Category Archives: Family Finance

Garage Sale Gems

She got a lot of amazing stuff for under $60! Definitely hitting up garage sales in my area this season using these tips.

A few weeks ago I moved into my new place. I’m doing it slowly, which means it’s been low-stress, but I’ve also had a few moments of, “Crap, why do I not have anything in my house that I need?”

Some of those things are coming. But some of those thing I straight up need to purchase. Like tables. The only table I own is now home to the TV.

Well, that is until this past weekend. I was super lucky in that I moved into the neighborhood a few weeks before the neighborhood garage sale. I was determined to only buy the things we needed, and the kids could get one toy/bauble each. That didn’t exactly work out the way I planned, but we got some cool stuff and met our budget without going over.

Living Room Table

fushimi inari souvenir

I needed to set some lamps up, which is why tables were so important. This one is actually a sewing machine table that I found at the first house we went to for $10. I may get ambitious and bust out the sandpaper to stain it black like the rest of this furniture by the end of summer. But I might not. It would be cool to have them all match, but I’m trying to spend my limited free time doing things I actually enjoy, and inhaling stain fumes isn’t necessarily one of them.

School Desk

winne the pooh lamp

Another lamp situation! For this one I got an old school desk from the same lady for $5. Right now we’re not storing anything inside because little fingers. But it is working really well for giving that lamp a home–and some of the child’s display items. We actually got that truck thing (they know way more about it than I do) at the garage sale for $5. With a mint condition box and all.

Outdoor Tables

two for ten dollars

I picked two of these up for $5/each. I already have a chair out on the patio, but now I’ll have somewhere to set drinks or food when entertaining. Or my mouse pad when I’m working outside.

Crazy Glass Table

glass table swiveling arms

This one was $10, and is going in my room–which I don’t completely have figured out yet. I know I’m going to need a nightstand, and this one is just super cool. The two outer circles swivel, so they can curl up for a compact table or spread out at various angles to accommodate all your stuff.

Stuff like this globe I got for $2. That’s for both me and the kids. They like seeing where I travel, and I like encouraging them to learn more about the world outside our own borders.

Indulgent Vase

beautiful vase home decor

I was at this one house and they had a bunch of vases from India, where the couple was from. They were gorgeous. I got caught looking, and asked how much. Five dollars.

Too much for an indulgent purchase. As I was walking away, I got an offer for $3.

It’s beautiful, so I coughed up the money. He told me it’s supposed to be a Chinese scene. He may have even gotten more specific, but I unfortunately don’t remember.

All About that Cello

cello for five dollars

My one kiddo couldn’t stop playing with this child-sized cello every time we walked by it. The second time, I found out it was only $5. The third time, I decided to buy it. It came with a bag, looks to be in functional shape, and supposedly orchestra lessons are offered next year in school. Now I just need to find out how expensive a bow would be…

Budget Kept!

We literally came in right on budget–sixty dollars. Five hundred points to us!

This is a really great time of year to hit up neighborhood garage sales. You can find them online, or even just keep an eye out for signs as you’re driving around. To get the best stuff, you’ll want to wake up pretty early. Most start at seven or eight, but my sibling has turned up even earlier than that before to catch people as they’re setting up.

Before you go to the store for that one thing you truly need in your home, be sure to pick through you’re neighbor’s stuff first.

 

Children, Medicaid & Autism: State-by-State Guide

In honor of Autism Acceptance Month, Femme Frugality will be hosting a series of Monday articles that focus on the financial challenges and triumphs that people with autism face and achieve. When they are children, these things also tend to affect their family’s finances, as well.

Pinning for my nephew. They don't have Medicaid coverge in his state and it's really hard because of the services he needs with autism. Maybe another state could help them out better.

 

When you’re raising an autistic child, the largest expense you shoulder is healthcare. You learn that “healthcare” isn’t just doctor’s visits and the occasional dramatic visit to the ER. It’s therapy. Adaptive equipment. Communication devices. And more.

None of it’s cheap, and if you don’t have a good healthcare plan, a lot of it’s not going to be covered.

