bought three colorful guppy fish. My four-year-old stared in wonder at the fish tanks full of many kinds of fish. For Christmas, we gave our kids gift cards to pay for their fish. I hadn’t planned on the cost of the rocks and decorations for the tank. Those ended up costing four times more than the fish! As our kids started picking out the decorations for their fishes’ home, I was not sure how much to spend or what money to use. The decorations cost $10-$40 a piece. One piece of coral, which my son wanted, cost $35. I told him that he would need to use his money if he wanted to buy that. He put it back, and we got enough decorations for the whole tank for the price of that one decoration. I decided we would use our Christmas money to pay for the decor since they were part of their Christmas gift. I learned that I should have considered and planned for the cost of accessories of the tank.
Our fish buying experience got me thinking about how we, as parents, decide what we will buy for our children and what we let our children buy. This wasn’t the first time that we had this situation come up. In fact, it comes up frequently. We could go overboard either way: make them pay for everything or buy everything for them. There is no fixed rule: every family decides what they will do. Here are a few issues that we consider:
Are my children learning how to work? If the answer is yes, I am more likely to want to pay for more of their expenses. If the answer is no, I am less likely to pay for their expenses so that they can learn to work.
Are they learning to be good stewards of money? I want to be generous to them. However, if they spend their money thoughtlessly, I don’t feel it is wise to give them money. They will never have enough money if they don’t manage it.
Are they acting entitled and bratty? Recently my oldest daughter got her money ready to pay for a field trip. I was glad that she was taking responsibility and was willing to pay for her own expenses. Because she did not act entitled, I really wanted to pay for the trip. I told her that she didn’t have to pay for it and expressed how proud I was of her. In contrast, last week my four-year-old threw a fit in the car. On the way home, we went through the Wasatch Peaks drive through to make a deposit, and she wanted a sucker. Even though it was free, I did not get her a sucker. I told her that throwing fits is not the way to get what she wants from me. If she had calmly rode in the car, I would have been more likely to get her a sucker. She learned. A couple days later, we went to the credit union again. She had been calm and obedient, and she got her sucker.
As with many aspects of parenting, for me it depends on the attitude of the child and the situation as to whether I will pay for expenses. We are learning as we go, and enjoying all that we are learning together.
What are some things that you consider before paying for expenses? What teaching moments have you had or received from your parents?
The New Year is a great time of renewal. That makes it a good time to make bold, decisive changes in your life. Leave behind the baggage that was 2016 and start fresh with a blank slate in 2017. If you’re looking for some resolutions to improve your personal finances, we’re pleased to offer seven ways to make 2017 the year of the dollar!
If you’re looking to take your first steps toward financial literacy, figuring out where your money goes should be at the top of your list. If you don’t know where your money goes, it’s going to be tough to follow through with any other money plans. You may have a general sense of how much you spend, but after a month where you’ve recorded every dollar, you’ll have a much better picture. Using Peaks Money Manager™ can automate the process. You might even find that keeping track of what you do with your money encourages you to spend a little more judiciously.
About 70% of Americans live financially spontaneous lives. They don’t make a plan for spending or saving. When asked why they chose not to do so, the most common response was that the family spent all the money anyway. This is a circular problem. If you don’t have a budget that includes setting aside money for long-term expenses and savings, you’ll end up spending all your money on unplanned things and events. The best way to stop the cycle is to sit down and make a budget that modifies your spending to be more in line with your priorities.
Easier said than done, right? However, there’s no bigger stumbling block to financial security and wealth building than debt. It’s hard to save for long-term goals when so much of your monthly income gets eaten up by interest and fees. There are a variety of methods you can use to help accelerate your payoffs. For instance, you can add an extra $50 or $100 to your credit card payments. Or, you can focus all your payment resources on the highest interest debt until it’s paid off and then move it all to the next highest for snowballing your way to freedom from debt.
The best way to avoid going into debt is to have some money on hand to handle the occasional, yet inevitable, emergency. Most Americans, though, can’t come up with $500 in such instances. Set a specific goal, like adding $10 per month to a savings account. At the end of the year, you’ll have more than $100 available in case something goes wrong.
