Living Within Your Means
Teach your children how small steps can equal big savings
-McKenna Powell, themomcrowd.com
The American population has been revved up since the elections, and the economy has been on everyone’s minds. I thought it would be a good time to discuss our responsibility to ourselves, our families and to our society to start living within our means. Our society has a “have it all, have it NOW” mentality, and we are seeing firsthand what happens when individuals in our society – and even our own government – live outside of their means.
Other than the good old “makin’ a budget and stickin’ to it” plan, there are some small steps you can take to help yourself start living within your means. Not only can you use these ideas to help yourself to start living within your means, but you can also incorporate these philosophies into your parenting strategy. It’s important for our children that we set an example of living within our means and that we teach them that they need to live within their own means.
Here are some philosophies we try to live out within our family:
“The Latte Factor”
By now, you’ve probably heard of this term. The basic idea is that lattes are what get us in trouble financially. For some, it is literally the lattes (from Starbucks) that are making big dents in their budgets, but for others, latte is figurative for other little purchases made throughout the week. Most people don’t know where their money goes after they get paid, and these small purchases are usually the culprit of this disappearing money.
If you spend $1.18 a day on a Diet Coke (guilty as charged), that’s $36 every month. I’m not saying you should stop buying your favorite soda every day, but those small-dollar purchases can really impact your monthly budget.
My husband is constantly grilling me about “the latte factor,“ and while it can be irritating at times, I appreciate that we are aware of where our money goes each month because we are paying attention to all of the transactions we are making.
Parenting Tip: Encourage your children to keep a record of how they spend their allowance. If you know they are really anxious to buy the new Guitar Hero game, you can help remind them that when they buy bubblegum from the machine, they are delaying their coveted purchase that much longer.
“Do I Really Need It?” and “Can I Afford It?”
Do you really need 1,000 minutes and unlimited texting on your cell phone? Do you really need 150 channels on your television? Do you really need that gym membership that you’re not using? The answer will be no in most of the circumstances you ask yourself “do I really need this?” The follow-up question must always be “can I afford it?” I’m not suggesting that you live a life of eating rice and beans every night, and I’m not suggesting you get rid of your Internet and use the library computer, but if you can’t afford something, you can’t afford it. There are many fabulous luxuries in our society yet a lot of empty money is spent on channels never watched, gyms never visited and furniture never used. In order to live within your means, you have to be able to tell yourself no at times.
Parenting Tip: Be honest with your children about your family budget and explain to them that if you add an expense, you will have to take away another expense. Explain to them that in order for your family to increase their cable channels, you will have to have dial-up Internet. Allow them to share their thoughts and play a role in your family’s budget.
Keeping Up with the Joneses
Right now, the Joneses are facing foreclosure because the family was not wise with their money. Being the Joneses may be fun for a while, but it will inevitably catch up with you. If you are unwise with your money because you are trying to have it all, you will eventually wind up not having anything.
Parenting Tip: Remind your children that stuff is not what is important in this life. Volunteer as a family at a food bank or a homeless shelter. Expose your kids to families who do not have very much. For Christmas, have your children give presents to children who are less fortunate than they are. Set an example for your children by not complaining about what you don’t have. Being around people who are less fortunate than you are will not only impact your children, but it will impact you and remind you of all of the things you have.
There are some debts that I feel can be classified as investments. School loans and mortgages could be considered investments, when under control. However, the stinky debt I am referring to is stinky credit card debt. If you are using credit cards and not paying them off each month, you are not living within your means. There’s not much more to say about that other than to stop using your credit cards. If you can’t get by without using plastic, eliminate other expenses in your life (cable, cell phone, move into a smaller apartment, etc.) so you can afford your bills and not be consumed by the credit card monster.
Parenting Tip: The best gift you can give to your children is your example. Explain to them how credit card debt works and how interest can consume your monthly payments. If they ask to borrow money between their allowances, show them how interest works and charge them interest on that loan. The main thing is to teach them why credit card debt is so difficult and show them the freedom of a family not living in the chains of debt by not being consumed by it yourself.
If you want to purchase something that is not a necessity, sleep on it. A lot of times you will not feel as urgent about purchasing that item the next day. Another great idea is to have those splurges be a reward for yourself. Set goals (financial, weight-loss, etc.) for yourself and promise yourself that you can buy that item once your goal is met. This practice of “delayed gratification” will not only help your wallets, but it will also help you to be a more disciplined person in general. However, if you cannot afford to purchase a nonnecessity, then you have to tell yourself to wait until you can afford it.
Parenting Tip: If there are things your children really want, tell them to add the items to their Christmas list or birthday list. This will not only make these celebrations more exciting but also help steer your children away from a “have it all, have it NOW” mentality. You can also use the items they want as rewards. Buying them whatever they want whenever they want will not only be bad for your checkbook, but your children will never learn how to live within their means or discipline.
These are just a few tips to help you live within your means. What areas do you struggle with living outside of your means? What steps have you taken to help yourself live within your means? How are you teaching your children to live within their means? Head on over to BettyTalk to discuss!