Even if you do have a good healthcare plan, some benefits will still not be covered. In many states, the most comprehensive way to get your child the services and equipment they need is through Medicaid, and many states allow disabled children access to Medicaid even if their parents’ income exceeds eligibility limits.

Want to find out how to shelter some of your savings from asset tests? Check out ABLE accounts.

Medicaid Coverage Saves Everyone Money

Medicaid coverage keeps kids out of institutions. Until the 1980’s, one of the only ways to get children with complex needs the services they required was through an institution. Whether a parent wanted to part with their child or not, they were often forced to.

This was also extremely expensive. Providing a child Medicaid benefits so they are able to live and thrive at home is far less costly than having them live in an intermediate care facility or nursing home.

Luckily, things have changed, but not all states are equal. Today we’ll be looking at Medicaid coverage options for children with autism across all fifty states–and Washington, D.C.

Before we get started, there’s some vocab I want to review.

State Plan

“State Plan” simply refers to the Medicaid coverage that anyone gets if they apply for benefits with their state. Eligibility is dependent on income limits–not disability or lack thereof.

ABA Therapy

ABA therapy, or Applied Behavioral Analysis therapy, is the most proven method for successful early intervention for children with autism. There’s just one problem: it’s insanely expensive.

Until recently, most insurers denied the evidence in favor of this therapy. Some still do because of its cost. But most states have enacted laws recognizing, and forcing insurers to recognize, it as an evidence-based therapy.

That doesn’t mean all states provide coverage. There was a mandate issued by the Federal government in 2014 that arguably required its coverage under Medicaid, but some states have interpreted this mandate differently.

I want to take a minute here to acknowledge that not everyone is behind ABA–even within the autistic community. There are some autistic adults who are opposed to ABA therapy when it’s practiced with extreme rigor. However, there is also a general acknowledgement that there are ethical and non-ethical ways to practice ABA from the autistic perspective. You can get both sides of the argument here.

Level of Care

Required “level of care” indicates where a child would have been cared for prior to our culture’s shift towards keeping autistic children with their families. There are three levels commonly recognized in most states. In order from the least care needed to the most:

  • Intermediate Care Facility– Many parents may be surprised to learn that their child would have been institutionalized not so long ago. This level of care can, in some cases, be equivalent to the child who goes to outpatient therapy several times a week and has behavioral therapists in their home or community setting.
  • Nursing Home– This level of care would require skilled nursing/medical care on a regular basis. Today, you may have a nurse come into your child’s home and/or school to help provide these services.
  • Hospital– This level of care is required when you need more than a nurse. There may be monitoring of a condition or simply more advanced care needed on a regular basis.

In this guide, the lowest level of care required is listed. For example, if a state lists the required level of care as an intermediate facility, that will typically mean that those at a nursing home or hospital level of care are eligible, too.

Conversely, if the listed level of care is “nursing home,” those who are at an intermediate care facility level of care would not qualify for the listed program.

Waiver

A Medicaid waiver is simply a program that grants specific services to those who do not typically qualify for the State Plan. There are also waivers that provide services in addition to and including what’s available on the State Plan.

Wait List

You may notice that for most states, there is no reference to the wait list. This is done for two reasons.

  1. Medicaid programs are in flux at the moment. A wait list–or even a waiver–could change suddenly. It’s information we don’t have the capacity to update continuously.
  2. We want you to get in touch with the agencies that provide these waivers. Even if the wait list is too long for your child, state agencies may know of other programs or community organizations that could help in your unique situation.

Download Your Free Copy of Children, Medicaid & Autism: State-by-State Guide

In an attempt to make this guide thorough for all 50 states plus D.C., it is much longer than typical Femme Frugality content–11,000+ words. As such, we’ve turned it into a PDF for your browsing convenience. You’ll be able to find your state in our table of contents and easily jump to the appropriate page to get the information you need.

>>Click here to get your free copy of the PDF<<

 

 

This information in the above PDF is accurate to the best of our research as of April 22, 2018. It will be reviewed and updated annually. Intensive research was performed for each state program. The majority of states had a governmental agency or independent advocacy group provide information regarding their programs.

