Natalie “Nat” Craven is a financial blogger, mom, and wife. She loves budgeting, eating cheesecake, and exploring Utah with her handsome husband and four active kids.
Nat studied Family Finance at Utah State University. She earned her Bachelor’s and Master’s Degrees in Accounting from Weber State University where she was awarded a scholarship to research taxation. She became a Certified Public Account (CPA). Nat is no longer intimidated by the tax code—even though it is a complicated foreign language. After working in public accounting for a couple of years, she left the industry to raise money-smart children, but kept up her license and education by doing online coursework.
She volunteered and worked for Cornerstone Financial Education, becoming a Certified Personal Financial Counselor (CPFC). There she helped teach personal finance classes and started a financial fitness blog.
Through the years, she found her passion for budgeting as she realized that no one needs a CPA license or a Master’s degree in finance to manage their money well. Budgeting is a super simple principle to understand, but is challenging to apply. Her blog posts focus on the how we can “USE” our budget to reach our goals. Almost everyone has made a budget, but using it is powerful. Follow Nat on Twitter at @cravennat.
I hope you enjoyed the President’s Day holiday. Our kids were out of school on Friday & Monday, so we had a long weekend full of fun times. President’s Day reminds me of tax season. Although IRS technically started accepting tax returns on January 23rd, most of us have not filed because we were waiting for information. Also, some returns weren’t being processed at that time. For example, if you are claiming the refundable portion of the Child Tax Credit or if you are claiming the Earned Income Tax Credit and were receiving a refund, it wouldn’t be paid before February 15th. Now, tax season is definitely here. Unless you are waiting on some K-1s or 1099s, you probably have the forms that you need in order to file your taxes.
I recently attended an 8 hour seminar highlighting the updates for taxes - by the way, that was the short class. The long one was 2 days. Some things in life never change, but tax law isn’t one of those unchangeable things. For this post I’ll mention some of the tax topics that I think the readers here will appreciate. Apply each topic to your situation.
Partnership returns are due on March 15th now, which falls on a Wednesday this year. By the way, whenever a tax filing deadline falls on a weekend, taxes are due on the following Monday. Because April 15th falls on a Saturday and Emancipation day is observed on Monday, April 17th, the tax filing deadline is April 18th this year for individual filers and businesses filing an 1120. (See IRS for more information.)
Tip: If you have some investment accounts, you will want to wait until the final 1099s are sent out. Last year I worked on several tax returns that we thought had the final 1099s, but a few weeks after they were filed, another 1099 was received. Some of these 1099s were not received until mid-March. It is easier, cheaper, and better to wait to file than to amend a return, but returns can be amended. Regardless of when you file, I recommend you prepare the information you’ll need for your return now!
You have until your tax return filing deadline to contribute to your IRA accounts! For most of us, that is April 18th. Each year my husband and I try to reach our $5,500 limit for IRA contributions. Some years we do and some years we don’t even get close, but we aim for it. Having a few extra months helps me. If you haven’t started contributing to an IRA, I recommend you start with a small amount. That’s how we started. How much do you want to contribute before the tax deadline? You need to know this in order to file your taxes. For specifics, check here.
Tip: Always be aware of phase-out amounts. This means that if you earn over certain amounts, the credit or deduction “phases” out until you aren’t allowed any of that benefit. You can look up the specific phase-out amounts for the deduction or credit you may be wondering about. Just because a deduction is generally allowed, doesn’t mean it will be allowed for you. For example, if you are married, the phase-out range for the American Opportunity Tax credit is $160,000-$180,000. This means that as your income reaches $160,000, the credit will ratably be reduced, and if you make over $180,000, it will be gone. I often hear someone say “that is tax deductible” in conversation. I think to myself that it depends on the taxpayer’s income. Student loan interest is tax deductible unless you earn over the phase-out amount. I won’t list all of them here, but you can easily check them on IRS’s website for any deduction or credit that you are considering.
Will you be receiving a huge refund? Emotionally, it feels great to get a large refund. I understand this! I know I’m swimming upstream to suggest that you adjust your withholding, but a large refund means that you are letting the government hold your money. I try to withhold just enough to get a small refund.
Some people tell me that they don’t have the self discipline to save throughout the year so at least that forces them to save. I get that. However, USING your budget will solve this problem, and you can get off that wagon. I’ll get off my budgeting “soapbox” now.
