A BIG Goal Reached

Kyler has wanted a Nintendo DS since he entered our home three years ago. Unfortunately for him, I have never purchased one of these gaming units for my kids, nor will I. Undeterred, I have seen this "gift idea" show up on birthday and Christmas lists, all to no avail.

A year ago I suggested he start saving for one. I talked about moving from simply wanting something to doing something to get it. This did not appeal to him. Then he received a twenty dollar gift card to Target for his birthday. I suggested instead of running to Target to see what he could spend it on (his idea) he should start a "DS Envelope" in his budget plan. We got on-line to check out the cost of a DS, this seemed exciting and daunting to him at the same time.

A little reluctantly, he created an envelope and put the gift card in that envelope. Each month when he receives his budget he delegates income to his "Tithe", "Savings", "Spending" and "DS" envelopes. Saving for this item over the past nine months has been an exercise in staying power and delayed gratification. This was especially true when he told the neighbor boys what he was saving for and they each offered to sell him their old devices, which Kyler then wanted to purchase.....he just wanted the DS now.

Seven months into the savings plan, he had almost all the money he needed when he scratched one of my tables in the living room...on purpose...to be destructive. This type of destruction has been an ongoing problem, so I needed to figure out a new consequence. I told him since the table was a recent purchase, he would take his DS money and go to Target (he is so lucky I bought that little table there!) and buy me a new table without scratches. OUCH. That rather hurt. (which means it was an AWESOME consequence).

Added to the table set-back, Kyler also has a history of paying a lot of fines to me at the end of the month. Each time this happens I remind him he has control over these fines and if I were him, I'd rather see the money go in my envelopes instead of my mom's wallet. The last two months he has indeed been fine-free and has enjoyed the benefit of being able to keep his entire monthly budget.

Yesterday was the first of the month - budget day at our house - and he finally, after nine months, had enough money to purchase the Nintendo DS (+tax...oh the realities of purchases). It was kind of exciting driving to Target with all that cash in his hand and hopefully a sense of accomplishment in his heart. When we got home, he was very excited and had it open within seconds!

He has to have learned much through this process, I am hoping he picked up on these big ones:

• He has control over his "wants".
• He can achieve BIG goals over the long term.
• A little becomes a lot over a period of time.
• Waiting to get what he really wanted was worth it.
• Pride in himself for accomplishing this goal.

Its hard to say what he will pull out of this experience, he still doesn't share a lot of his feelings, but I do feel this was a priceless lesson, and I am so proud of him.

Click here to read about how we teach our kids to manage money.

There's the Money!

I told the kids in my group (see "Where's the Money?" below) to consider going home and asking for time to talk with their parents about what they learned this day. With their new awareness of how to set a budget, the time seems ripe for them to practice this new skill. I told them to ask their parents to consider giving them a monthly allowance; from this allowance they would set their own budgets for the month. Imagine your kids not asking you for money for every little thing. Imagine kids who enter college knowing how to budget, save and not go into debt. Imagine a next generation of leaders who understand living within their means.

Kyler's Budget System

For over ten years our kids have been receiving these funds. When they receive their budget amount they have to sit down and put each dollar into envelopes or categories. When they were very young, the categories were simply Tithe, Saving and Spending. The tithe was to go to the church. The spending was at their discretion - if we were checking out at the grocery store and they wanted a pack of gum, they could buy it with their money. The saving was long term, we told them once it entered the saving envelope it wasn't coming back out, it was to go to the bank for their future education and vehicle. Any additional income from babysitting or lawn mowing must go through the budget process.This system has given our kids freedom to spend and responsibility to save.