Start Saving for Your Child’s College Education Today

Today’s author–Dr. S–is a dad, husband, and finance professor. He discusses personal finance and financial independence on his site, Bull in Captivity.

 Wow, this is a must-read. Really shows the importance of starting to save for your child's college education early--like right now early.

Making sure that our children start their lives off without financial stress is a goal I can get behind. Turning 18 and jumping into reality is tough enough already. Adding the burden of student loans and financial hardship is not a comforting send off.

Unfortunately, college tuition is on the rise, and many students face the reality of not being able to afford higher education without supplementing their part-time income with student loans.

College Board estimates a 2017 annual college budget of $25,000 for state colleges and $50,000 for private schools. Parents seeking to reduce their child’s reliance on debt for college can start saving for their child’s education. But saying, “Start early,” isn’t good enough. It’s important to see the impact of early savings.

Importance of Starting Early

Because of the short time span of fewer than 20 years, college funds have a limited amount of time to take advantage of compound interest. This means that you should start investing as soon as possible. This timeline is equivalent to someone beginning to save for traditional retirement at 45. It’s not impossible, but the timeframe is considerably shorter.

Look at these three examples: Monica, Rachel, and Pheobe. Monica starts saving for her child’s college education as soon as the baby is born. Rachel waits until her child is eight before saving and Pheobe begins on her child’s 13th birthday.

Here are the results assuming that they all contribute $100 per month ($1,200 by the end of the year) and earn 8% on average per year.

compounding interest on college savings

As you can see, Monica has more money in the college account than both Rachel and Pheobe. The higher balance is not only due to the additional contributions Monica saved, but the interest on these investments.

Monica is earning compound interest, or interest on interest, the most powerful force, as described by Albert Einstein.

In its basic form, compound interest means that after year 1, Monica invested a total of $1,200. In year 2 though, in addition to contributing $1,200, she earns interest on year 1’s contributions. In year 3, in addition to another $1,200 in contributions, she earns interest on year 1’s contributions, year 2’s contributions, and (here’s the compound interest) the interest she earned in year 2 on year 1’s contributions.

I know it’s a mouthful, but the interest is acting as another contributor to the account. This is why starting early is so important. The sooner the savings begins, the more chances for compound interest.

Riskiness of Investments

In the previous examples, I assumed a return of 8%. This return is not unrealistic but is a return expected for stocks–which are risky.

As college nears, the account should not be invested in very risky investments. The worst thing that can happen is that the summer before your child starts college the stock market crashes and there simply is not enough time for the account to recover.

To mitigate this risk, the account will be invested in less risky assets as college approaches, for example, bonds. Here is an example of an asset allocation that becomes less risky as college drop-off day nears.

529 asset allocation

The average expected return for the portfolio is highest at the beginning of savings and drops as college gets closer. Higher risk, higher expected return. The lower risk only makes problems worse for Rachel and Pheobe in our example above. Not only do they have a shorter timeline to invest than Monica, but the returns they have available for compounding are less than Monica.

conservative 529 during childs senior year before college

Reusing the same table as before, but with the new expected returns, we see that the results are only amplified. Monica still does better than Rachel and Pheobe, but Pheobe’s account is not looking good.

Is it too late?

There are a few options available if you have not started saving as early as you would like for college education.

  1. Start now!
  2. Increase contributions. Instead of $100, you may have to invest $200 to get to the same goal as if you started saving when your child was born.
  3. Lengthen the timeline. Delaying college for a year or two through a gap year or community college are great ways to give you more time to save.
  4. Remember that every dollar helps. Just because you can’t pay for every dollar of your daughter or son’s college education does not mean you have failed. There are plenty of ways for students to pay for college including part-time jobs, grants, scholarships, and finally loans. Depending on the degree, a few loans are not the end of the world for your child. The loans would be even higher without your help.

College Savings Accounts

A 529 plan is the most popular college savings account. The withdrawals from this account must be used for school or a penalty is placed on the account, so if your child decides not to go to college, this could be a problem.

The IRS has a great Q&A resource on 529 plans.

