Beginning Habits of Money Management
April 11th, 2012 - Category: Budgeting
Remember when we suggested that your kids (and you) keep track of every cent spent for 30 days? How is that going for your family? Hopefully, it’s starting to become a habit – one that will continue beyond the initial 30 days. It’s important to have a clear picture of your spending habits as they really are and not as you may think they are. Remember, this is not a time to make judgments on how your kids (or you) handle money – this is simply to track spending habits, not change them; at least, not yet. Record-keeping helps take the mystery out of our spending habits, as well as eliminate excuses. Just don’t use it as a time for lectures to kids or self-depreciation. This record will later become a useful tool. As we learn better, we can do better.
There are several ways to go about this type of record-keeping. Get a receipt for every transaction; even a stick of gum or a soda and keep it in an envelope or certain part of your wallet. If no receipt is available – write it down and keep the note with your receipts. Each night, gather your receipts and log your transactions into a spreadsheet or Qicken® or a small notebook; whatever works for you. Small purchases are the easiest to be overlooked so pay special attention to them. You may prefer to carry a tiny notebook to record your expenses in. Find a method that you can keep up and help your children do the same and then stick with it.
Keeping track of your money is just as important as saving your money. Now is the time for a little OCD to kick in. Every time any of you get money (paychecks, odd jobs, the kids’ MyJobChart chores, even a dime picked up off the ground), LOG IT IN. Do the same thing every time money is spent; every cent that enters or leaves your life … write it down. Be sure to remember the three-legged stool of financial literacy (“saving, sharing and spending”) we have discussed in previous blogs and enter the amounts saved or shared. Record EVERYTHING.
As you and your kids do this, you will feel a sense of power. You will start being in charge of your money instead of the other way around. And if you are one of the lucky ones who has mastered these skills already – more power to you – but for those who still feel at the mercy of their money, or lack of it, it’s time to show the money who is the boss. Children who learn money management skills before they leave their home for college and employment as adults will find great joy, peace and success in their lives. And speaking of college – next week, we’ll delve into saving for college – a huge aspect of financial literacy. Talk to you then.
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