IRS is trying to protect against this. If you want to read more information about possible fraud, click here.
Identity theft is a big problem right now. I personally have a friend who wasn’t able to file her taxes electronically because someone had fraudulently used her social security to file taxes.
This was an important law passed at the end of 2015. Some tax provisions were made permanentsuch as Child Tax Credit, AOTC - American Opportunity Tax Credit, & Tax Free transfer from IRA to charity.
Other tax provisions were extended. For example, the deduction of mortgage insurance premiums was extended through 2016. This is a nice deduction if it applies to you.
The IRS website is a great resource for tax topics. I hope your tax season goes well!
According to ycharts, the average personal savings rate in the U.S. at the end of 2016 was 5.5%.
That is what my family was saving, so we are average savers right now. Savings doesn’t happen without strategy, so this statistic shows we are prioritizing savings, but we can improve this percentage.
Eight years ago, my family had a savings account with a few thousands of dollars in it. We emptied the account in order to pay for a new roof. We saved for a couple more years and then we emptied it again to pay for a fence in the backyard, which we justified as an “emergency.” It felt like we couldn’t get ahead because we were filling and emptying our savings and couldn’t ever move on.
At the same time, I was feeling pressure to save for retirement, vacations, and my childrens' future college and marriages. I wanted the time value of money to be working for us in all of these areas. That resulted in me using that marriage fund for another expense. We only saved a couple of hundred dollars for college, and our retirement savings was minimal.
In 2010, we decided to focus on one savings goal and invest 3% towards retirement. We decided that our first goal would be to fully fund an emergency fund, which we would only use for emergencies. (Home improvements didn’t count as emergencies for us anymore!) About a year and a half into the goal, we had saved ¾ of our goal amount. I felt tired as we hit a savings wall. I started to justify that we had enough saved, but our commitment to this goal helped us to stay focused on it and climb over the savings wall. About a month after hitting that wall, Ty received a promotion and large raise from his employer. This raise was 5X bigger than any raise he had ever received in the past, and it allowed us to reach our savings goal within a few months.
I remember the Magic Eye 3-D images that required me to relax, focus, and disregard all of the distracting images in order to see the 3-D image through the busyness. You have to be committed to finding that 3-D hidden image. That’s what happened when we focused on one savings goal. We were able to ignore all of the busy distractions. We relaxed and focused in order to see the goal realized.
I don’t know who to give credit for the term “savings snowball.” When we were going through our Savings Attention Deficit Phase, I knew about the debt snowball. This focused on paying one debt off at a time while paying the minimums on everything else, and I thought it would be great to do that on the savings side so that we could avoid debt. I googled “savings snowball,” and found the phrase several times, so I wasn’t the first to coin it.
Think about how we make snowballs. My kids have been making a lot of snowballs. They can make a lot of little ones for a snowball fight, but to make a snowman, they have to focus on one and roll it until that snowball gets bigger and bigger. Pretty soon, we have a large snowball to use to build the base of a snowman. Once the snowball is big enough, we can move to the next snowball, which doesn’t need to be the same size as the first. We decide how big it needs to be, and then we roll it until it gets to be that size.
We started doing this with our savings. After saving for an Emergency Fund, we saved for a trip to Disneyland, which was a much smaller goal that we reached quickly. Then we saved for a minivan. Now we are saving for an SUV to replace my husband’s SUV. The savings snowball has worked well for us because we see progress in reaching our goals in a relatively short amount of time.
This method also helped me relax and focus. I don’t goal hop anymore or try to do everything. The percentage of our income that we saved has changed. We started with about 5%, and each time we got a raise, we put it towards savings until we were saving 20%. Then, with our job loss, we weren’t saving at all for a short time. Then, once again, we started saving 5%, which is where we are now.
Look at your budget to determine what percentage number is right. As you free up money by reaching your savings goal or increasing your income, you can add to that. What other savings strategies have helped you?
Over the weekend I bought Valentines for my family. Those are the first of the many gifts that I will buy this year. Budgeting helps me enjoy gift giving and helps me give more meaningful gifts.
The budgeting category of gifts can be challenging. It really is a subcategory that requires more planning. It’s not like my phone bill category that I allocate money and then pay it. Gifts need their own detailed plan within the budget plan.