Many states offer college plans with tax deductibility benefits. You will be able to save for college pre-tax, which helps you increase contributions. Many of the requirements and benefits for college savings plans are state-based so doing a brief search on your state’s options will give you a wealth of information.

Have a disabled child? Check out ABLE accounts.

Other options include a traditional brokerage account which is just an after-tax investment account. There are no tax benefits, but you can use the money for anything including buying your child’s first home or even starting a retirement fund for your child if college is not an option.

At the end of the day, any benefit you provide for your children going to college will be a big help. However, starting early means a bigger account from both your years of contributions and more importantly the help of compound interest.

How to Invest in ABLE Accounts

In honor of Autism Acceptance Month, Femme Frugality is running a series of Monday articles focusing on the triumphs and challenges autistic people conquer as related to their finances and careers.

Joining us this week is Tara Falcone, CFP®. Falcone is a CERTIFIED FINANCIAL PLANNER™, former Wall Street analyst, and founder of ReisUP LLC.

ReisUP is an early-stage financial services company dedicated to increasing investing education and access for everyday investors. Her mission is to empower people to “rise up” and play a more active role in achieving their financial goals. 

Totally sending this to my sister! How to invest in ABLE accounts.

Last week, we kicked off our Autism Acceptance Series by looking into a new financial vehicle: ABLE Accounts.

ABLE accounts allow disabled individuals–or their guardians–to stash away some money without having to worry about failing an asset test when they go to apply for state or federal benefits. These accounts can also be used to grow your savings tax free.

There are currently thirty-three states that offer ABLE accounts–plus DC. For simplicity’s sake, we’ll be looking at only Pennsylvania’s investment options today, though the same concepts can be applied in generality.

What are ABLE investment options?

The PA ABLE account has the following seven allocation options:

  • High-yield checking account
  • Conservative Investment Portfolio
  • Moderately Conservative Investment Portfolio
  • Moderate Investment Portfolio
  • Growth Investment Portfolio
  • Moderately Aggressive Investment Portfolio
  • Aggressive Investment Portfolio

“The Conservative and Moderately Conservative options invest 70-90% of their portfolios in cash and bonds, with the rest (10-30%) invested in a variety of stocks,” says Tara Falcone, CFP® of ReisUP LLC.

“The primary goal of these investment options is to preserve your principal, which is the money you deposit into your ABLE account, while offering limited to small returns on your investment. Small potential risk equates to small potential reward.

“The Moderate and Growth options’ portfolios are split roughly 50/50 between bonds and stocks. These investment strategies focus less on principal protection and more on generating a slightly higher return on the invested assets. Moderate potential risk means moderate potential reward.

“Finally, the Moderately Aggressive and Aggressive options are invested primarily in stocks (75-90%) with a small portion of the portfolios invested in bonds (10-25%). These options’ primary goal is to achieve the highest growth possible with little regard for principal preservation.”

Figure Out Why and How to Invest

Before making any investment, it’s important to identify why you’re investing, and what limitations your specific life situation may impose. Falcone advises looking at the following factors before choosing your allocation strategy.

Risk Tolerance

Investments are not stagnant. At times they’ll go up, and at others they’ll go down. Your risk tolerance is how much sleep you’ll lose over that fact.

“Generally, more conservative investment options are less volatile, meaning your account balance fluctuates less,” Falcone explains. “However, that also means it’s unlikely to grow as much since less risk yields less reward.”

“Meanwhile, aggressive options typically generate larger investment returns, but also subject your account balance to bigger positive and negative swings. This could put you at risk of not having sufficient funds to cover expenses when you need it.”

Time Horizon

How long can you let your money sit without touching it?

That’s your time horizon.

“If a beneficiary needs to access a large portion of his or her ABLE account every year to pay for qualified expenses, a conservative investment strategy is likely more appropriate,” explains Falcone. “If someone in this situation were invested more aggressively, they may discover that their account balance has decreased in a market downturn, leaving them unable to pay for current expenses.”

If, however, you’re saving to provide for your child after you’re gone, you may have a longer investing horizon.