You can’t save for what you don’t think about. When retirement is years or decades away, it’s difficult to incorporate thinking about it into your daily routine. If you have a retirement account open, you’ll get monthly statements, which serve as reminders. The challenge, though, is taking that first step. Don’t let perfect be the enemy of good. While there are important differences between Roth and Traditional IRA accounts, either one is better than no retirement savings at all. If your job offers a 401(k) matching program, sign up to get at least the full matching funds amount – it’s free money. Do a little bit of research, then open the account that seems like the best idea.
Saving money takes willpower. Because it’s hard to practice self-denial on a constant basis, that extra $5 you’ve earmarked for savings can very easily turn into a mid-morning coffee. Fighting that impulse is a constant struggle. That’s why it’s easiest to avoid the decision altogether. Change your direct deposit to put some of your paycheck directly into a savings account, where you won’t even think of spending it impulsively.
Knowledge is power, and that’s especially true in the world of personal finance. What you know about your money goes a long way toward determining how much of it you get to keep. There’s a lot to learn, but you’ve got a wealth of information at your fingertips. Resolve to read one personal finance article a week. Not only will this give you good ideas for improving your personal financial situation; you’ll also spend more time thinking about your money. That’ll lead to positive results down the line!
Happy New Year from all of us at Wasatch Peaks Credit Union. We hope you have a safe, happy and prosperous 2017!
What resolutions are you making this year? Will 2017 be the year you join a book club, quit smoking or spend more time with your family? Let us know in the comments!
Everyday life gives us opportunities to teach others by using money. Here are a few we have had this month.
My daughter loves playing basketball. She plays at recess with the boys in her grade. On Saturday, we went to the last game of the season for her recreation team. She has been invited to play on a competition team. Jackie and I discussed how much time and money it would cost her. We decided that playing on this team would be good for her. I asked when the fee was due. Her coach (who knows me well) said that if I needed to wait to budget for it, that was fine. I told her that I was letting Jackie pay for it. I pay for some of their wants, but this one I thought she would appreciate more if she paid for it.
I withdrew money from Jackie’s account for the competition team fee. Then I withdrew the amounts for their paydays from my account. Wesley (8), said, “Hey, you aren’t really paying us. You are just taking money out of our accounts and giving it to us.” After I laughed, I explained bank accounts and how they all had account numbers and I used different account numbers for each withdrawal.
This is the first year Tommy (6) has eaten lunch at school. He prefers school lunch to packing his own lunch. He often left his lunch at home, so he went through his lunch money fast. I told him his balance was low, so he needed to pack his lunch to take until I paid more lunch money. He didn’t listen to me, and his account went negative. I told him that it wasn’t honest to eat without paying, but he didn’t understand. He responded, “No, it’s free.” In this electronic age, there is often a disconnect with what things cost. I remember taking my lunch money, and knew that I had to pay.
Fast forward a few months, and a neighbor posted on Facebook about her son not being able to eat because of low lunch money. That reminded me to pay for lunch since the balance was getting low again. I sent lunch money with my ten year old. Her dad asked if she had paid it, and she said yes. But I keep getting emails about low lunch money- especially for her and my school lunch loving first grader. So, I asked her again if she paid. She said, “I thought I did.” But then on Saturday, she found her lunch money in her backpack. These simple experiences are helping them learn responsibility.
This was a recent conversation between my kids. Chloe (4) said, “Santa is going to bring me a tramp.” Jackie (10) replied, ”First of all, it won’t fit in his bag. Second of all, it won’t fit in his sleigh. Third of all, it won’t fit under the tree.” My four year old replied, “It’s going to be a little tramp.” She has since changed her request. She is now asking for, “A talking dog that talks like us.” Where is Clifford when you need him?
Chloe is often my shopping buddy these days. She usually wants so many things every time that we shop. While we were waiting in the checkout line last week, she saw a Tootsie Roll Bank. She said she wanted it, and I told her no. I showed her how much it cost. I taught her what the dollar sign looks like and then talked about how it was $1. I told her that she had money to pay for things like that. She didn’t have her money with her and delaying her immediate gratification was hard.
Jackie (10) and Wes (8) decided what they were going to give everyone for Christmas. They have been earning their money so that they can buy their gifts. We went to to the Dollar Store. Jackie bought presents for each member of the family and for each member of her class. She also wrote a poem to go with each of the presents. My kids went to the checkstand before I was ready and backed up the line. Even though shopping was chaotic, thinking about their giving hearts is making me cry as I write this.