Gifts and I have a love/hate relationship. I love giving gifts - especially when I find the “perfect gift” that will mean a lot to the person who is receiving it. Long before the Internet, I remember ordering gifts by phone. My sister and I were watching TV and saw an infomercial for a classical rock CD. She got excited and said she wanted it, so I sneakily wrote down the phone number and ordered it. Her eyes lit up when she opened it. That was so cool! I also love receiving gifts - especially surprises. I hate when I feel obligated to give a gift and can’t find one. In the past, I felt like I need to give someone a gift at Christmas because they gave me one, instead of graciously accepting what they gave. I’m trying to eliminate giving out of obligation, but I admit it is still a struggle.
Budgets make gift giving fun because it helps you avoid feeling regrets or other bad feelings. Here are steps to create your giving plan for this year:
Leave some flexibility in your gift budget. I’ve realized that there are some gifts that I’ll want to give that I can’t predict. I leave some flexibility in my budget for the baby showers, wedding showers, and graduations which will inevitably come up. We budget $20 a month to our miscellaneous “giving” category, so that we have some flexibility to give. Including this has been key to our gift budget.
Personalize your gift giving category. Make it work for you. When I give small gifts like the Valentines that I bought, I include them in my groceries. I keep it simple if it is minor, but for big gifts, I plan them out. There is no right or wrong way as long as it is your way! Just figure out what your way is. I learned to do what is right for my family.
Around our 10-year anniversary, I started to feel pressure to go on a big trip. When I thought about why I felt that way, I realized it was because my cousin and his wife had just posted pictures from their 10-year anniversary trip, but we didn’t have the money budgeted for that and didn’t even really want to do that. So, we didn’t. It’s cool that my cousin wanted to do that and had a great time. I was able to feel happy for them and feel content that we didn’t spend money we didn’t have on a trip we didn’t really want to do. By personalizing your gift budget, you give the way you want to give and can feel content.
Plan to save for the gifts that you can predict. Many of the big gifts that we give are predictable, like Christmas and birthday gifts. All of my family’s birthdays fall in the first 7 months of the year. I like this, but I have to plan for it. Some years I save throughout the year for birthdays and Christmas. This year, I don’t have the money saved, so I’m budgeting birthday money for the first six months. My husband is paid bi-weekly. I figured out when the 3rd paychecks of the month will fall, and designated those to go towards Christmas this year and birthdays for next year.
There are a lot of ways to save for gifts. Look at your personal situation to figure out how to save for those. Would it work best to put it all away at once or save every month? If you are self-employed and have a busy season, it could make sense for you to save for all your gifts during that time. Wasatch Peaks has a Christmas Club Account and Budgeter Accounts that could be a great tool to do this. I have used a spreadsheet or budgeting software to make electronic envelopes and set aside the money for birthdays so that I don’t spend it. Thinking through these details has relieved so much stress.
Don’t just give because you feel obligated. When I do this, I feel bad afterward. My mother-in-law asked us not to give her anything for Mother’s Day except a homemade card. This was very hard for me because I love her so much and really wanted to give her a gift. She knew this and told Ty that she would be mad at me if I did something. I learned a lot from this. If we can think of something she would enjoy, like pictures of our family, we give them, and she graciously accepts them.
Express love through gifts. We can’t buy love, but we can buy gifts, and if done in the right way, they can help express love and strengthen relationships. When we were dating, Ty made me a DVD with songs to go with it. He also gave me a watch. The DVD meant a lot to me because it was so thoughtful. And after 15 years, I still have the watch (it just needs batteries). These are gifts that last. Since that time, I remember only one other Valentine's gift. Instead of focusing on Valentine's Day, we try to show love all the time. It’s so fun to pick up a favorite treat for my husband while I’m at the store. We aren’t anti-Valentine's Day - if you buy the heart balloons, big stuffed teddy bear, and heart shaped chocolates, that’s cool with us! My husband has gone to Walmart the night before Valentine’s Day for entertainment. He loves to watch dazed shoppers searching for a gift.
Give what you can afford to give. Often, the best gifts are the gifts that mean the most to the receiver. These gifts are heartfelt, and not because they are expensive. They are often super simple and cheap, but require understanding what would mean the most to the receiver.