“Someone with a longer investing horizon who doesn’t need to withdraw a large portion of their account for five or more years may want to consider a moderate or aggressive option,” says Falcone.

“The larger growth potential inherent in these investment strategies could allow that person to take greater advantage of the tax-free growth nature of ABLE accounts. In this case, the beneficiary should consider reallocating to a more conservative strategy as the time when they will need to withdraw money from their account approaches.”

Savings Ability

“In theory,” Falcone continues, “the more someone can deposit into their ABLE account every year relative to their expected expenses, the more aggressive they can afford to be from an investment perspective.”

Check out this example with Ella and Ari:

This is worth clicking through. An in-depth guide on how to invest in one of those new ABLE accounts for either you or your kid--whoever has a disability.

 

Overall Goal

There are two basic reasons ABLE accounts are so attractive. The reason you were drawn to it probably says a lot about your overall goal.

Reason #1: Savings isn’t counted for asset tests.

If you’re applying for government benefits like Medicaid or SNAP, savings in your ABLE account will almost never count against you. This is important when you’re trying to build up savings for medical equipment, therapies, or even just a basic emergency fund that you will need in the near future. In these cases, Falcone notes that a conservative approach is probably the best fit.

Reason #2: You’re taking advantage of the tax-free growth.

If you’re saving for your child’s future but don’t have a large enough nest egg to justify a special needs trust, ABLE accounts are particularly attractive due to their tax-free growth. Falcone notes that any time you’re making a longer-term investment, you can afford to be more aggressive.

It is possible that you’re taking advantage of both perks. You’re saving large sums of money for a date far off in the future, but are only able to do so because that savings won’t count against you in an asset test. In these cases, Falcone says you can yet again afford to be more aggressive.

Risk Capacity

While risk tolerance is how you feel about the volatility of your investments, risk capacity looks at the risk you can take on from a concrete, objective perspective.

“Due to the assets test that owners/beneficiaries of ABLE accounts must pass in order to qualify for Medicaid and other social programs, risk capacity is arguably the most important factor to consider in these unique circumstances,” notes Falcone.

“Asset tests often prevent families with disabilities from building substantial emergency funds that could cover expenses temporarily should the ABLE account balance drop in a market downturn. Therefore, even though someone may be comfortable with more investment risk, he or she may not be able to afford being exposed to such risk due to lack of other cash sources.”

If you have friends and family who want to contribute, but you also want to extend your investment time horizon, you may want to direct them to specific bills that they can pay rather than making contributions to the ABLE account.

Falcone points out that this keeps your money in your account as a long-term investment while keeping it out of your regular checking account where it would be counted in an asset test.

How should I invest with my ABLE account?

Wondering what you should do in your specific situation? Below you’ll find Falcone’s recommendations for some common circumstances individuals or families may find themselves in.

While this advice speaks to generic situations, it’s always advisable to talk with a professional about your own, unique set of circumstances before making any investment.

High-Yield Checking Account

  • Someone with no risk tolerance. They are not willing to put any of their funds at risk to earn even a small return.
  • Someone who needs the ability to withdraw funds immediately. Otherwise, withdrawal proceeds can take 3-10 days to reach the beneficiary in Pennsylvania, per the Program Disclosure Statement.
  • Someone who is already the beneficiary of a special needs trust or has some other fund/account/support to help pay for future expenses. They don’t need the benefit of the tax-free growth nature of an ABLE account, but want to shelter more funds from the asset test.
  • A disabled adult with current cash need, desire to shelter some assets from the asset test, and/or desire for some financial independence to purchase/pay for things on their own.

Conservative Investment Portfolio

  • Someone with very low risk tolerance.
  • Someone with no or insufficient emergency fund (i.e. low risk capacity.)
  • Someone with potentially large unexpected expenses.
  • Someone with a present need for cash (i.e. short investing horizon of less than 2 to 5 years.)
  • Someone whose primary goal is to shelter funds from the asset test, not earn a substantial return on those funds.

Moderately Conservative Investment Portfolio

This investor will display similar criteria to Conservative, but is willing to give up some principal protection for slightly more current income.