What experiences have you had teaching about life through money?
My family cut down our Christmas trees in St. Charles Canyon this weekend. We figured that the weather would be pretty cold and snowy up in the mountains. So, we packed our snow clothes, but the good gloves were missing. My kids hadn’t put them back after they used them a couple of weeks ago. They had to use thin gloves and complained about their cold hands. We woke up to a blanket of snow this morning. Are you ready for the winter weather?
Winter storms remind me that the end of the tax year is coming up for most business and individuals. I need to prepare so that I’ll be ready for tax season. I’m going to be looking at a few areas of our finances:
Non-cash charitable contributions can include toys, cars, clothes, furniture, etc. Here’s the link to the IRS instructions that gives more information for donations that are worth more than $500. Our bookshelves are full. My kids rooms are so full. We are definitely not minimalists and might even be hoarders. I have been putting off Christmas shopping because we don’t have room for more stuff, and I don’t want to buy more stuff that will clutter our home. I’ve decided that we need to get rid of old things to make room for new things. We do a family work project each day. This week we are going to declutter our home. If you itemize deductions on your taxes, decluttering can also provide a tax deduction. Most people know that this is the last month of the year to donate tax-deductible items, but it’s easy to get busy with the holidays and not get around to doing it. I know from experience. So, I’m going to call around this week and find out where these can be donated. We have a van that hasn’t sold, so I started researching about donating cars this morning.
If you have stock that you would like to donate, check with charitable organizations about how to do this. This can be a great way to donate to your charities. I haven’t personally done this, but have seen it done by tax clients, and it can be a great benefit to you and the charity.
You can always donate money to charities, and there are so many people and charities in need of donations at this time of year.
How much did you contribute to your retirement account this year? Remember that you have until April 15th to contribute to your IRAs, but this is a great time to decide on how much that will be. Especially if you make lump sum contributions instead of regular contributions.
You can check with Wasatch Peak’s Financial Advisor, James Aoki at 801-627-8732, for more information on investing for retirement and the services available to help you.
One of my friends kept all of her tax related documents in a folder so that it was ready for tax season. I started doing that a couple of years ago, and it really helped me keep track of donation receipts throughout the year. I spend plenty of time searching for lost items, so anything that can help me with this weakness, is great. This could be done electronically by scanning in receipts. I did that for a while. Experiment and see what works best for you. There are a lot of ways to do this. Do you already do this? If so, please share how you do this.
This will depend on you and what’s available at your job. Did you have too much or too little withheld? Do you want to keep the same amounts for your health savings or cafeteria plans? My husband is starting a new job today, which will make us re-evaluate all of our withholdings, but you don’t have to start a new job in order to do this.
By making a few preparations now, taxes won’t catch you off guard.
Is your summer planned? My family is finishing up our plans. Summer has unique expenses. We have a few fixed expenses like our mortgage, but then there are slurpees, camping trips, and entertainment expenses that we don’t have at other times of the year. These are always challenging for me to plan for them. Sometimes we slack off with budgeting in the summer.
Here are a few ideas that help my family enjoy our Summer while still budgeting.
Look at the Past
Looking at past summers helps me predict costs for this summer. Although you may not go to the same places, you can add up what you spent on vacations, swim lessons, pool passes, Slurpees, and home repairs.
One area that surprised me this year is clothing expenses, but it really shouldn’t have. Swimsuits usually last one summer for my kids. They outgrow sandals by the end of the Summer. They also outgrow their summer clothes by the next Summer. When it got hot, we realized that none of my kids had summer pajamas. How much did you spend on clothing last Summer?
If you plant a garden, how much did you spend on seeds and plants? One of the first years we planted a garden, I was surprised at how much the plants cost and realized we needed to include that.
Decide what’s Important to You this Summer
We can’t do everything. Wasatch Peaks motto is “Reach Your Peak.” How do you reach your peak? What do you want out of summer? Do you want to hike, swim, read, and/or watch sports?