Almost 2 years ago, I attended a youth conference with a group of youth and adults. We got to know each other really well on that trip. One of the leaders served as our cook. At lunch time one day, he found out that I love eating the ends of the bread. On the way home from this youth conference, I found out that my husband had be fired unexpectedly and without cause. This was an emotionally hard time for us. We really needed support as Ty & I clung to each other and our young family. One morning soon after, I opened my door and on the porch was a bag of bread heels! I knew who had left them. I’m sure that this unconventional gift that didn’t cost much more than the trip down to the bread store. Most people wouldn’t get emotional or appreciate a bag of leftover bread heels, but that gift is one of the most thoughtful, unique, and meaningful gifts I have ever received. Tears come as I think of the kindness of that dear mentor!
Gifts can be a major or a minor budgeting expense. It’s up to you! Budgets are personal. You can make your gift budget as small or as large as you want it to be.
I have received a lot of gifts over the past 4 decades and I really appreciate those gifts. Budgeting has improved my gift giving! It makes it less stressful and more fun. The work it takes to create gift budgets has been so worth the reward.
In 2006, my sister got married. On the day before the wedding, I was asked to run a few errands to pick up some last minute items for her reception. I bought some music. I also bought a cardboard cutout of President Bush (which we turned into a cutout of my brother who was unable to attend). Lastly, I bought some decorations. A few days after the wedding, I checked my account and saw THREE overdraft fees for $25 each, which totaled $75. When I had made those purchases I knew that I had money but didn’t realize that it was in our savings account and not our checking account. The overdraft fees cost much more that the items I purchased.
First is to plan (aka budget) for parties. Because it was my sister’s wedding, I really hadn’t planned to spend money besides her gift. By planning, you can avoid costly fees and spending hangovers/aches. It was nice of me to want to help out and run the errands for my mom who was very busy, but I should have made sure that I could afford them or honestly said that I couldn’t.
If I could afford them, I needed to make sure that I had the money in my checking account. The items I bought were not that important for the party. We could have gone without them or my mom could have paid for them.
Secondly, I learned that mistakes can teach us. I haven’t had an overdraft charge since that day over 11 years ago because I decided that I would never let that happen again. At the time, it seemed like a very expensive mistake, but looking back, it was a cheap mistake that has saved me a lot of money because I decided to change. This mistake inspired me to become a budgeter.
Although I’m not perfect at budgeting, I have improved so much. Parties are all about celebrating something: life, friendships, and accomplishments. I don’t want the celebration to leave me with regrets. When you follow a budget, you enjoy the party before, during and after. By sticking to the plan, you feel like you do after a workout - you feel good.
For example, a wedding budget could be $5,000 or $20,000. If you have a large budget, you can do an expensive party. If you have a small budget, then it will be a less expensive one. Both can be great, but the budget will determine the party. By spending what you plan to spend, you feel less stress and can really enjoy the experience and the memories which come out of it. I’ve been to wedding receptions that were expensive and some that were not expensive. Both were great because they were what that couple wanted. Some of my favorite parties have been the inexpensive ones. The memories made were priceless.
I’m not much of a partier. It’s probably because a lot of parties involve late nights and I like to go to bed early, but if you are a partier that is great. I saw a commercial for the upcoming Super Bowl parties. If you are a fan, you are counting down the days to watch the Patriots and Falcons face off in the Super Bowl this year. You might be planning how you’ll cheer on your team.
Answering a couple of questions will help you decide the best way for you to plan the finances for your parties.
Parties are a great way to enjoy life and make incredible memories. Budgeting for these parties will help make them successful and allow you to party on without regrets!
With snow piled taller than me, it’s unthinkable that someone would wait in line for two hours to play in the snow. But, my sister and her family went to a Winter festival in Houston, Texas, and the city had hauled in a load of fake snow for it. There was a long line of Texans waiting to play in the “snow.” Being from Utah, she was amazed. Her kids wanted to wait, but she couldn’t make herself wait in a line for two hours for fake snow. I wish I could mail some of Utah’s snow to my Texan nephews. We are running out of places to put it.
I’ve lived my entire life in Utah. For quite a few winters I took care of babies, and we hibernated. I took the snow for granted. A couple of years ago, I decided we would dress warmly and start adventuring out into the snow. I wanted to enjoy the winter too.
