Friday, January 1, 2016

January Spending Freeze, Day One: What do my kids know about money?

HAPPY NEW YEAR!  I hope it's off to a great start!  We haven't spent on non-essentials since December 26th, but today is the official first day of our New Year's spending freeze and I'm excited!  I think the approach I'm going to take is to post about a project or issue we tackled each day, as well as a topic or project we did with the kids.  For the grown-ups, today we have...

Fridge treasures!

How many heartbreaking times have you looked in your fridge and found food that WAS perfectly good a few days ago, but ended up spoiling after you forgot about it?  This happens here far too often, and it really hurts my feelings.  However, we recently caught two almost-victims in the nick of time.  The first is a turkey carcass that we used to make broth.  We covered it with water, brought it to a boil, simmered it for about a day, and salted and seasoned to taste.  We will probably boil some noodles in some of the broth and have turkey noodle soup for a lunch.  The rest will be frozen and used in potato soup or any recipe calling for chicken stock.  The other treasure we found was leftover sausage dip made with Rotel and cream cheese.  This made the perfect snack for my husband while he watched our bowl game!  I'm planning to go through our kitchen again in a few minutes and look for other useful items that are running out of time.  I know I have a bunch of bananas I could use to make muffins or mini-loaves of banana bread!  My kids love it when I throw a few chocolate chips into the banana bread batter, and I already have everything I need to make it.  Putting these items to use helps keep grocery spending to an absolute minimum.  Taking homemade snacks when you go places can also help you avoid fast food purchases!  What forgotten treasures are hiding in your kitchen?  Is there still time to save them?

And now for the kids...

All four of my spending freeze buddies during a recent shopping trip.
We won't be doing this again for a while!

I feel like my parents set an example of good financial stewardship for me.  As a child, I watched them wait until they could afford the things they wanted, make smart purchases, and plan for my college education and their retirement.  I remember my dad sitting at the dining room table with his threadbare plaid checkbook, looking over his glasses as he wrote checks to pay the bills and balanced his checking account.  However, I was not privy to details.  Several years into our marriage, I realized that I actually love keeping track of our finances, and I worked out my own little system for doing it.  It works great, if I do say so myself.  Sadly, during those awkward years between getting married and figuring out how to do this, mistakes were made.  It was not always pretty.  I am hoping to help our kids learn how to make a budget and keep it early, so that by the time they have their own first checking account, they can avoid the dumb mistakes we made.  Maybe they can avoid the sweaty panic of an unexpected negative account balance!  They are only 8, 6, and 4 years old, so we are keeping it simple for now so I don't bore them.  It's so simple I hesitate to even write about it, but here it is.

I told my kids we were having a voluntary spending freeze.  I explained that we did have money, but we wanted to use it to accomplish certain goals, and therefore we were choosing to save it.  I asked them to tell me a few things we might need to save money for.  Here is the list they gave me:

Vacations/travel ("Disney World!!!")
"Important property" (I think Ivey meant things like expensive tools)
Garage (adding on to our house)

Then they seemed to be drawing a blank.  Since we have discussed money with them before, of course, I was surprised they did not mention the most important things!  I added to their list:

Emergency fund
Kids' education/future
Vehicle replacement

Then I explained why it's important to save for each one.  We briefly discussed the debt that can result from NOT saving up for these things, and the consequences of that debt.  I explained the concept of interest--both paying interest on a debt you owe, and receiving interest on money you have saved/invested.  I'm sure Suzi will retain a lot more of this information than Ivey and Robert.  One of the benefits of me blogging it is that I'll be able to refer back and offer a refresher course in a year or two!

As we talked, I made a list of questions they had and things I wanted to discuss in more detail later.  So far, we will be going over the basics of a monthly budget, how and why to avoid a car loan, and the importance of an emergency fund.  I'm looking forward to diving into these topics and many more!  Of course, they will also see Jordan and me working on our little projects and participate when possible.  If you have any tips or ideas for helping kids learn about money, please share!