My husband and I want to repair our Volkswagen this summer. After we figured that out, we started researching how much money we would need in order to do that. We spent less on buying our SUV so that we could fix up our VW. We always do some free activities in order to allow us to do what is most important. These include hikes, parks, and grocery shopping dates. We have friends and family who let us swim for free. How much do you want to spend on food Although we don’t have school lunch expenses, we do love to go on picnics in the summer, so we need to figure in our $5 pizzas and other snacks and drinks we want for our adventures outside.
We also want to finish our yard this year. Ty bought a bunch of supplies for our garden/fence supplies and pebble rock. It cost hundreds of dollars.
Are you moving this summer? There are a lot of costs involved in that.
One thing that doesn’t change in the summer is that we have unexpected expenses. Last week when we turned on the air conditioning and it didn’t blow cold air. I need to have it repaired. Our air conditioner is 19 years old, so this expense could cost anywhere from a hundred dollars to thousands of dollars.
I’ve had friends and family go through surgeries. Today my sister has a surgery. Although we don’t what they will be, we can expect to have some of these expenses. My family plans for these by having our emergency fund.
We have an HSA for unexpected medical expenses like cavities and other medical expenses. I hope these tips help you have the Summer that you want. Please post additional tips that help you.
During the last couple of weeks, I have received some graduation announcements. Mail is always exciting, but this mail is not only exciting for me but for the six graduates who sent them. Work, college, moving, missions, marriage and other adventures are in their future. Congratulations to all high school graduates! Enjoy the celebrations, gifts, trips, and memories! This post is for you.
After your celebrations are over, I’ve got a few financial questions to help you prepare for these adventures.
If yes, make sure it is what you need. If you plan on moving, will that account still work for you? Online banking may allow you to keep using a current account. If you don’t have an account, you can set one up online here.
How many withdrawals or transfers can you make per month without incurring fees? How much will you be charged for insufficient funds? How many checks can you write?
Checking & Savings accounts need to be reconciled. What does that mean? Like so many English words, reconcile has latin roots. It means: bring back together. When you reconcile, you are comparing your balance to the banks balance. This will prevent a lot of charges due to insufficient funds and help you catch any fraudulent charges. You can reconcile your bank account anytime. But, no one is going to force you to do it. Wasatch Peaks Mobile and Online banking are great tools to help you manage your finances.
If yes, keep it up. If not, why not? When I asked my sister how budgeting was going during her first year of college, she replied that she didn’t have any money to budget. If you don’t have much money, budgeting makes the most of what you have. Like banking, you can budget from your phone or computer.
The earlier you start budgeting, the easier it will be. Why? You can learn to budget with just a few expenses. These are different for every person: entertainment, phone, gasoline, food, clothing, utilities, and rent. If college is in your future, tuition is due by the end of summer. Look up the exact due date for your college tuition. If renting an apartment, when is that money due? Is it monthly or for the whole schoolyear.
Do you know if you will need to file taxes next year for the income you make this year? The IRS website has all of this information. Are you going to claim yourself or are your parents going to claim you on their tax return? Full-time students can be claimed until they are age 24. It is usually more advantageous for parents to claim college students. You can discuss this together so that you all know what to expect
If you don’t have to file, but you had taxes withheld, plan to file your taxes so that you can receive the refund due to you.
What should you be claiming on your W-4? It depends. Tax tables assume your income level. For example, if you make $500 bi-weekly, taxes are withheld based on you making that year round. But many college age kids work more in the summer or have multiple jobs, so don’t rely on the tax tables to withhold the right amount. You many not need any money withheld which will give you more money to pay expenses.
What Forms do you need to be keeping/getting at the end of the year? Keep proof of what you paid for tuition and fees so you can claim College Tax Credits. If your parents claim you, they will also claim the credit. Keep W-2s if you are an employee. If you are going to be moving a lot, have these sent to your parent’s address or make sure to have them forwarded so that you aren’t chasing them down later. Some companies make W-2 available online, which eliminate this problem. If you are self-employed, set up a bank account to keep track of your income and expenses.
Finding answers to these questions will help you be successful and that is our goal!
The phrase, “Rob Peter to Paul," refers to times before the Reformation. Originally it referred to neglecting the Peter tax in order to have money to pay the Paul tax, according to Wiktionary.
If business owners don’t put aside money for taxes, this can happen. Mandatory payroll tax withholding has eliminated this issue for many individuals, however, I have run into this situation with budgeting. I remember taking money from my clothing budget to eat out, and then didn’t have money for clothing.