Moderate Investment Portfolio

  • Someone with moderate risk tolerance and moderate risk capacity.
  • Someone with high risk tolerance and low risk capacity. They’re comfortable with volatility, but can’t necessarily afford to lose money in the short-to-medium term.
  • Someone with low risk tolerance but high risk capacity. They’re not as comfortable with investment volatility, but can afford to take on some risk to earn a potential return.
  • Someone with infrequent but potentially large unexpected expenses.
  • Someone with a medium-length investing horizon of 5 to 20 years–perhaps a parent saving for their child’s future expenses, including education.
  • Someone who wants their money to earn a slightly higher return.
  • Someone who has access to other cash sources or temporary support in the event of a market downturn.

Growth Investment Portfolio

Will display similar criteria to Moderate, but is willing to take on slightly more risk for slightly more capital appreciation potential.

Moderately Aggressive Investment Portfolio

  • Someone with a high risk tolerance.
  • Someone with a high risk capacity (i.e. sufficient emergency funds or other cash/support sources.)
  • Someone with a long investing horizon and desire to benefit most from ABLE’s tax-advantaged growth. This could be parents who want to set aside funds for their child’s future needs and want those funds to earn a substantial return.
  • Someone who already has a special needs trust or is seeking an alternative to a special needs trust. One example is parents with a young disabled child or young adult.
  • Someone who has a low savings capacity now, but a large future capital or income need. One group that may fit this profile is parents wanting to establish a fund to pay for their child’s needs upon their death.

Aggressive Investment Portfolio

These investors will display similar criteria to Moderately Aggressive, but to a larger extent for each point. Even more comfortable with risk, even longer investing horizon, even greater future income or capital need, even more sources of additional support, etc.

Evaluate, but don’t mix and match.

Falcone advises against investing in multiple different portfolios at one time.

“Allocate 100% of your account balance and future contributions to whichever investment option you choose,” she says. “Mixing them changes the overall allocation and therefore the resulting investment strategy. For example, allocating half of your account to the Conservative option and half to the Aggressive option results in a combined portfolio similar to the Moderate investment option.”

She says the only exception would be if you needed some cash on hand in the high-yield checking account, but wanted to invest the surplus.

Falcone leaves us with these final words of wisdom:

“No matter which option you choose, make sure to re-evaluate your choice every year and make appropriate adjustments if your circumstances and/or goals have changed.”

Raise Money-Conscious Teens

Today’s post comes to you from the ladies of Women Who Money!

Amy is the co-founder of Women Who Money and the founder and blogger behind Life Zemplified. She enjoys writing about mindful spending and saving, retirement planning, and financial independence.

Vicki is the co-founder of Women Who Money and the founder and blogger behind Make Smarter Decisions. She enjoys writing about real estate investing, financial independence, career decisions, and travel. 

These are great tips to teach your teens about money from moms who have been there and done that.

There’s one saying that you hear all the time when you have kids. And before you know it, your saying it, too.

Kids grow up so fast!

As they grow, we teach our kids all kinds of things. But one of the most important jobs we have as parents is teaching our kids about money.

When they’re little, it’s not that hard to do. We teach them about saving, spending and giving. We buy them a piggy bank and show them the value of different coins. And they learn that you earn money by going to work each day.

Teaching teenagers about money is an entirely different thing! With all of the advertising kids see on TV and the social media marketing targeted at teens, it can be an uphill battle to help teens understand money and avoid taking on debt. And it’s certainly a challenge saying no to your kids so you don’t take on more debt too.

Even if you haven’t been the best money role model in the past, it’s not a reason to let your teen start off with bad money habits. The Women Who Money team has raised four teenagers, and we’re here to share a few stories that can help you raise money conscious teens. We hope these tips will help save mom and dad some money too!

Cell Phones

We were able to teach my son a lot about money when he saw how careless his first girlfriend was with her cell phone. In the first three months they dated, she lost one phone and cracked the screen on another. Yes, you read that right – two times in three months! Both times, her parents took her to the “big name” phone store to use their insurance to replace her phone.