Last Saturday, my family went to the Winter Festival at Wasatch Mountain State Park. After receiving six inches of snow that morning, it was the perfect day for a party to celebrate winter. We went cross country skiing for the first time. Snow shoeing and riding snow bikes were also available. Lunch was provided. The whole event was free for us. The only thing that we had to pay for was transportation to get there. Utah has 43 state parks, so if you are looking for a staycation or a day trip, state parks could be a good fit. The fees are low at most of the state parks. We bought an annual state parks pass $75 ($35 for seniors), and it has been well worth it.
To find out about upcoming activities, you can check out the Utah State Parks website. This year is the 60th anniversary of the state parks. Each week there will be some activity at one of the parks to celebrate. There will be “hiking, fishing tournaments, dances, winter festivals, and more!” We were told that each state park has its own mailing list, which is how we found out about the Winter Festival. Iif you are interested in a particular state park, you can ask to be put on their email list. There are two Winter Festivals this weekend! One is at East Canyon and one is at Bear Lake.
Over New Years we went to Zion’s National Park and saw tourists from all over the world. This made me realize how neat our Parks are and gave me the desire to go to them more often. Because they are so close, sometimes I take them for granted.
Staycations and day trips are great and Utah has so much available, but kids grow up. I want to do a big trip to Disneyland and San Diego. My sister’s family just moved to Alaska. I miss her, and I want to visit them. She’s very adventurous and has found so many beautiful and adventurous activities in Alaska, which we would like to do. We also are planning a trip to Spain in a few years.
While growing up, my husband’s family didn’t take expensive trips. They loaded their family in a Volkswagen Rabbit and went camping. My husband loved it. He didn’t feel deprived. He is content taking camping vacations. Their family lived debt free.
My mother-in-law is one of the wisest women I know. So, I asked her if she would do the same kinds of trips that she did having the perspective that she does. She said that she would see everything close in Utah, but she would also put a few dollars away each month to be able to go on a neat big trip every few years. She would still pay for them in cash, but she would prioritize doing some trips that are important to her family. She regrets not doing a few more big trips.
Personal Finances are just that - PERSONAL and INDIVIDUAL. Which means that budgeting is not just mathematical, it’s emotional! The emotional aspect of personal finance can be the hardest part. It requires self-discipline, focus, and delayed gratification. It’s an emotional struggle to delay gratification! With our budget, we plan to enjoy staycations and day trips at Utah’s many state and national parks, but we also look forward to big trips that are important to our family.
You know that it’s January when ... you drive around the gym parking lot for 10 minutes without finding a parking space!! That happened to me last week. Finally, I stopped, waited for someone to come out of the gym, and I followed her to her car so that I could get a parking spot. My friend and I call this the January Gym Crowd. After January, the crowd usually shrinks. The gym was so packed one night that I couldn’t even park in the parking lot!
Ever since that night, I’ve been thinking about the resolutions we make. The resolutions that don’t last are the ones that I'm not really resolved to do. The resolutions that stick are the ones that help me to become something, rather than to do something. When I resolve to change who I am in order to become healthier, it doesn’t matter if I miss a workout or overeat one day. My commitment helps me to try again the next day. I have written many blog posts about how to do something related to finance. I am not talking about how to make or do anything today. This is all about how to become financially fit by committing to financial fitness.
I struggle with consistency. A friend told me that there are different seasons of our lives. She helped me realize that I can’t be consistent in everything all the time. When it comes to finances, we don’t always have the same level of consistency, but we can be consistent in our commitment to our financial health. Our effort doesn’t always have to be equal. There are seasons when we spend more time on our than other seasons. That is okay.
My commitment to personal finances has developed over time and with different experiences: my dad’s death, my friends retiring early, and experiencing unemployment. No one can give this commitment to you, you have to find the reason for your commitment. I’m committed to financial fitness because I want to have financial freedom. If my commitment isn’t strong enough, I won’t stick with it.
Once you’ve make a commitment to financial fitness, you can expect it to be tested. My commitment is often tested. Here are a few suggestions that help to stay committed.
It takes a lot of inner strength in order to avoid comparison. Last October, I realized that comparing was a weakness of mine, and since then I have been practicing eliminating comparisons in my life. The effects of comparison are really damaging. Either I feel better than or worse than someone else. I don’t like that feeling. Plus, comparison can kill commitment if I let it. Comparison is a bad habit that is tough to break. Here are a few exercises I’m doing to help break the comparison.