There are two houses under construction in our neighborhood, and we notice the daily progress when we drive by. Last week, one had windows installed. I remember when my brother-in-law built their home, and he told me about the plans for the windows. I hadn’t ever thought about having plans for windows. They are measured perfectly to fit into the house right where you want them. Building a home is a very orderly process and you wouldn’t want to run out of room for windows, bathrooms, or anything else important to you, so they are included in the plans.
Budgets are plans to build our financial house, and as a financial coach, I want you to end up with the financial results that you want. Here are tips that help me.
Make Your Financial Plan
When we see other houses, we decide what we want and do not want in our house. We consult architects, Lowe’s employees, or handymen to help us design and create our home. My family bought a home already built, and over the last 10 years we have changed what we do not like. Financially we make plans and change what we do not like in our financial situation. We can always use the help of great financial advisors and helpful financial services at Wasatch Peaks Credit Union.
Use the Plan
If a builder never looked at the plan that they made and didn’t follow it, what would happen? If a team and a coach didn’t refer back to their game plan to run their plays, would they get the results that they were hoping to get? What happens if we make a budget but don’t look at it? I did this when we started budgeting. I made a plan at the beginning of the month, and I didn’t look at it until the end of the month. I’ve already admitted my weakness to spend money impulsively, so to combat that, I now look at my budget when things come up and if that expense isn’t in my budget, I usually will not do it. I refer to our budget almost daily now.
Personalize the Plan
Personalizing our budget has helped me a lot. We're not doing what our neighbor or friend does, we are doing what our family wants and needs. I’ve learned to leave some flexibility. Plans can change, but they are usually minor changes. This past week I needed to pay for a babysitter, which I hadn’t planned originally this month so I used my savings to cover it until we are paid this week, but I did not rob the clothing budget like I have in the past. Coaches have to adjust their plan based on how the game is going. There are some things we just can’t control, we can plan how we will react and adjust.
These simple tips have helped me see the power of budgeting!
As a mom, I have opportunities to say No to my children on a daily basis. I am actually becoming good at telling them no in a constructive way. My sons love to watch movies and play video games for longer amounts of time that I allow them, and they usually throw fits when I tell them that their time is up. On Saturday one of my sons tried to extend his game time and asked, “Can I just finish this game?” I said no because we were going to spend the afternoon together making cookies for friends. It’s much harder to say no to myself, but I’ve had to learn to say no to some things so that I can say yes to more important things.
Budgeting helps our family to say yes to some purchases and no to others. Last week, I wanted to read a book that my library didn’t have. I found it online for $5, and there was money in the “education” budget category, so I bought it. However, I remember wanting to help my brothers pay for post-graduate schooling. They didn’t ask for money, but as I saw them struggling financially I really wanted to help. I looked at our budget and realize that my family didn’t have money allocated to give them. I considered the categories that I would need to change in order to give and realized that they were a higher priority. That was hard for me because I love to give, but it motivated me to get into a better financial position so that we could give to others more in the future.
I’ve been working on prioritizing what’s most important. To help me remember, this month has been “NO”vember for me. I love that “NO”vember leads up to and ends with Thanksgiving. Giving thanks is one of the best tools to help me to say no. I’m thankful for my 1999 Dodge Caravan. It has many “special” features. Recently, I picked up my kids from school and my door would NOT close. My kid’s principal and two teachers assisted us to try to close it. It was a pretty comical scene looking at it from an outsider's perspective. In the past I would let myself feel embarrassed about my “special” car. I rejected those feelings this time, got out of my seat and used my door opening skills. I lined up the door lock, which released the door, thanked the principal and teachers for their help, and drove away feeling thankful that the door closed.
(As a side note, this isn’t the first time that the door hasn’t closed. One time I was stuck at the post office for 10 minutes trying to get the door to close. I almost gave up but as I envisioned a van passing by with the door wide open, I knew I had to get it shut.)
Saturday night while running errands with my husband, I saw a man and his two kids walking down Wall Avenue in the dark and cold and felt so thankful for our warm, reliable, and very special van.
With Christmas around the corner, we are warming up to give presents. Maybe one of the best presents we can give is thanks. Thank you!!! Happy Thanksgiving!!!