Without talking about the choices her family was making, we simply told our son we wouldn’t be doing the same thing for him if that happened to his phone. We had him set up a “replacement phone” category in his bank account, and he automatically had a small amount of his money moved into that account each week. This taught him about self-insuring.

We gave him his first phone as a gift. It was as an older model (refurbished) iPhone, and we set him up on a low-cost cell service provider. He had to put a case on the phone before he turned it on and it had to stay on if we were going to help pay for the service. His plan had 2 GB of data, and he quickly learned how to monitor and reduce his usage.

Our son got his phone and had a plan in case something happened to it. It wasn’t the “latest and greatest” phone, but it met his needs. He also had enough data to do most of what he wanted to do when he was off WiFi. We saved money, and he definitely became more money-conscious on an expense that can cost hundreds of dollars a month!

Shopping for Clothes

One of my daughter’s favorite things to do was head to the mall on weekends! She’d find a ton of great “deals,” and before she knew it, she was out of money. Then when she wanted something for a special event at school, she wasn’t happy when she couldn’t buy something new.

Instead of just handing her money or letting her dip into her savings account, we took time to teach her different ways to shop. On her next trip to the mall, we told her to look at and try on all the different things she really wanted. But the rule was that she couldn’t buy anything. She could take pictures of the items, and we’d talk about it when she got home.

Homecoming was the next month and she wanted to buy a cute dress for the dance. We looked at all the dresses she tried on and the price of each one. We showed her where she could buy a discounted gift card online for the store where she found the dress. It was only a $5 savings but she combined it with an online ordering discount and saved more than $15 on a $50 dress. A 30% savings when she normally would have paid $50 in the store!

She learned that not giving in to impulse buying saved her a lot of money. We also noticed that she bought much less over the next year because by the time she got home from the mall and looked things up online, she decided that she really didn’t want the item! Other times she waited a few months to buy an item and she was able to get it on clearance. She still loves shopping but for the most part, her habits have changed and she spends much more wisely!

Cars and Their Ongoing Costs

It’s important for our children to understand the cost of some items continues beyond the purchase price. Take automobiles for example–insurance, registration, gasoline, and maintenance costs are all ongoing expenses most kids don’t think about.

When we gifted our daughter and son used cars on each of their 16th birthdays we outlined how the cost of these ongoing expenses would be handled. Initially, we would paid for the insurance, registration, and normal maintenance costs. We also covered gas costs for getting them back and forth to school. They were responsible for gas beyond the school commute and they were to take over additional vehicle expenses after their high school graduations.

Each of them worked after school and summer jobs and were responsible for budgeting their income to cover their initial gasoline costs and later their additional car expenses. This taught them to plan for upcoming insurance and auto registration bills. They also learned the importance of having a small emergency fund to cover potential unexpected repair costs.

While you may not purchase a car for each of your kids, you can still do this with a shared or family vehicle as well. Your kids can be responsible for any gas they use in the car, and they can also contribute a small percentage to additional vehicle expenses in proportion to their use of the vehicle.

If your kids will be saving up their own money to purchase a first vehicle, help them understand and budget for the additional expenses aside from the advertised price of the car. Sales tax and the items mentioned above add up quickly and you want them to be prepared.

Raising Money-Conscious Teens

When your kids want to spend their money on a video game, electronic gadget, new pair of sneakers, or some other item, advise them to make some price comparisons before pulling the trigger. This will not only teach them that prices vary considerably amongst some retailers, but it may also instill a bit of patience in them.

Because they won’t be running out to the nearest store on a whim or buying from the first store they enter at the mall, they’ll learn the art of the wait. Perhaps this may even get them to reconsider their purchase.

Not giving in to immediate gratification can give them time to evaluate their desire for the item. And whether the kids change their mind or not, this practice will help them save money. Usually, by finding the thing they want at the best price possible and occasionally by not spending any money at all.

Kids grow up so fast. Teach them about earning, saving, budgeting, spending, and giving. And use our examples and tips from above to help instill money conscious behaviors in them so they may become money-savvy adults.