Today, Kyler still keeps envelopes, but the other kids have evolved to budget spreadsheets. Their categories have expanded beyond the three basics, they now include categories such as:

• Vacations - for their own discretionary spending while on family vacations.
• Presents - for friends.
• Football - we allot Zach an amount each year to spend on new gear, because his taste is of the very high end, the amount we provide doesn't meet his wants. He saves some of his money all year to supplement what we give him for football.
• Shoes - again, we allot an adequate amount for new shoes each year - if they want $100 shoes, then they have to make up the difference.
• Lunch - I budget an amount each month for school lunches, if they want more than that, they are responsible for that amount.
• Clothes - this also allows them room to spend beyond what I budget for them. Recently we were at the Chris Tomlin concert and Zach and Erin both wanted a t-shirt, neither asked if we would purchase them, they simply bought their own.

Erin's Budget Spreadsheet

A few years ago Zach decided we should have a PlayStation 3; we have a PlayStation 2 which worked fine. So he added a PS3 category to his budget plan and one day approached us to ask if he could purchase a PS3; the answer was yes. Erin purchased her own i-Pod last year, and after six months of saving, Kyler is $23 dollars away from purchasing a DS for $129.99 (plus the $9.00 in sales tax).
I am passionate about teaching our kids how to budget. I don't want them to live under the oppression of debt (as Kevin and I did early in our marriage). I want them to be wise with their money today, and more importantly ~ tomorrow.


Where's the Money?

Field trips are not my favorite thing (this confession brought to you by the 2010 National Young Mother of the Year...just another reality check here on that title), but I do love the 8th Grade Junior Achievement Finance Park field trip. I believe this is the most important field trip the kids in our district participate in at this age.

Upon arrival at Lincoln Finance Park, they receive an envelope which states their life situation for the day. They discover their age, if they are single or married, whether or not they have kids, occupation, annual income, and taxes to be paid. From that information they will set a budget based on minimum and maximum amounts for each budget category, and they will receive many, many options for purchases. Such as for the house and vehicle they will purchase, (along with corresponding insurance). They will budget for clothing, entertainment, a benefits package, groceries, home improvements, utilities and more.

It's incredible to watch these teenagers struggle to make decisions about which house to buy, how much to budget for eating out, why they cant buy the sports car - because of the need for car seats. In general just struggling with how much things cost. Its amazing to see them grasp what is must be like for their parents as they come and ask for money for clothes, movies, pizza, and more. The realization of where that money comes from was happening.

At the end of the day, with budgets stretched and cutbacks made, the Junior Achievement leader asked if there were things that parents have to budget for that were not on their budget sheets today. Their answers again showed the clarity they had gained....YES. Vacations, birthday and Christmas presents, gasoline to name a few. One kid said that when his parents say no to something, he now understands why.

When I asked some of the kids in my group if they received budgets or allowance, they all said no. When I asked them  how they get money to go to movies or to buy things, they said they just ask for money and their parents give it to them....check back here tomorrow to find out what I suggested to them!

While I was Away, You Spent $50 on What?

Before we left for New York, I asked the three older kids, who were being left home alone for the weekend (minus the youngest of the four) if they wanted me to prepare meals ahead of time, or if they wanted grocery money and they could figure it out. They opted for the grocery money.

Courtney (almost 18) and Zach (15 1/2) headed to the grocery store on Friday evening and with a cart and a calculator in hand and roamed the isles for weekend sustenance to share with their sister Erin.

Here is what they found:

S'mores PopTarts
Chocolate Donut Holes
Fruit by the Foot
Puffed Popcorn
Gatorade
Pepsi
Cheesecake
Reese's Pieces
Corn Dogs
Strawberries (alas something respectable)

There was some cash left, so they used the balance to go to lunch at Panera on Sunday after church.

What I love about this is ~ they made a plan, budgeted wisely (by that I mean they had a calculator) gained a new appreciation for my shopping expertise, time management (I heard it took them an hour to shop for the above items) and knowledge of the layout of the store. I love that they even valued saving some cash for a meal out together.

I appreciated that their goal was to purchase all the things they like but that I do not buy. Good job children of mine. I am indeed proud of you. I mean that sincerely.

P.S. There was no milk and no bread in the house when we arrived back home. There were however pop and donuts.