Yesterday I told my friend that we aren’t able to meet our retirement goals, but we’re doing more than others so if we are not okay financially in retirement, no one else will be okay. I thought about the comparison I made and realized I was trying to justify not reaching our goals. I thought about how I can change what I said next time.
I’ve been journaling and call it my journal “JOYrnal.” I try to live with childlike joy. On Friday night, I bought pizza for my kids. My son’s eyes lit up and he screamed, “We’re having pizza!” It amazed me how much joy he found in a $5 pizza. To help me remember to journal, I write before I eat dinner. I learned that from a musician, Lindsey Stirling. In an interview, she said that she never forgets to eat so she ties important things that she wants to do with eating. I never forget to eat so that has helped me!
The past few months I have exercised with an awesome friend. She is always encouraging me to be my best. I hadn’t lifted weights for a long time, and I started out with small amounts. She told me “Good job!" when I completed a set. She strives to be her best and doesn’t compare or compete against me. My husband also does this. He encourages me. One day after taking a cycling class, Ty asked how it went. I told him that it was rough and I didn’t do very good. He said, “You made it there. That’s good!" Last week, it was a struggle for me to get out of bed and get to the pool. After I swam, I encouraged myself.
Even though my husband and I are not maxing out our retirement plans, we are contributing! We are teaching our kids to save and invest! I encouraged myself to keep investing. We are meeting with an investment adviser this week. That is good!
I make mistakes all the time, in every area of my life. Forgiving myself allows me to stick with the commitment. This weekend I watched a talk by J.K. Rowling, who is super successful writer, and she talked about how she had failed in so many ways that it helped her to focus on the one area she had left. Her talk actually inspired me to fail! She said that a benefit of failure is that it allows you the chance to rebuild and commit.
Focusing on one goal helps me stick to my commitment to be financially fit. Looking back, in 2010, I was trying to do everything financially. Each time that I would hear a new suggestion, I would add it to my list. I was saving for retirement and paying down our mortgage. I was also saving for my kids marriage, mission service, and college as soon as they were born. I actually TOOK my newborn and my young kids to the credit union to set up an account for the baby. This is really comical to me now. I LOL at myself!
I had to learn an important lesson about focusing. By trying to do everything financially, I didn’t see progress. I only saved a few hundred dollars towards college. I ended up having to use the kids marriage funds for something else. So, I stopped doing everything, and in 2010, I focused on saving an emergency fund. It took two years to build it. Then, I focused on increasing our retirement. By focusing on one financial goal, it has allowed me to relax and experience grace with my finances. I don’t feel bad that I’m not saving for my kid’s marriages. In a few years, that will be my focus. Right now I just want them to stay little!
Committing to financial fitness is so important. It will help you avoid comparisons and distractions. It may be the most important resolution you make!!
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?
Happy New Year! Not a lot changed at the end of 2016 for me, but the holiday is a break from school, so we took our family on a vacation. I started to say, “This was a budget trip," but I caught myself and stopped. I thought about how I was going to use the word budget. So many times we use the word budget to mean cheap. It was a cheap trip. So, I changed my wording and said, “It was a cheap trip.” Budgeting gets a bad reputation when it is used to mean being cheap. Budget doesn’t mean cheap. Budget means a plan. I like how I feel when I follow plans. Think about how you feel when you are following a health plan. Maybe over the holidays you ate without a plan (like I did), and maybe you felt pretty yucky (like I did). Think about the times when you did follow a plan to exercise and eat healthy. It is hard at the time, but I always love how I feel afterward. Over time, I see great results from following a health plan.
Imagine building your home without house plans! I have several friends building beautiful homes right now. I can guarantee that every inch of those homes was included in the plan in order for them to turn out the way that my friends want them to look.
Budgets are financial plans! How do you want your finances to look? If we could think of budgets like building our dream financial home, budgeting could change. We could be excited about it even though we may hate some of the work and discipline involved in the details. There are so many decisions to make when you build a home. Some are big decisions, like square footage and number of rooms. Some are small, like style of doorknobs. Some are almost permanent and some are temporary. It’s not easy to knock out a wall, but changing a door or the color of paint is relatively easy. The more you think about the details, the more likely you are to get the house that you want.
We have big financial decisions that impact us for years, and then we have minor ones that still impact us but not as much. How would our finances be different if we had to submit a plan before we could spend? Well, no permits are required in order to spend money. So, we have to require ourselves to budget. Budget is both a verb and a noun. It’s an actual piece of paper that details out what you will spend, but it is also a process of using that piece of paper and referring back to it before we spend. You don’t have to be perfect. Budgets are flexible. When we do make mistakes, we can change by remodeling. However, we can prevent having to redo a lot by planning!
I love the feeling of being on a plan and a budget, and even though I get off track in the holidays, it’s a NEW YEAR, and it’s a new month. What if we could change the way we view budgets and make them a part of our lives? They aren’t required of us like building plans are, but we can require them….every month. I can’t force you to do one. Wasatch Peaks can’t force you to do one. But we are here to help and encourage you to budget so that you can create the financial house that you want, and feel great about it! I promise you great results as you follow your financial plan over time.
Wasatch Peaks has the option to create Budgeter Accounts. This makes it easy to save and budget by allowing you to have up to 30 budgeting accounts withing your account to put money into and keep seperate for easy tracking. Each budgeting account has a specific name for each budgeting category (Rent, Insurance, School Expenses, Groceries, etc.) so that this budget plan can be customized just for you! It can be pre-set so money is automatically tranferred to your Budgeter Account from your savings or payroll and divided up into each budget account.
Every trip is a budget trip. Every decision is a budgeting decision! I am going to make my January budget right now and invite you to make yours! If you have any questions or want someone to help keep you accountable, please post. Please post your struggles with budgeting. For me there are a handful of categories (food, vacation, clothes) that I have to watch carefully, but the other categories are fixed and don’t require much. Where do you overspend?
This morning was hard to get up. My husband's alarm went off and I woke up to use the bathroom. My body felt sore. I felt the effects of the cookies, bacon, and chocolate covered popcorn, which I ate yesterday. I felt cold as soon as I got out of my bed. I wanted to go back to sleep. I felt gravity pulling me back to my warm bed. I thought of all the work ahead of me today. Except for the bathroom, every room looks like it experienced a tornado. Christmas was a busy day for my family. I visited 3 families, attended two church services, and had a sick child. The house was now a disaster zone. This can also happen financially over the holidays.
Somehow, I found the strength to walk past my bed without getting back into it. Somehow, I meditated and planned my day. This was a HUGE victory for me today. I think it was because Christmas gave me the belief that I can change. Seeing friends and family and feeling loved inspired me to keep trying. Experiencing kindness and generosity inspired me to want to keep moving forward. Even though I overspent, I can recommit. Even though the house is a mess, we can restore order one item and one room at a time. Sometimes we don't feel like waking up financially, but every day is a new day. If we mess up and give in to a purchase we didn't plan on, or miss a budget meeting, we can start again any and every day. In the big picture, it's not really going to matter that I spent a few more hundred dollars than I wanted to spend, as long as I keep trying.
During this holiday, several of my friends and family have told me that they want to get on top of their finances. They want to budget. They want to plan for taxes. They want to invest. These friends and family have asked my advice on budgeting and asked what app or system they should use. Some of them face huge obstacles in doing this, so I don't want to minimize how hard it can be to change financially. I will compare it to my experience with exercising.
I started exercising regularly a couple of months ago. At the gym, I am surrounded with healthy and strong people. I think about what they had to sacrifice to build the muscles that they have. It is a long and gradual process, and it can't be faked or sped up. There is no shortcut. I can't just be stronger because I want to be. For the first time, I have been weight lifting with a bar and weights. I started with just the bar and am adding small amounts. I can't just put a 35 pound weight on the bar and lift it. I have to sacrifice, plan, and build up the strength. I have to commit. On Christmas Eve I went to a hard interval training class. The teacher pushed herself and admitted it was hard, but at the end she encouraged us and played inspiring music that talked about getting back up and try again. I left feeling so inspired to celebrate my victories and keep trying.
There is no magical app that will make me in shape or get my friends to budget. It doesn't really matter what app you use. There are a lot of good tools, but there is no magical app that will force us to be disciplined. However, exercising at the gym helps inspire me. I believe I can get stronger.
Consider this blog to be your financial gym. Come here to believe that you can change, and surround yourself with people who are growing stronger physically and believing that they can improve. Happy New Years. Enjoy the holiday!
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?