Just Stuff

If you ever feel like you don’t own enough I recommend a very simple exercise that I recently did myself.  Pack all that you own into boxes (by yourself, getting others to help is cheating).  Then load everything that you own (including your furniture) in to a van.  Drive it somewhere else (preferably a couple hours away so that you have time to think about what is in you van).  Then unpack the whole lot.  Sounds like fun huh? 

Ok, yes, most of the planet will refer to this as moving.  Personally I call it appreciating all the stuff I own.  I am very thankful of my good fortune; on a planet where people still go without basic necessities I have all of those bases covered.  This process also brought to light all that I had and didn’t need.  Seriously, my last two boxes I didn’t unpack for over a month.  What was in them?  Nick-knacks. 

You read that right I have enough knick-knacks to fill two whole boxes, most of them were figurines that I had collected as a kid.  It took me so long to unpack them because I didn’t need any of them.  There were a few of the knick-knack that had special meaning, and some I made myself in the woodshop at school; but the vast majority were just things I’d accumulated. 

To be entirely honest, though they were on display during my university years I never actually looked at them.  The only time I really saw these things is when I went to dust, and having so much clutter makes dusting and lengthy and painful process. 

On one hand I wish that I didn’t have all of this stuff sitting around.  On the other hand most of my knick-knacks were gifts and I feel strange tossing them or giving them away.  So what to do about this whole situation? 

First I got rid of the ones that are worthless to me personally.  They were, for the most part, donated.  Second, I displayed what was left around my house so that they would, hopefully, be seen.  Finally I have placed a ban on knick-knacks.  No more are allowed to come into my house.  Lets face it, they’re mostly a waste of money.  You buy it, treasure it for a bit, and then it gets forgotten on a shelf somewhere until it breaks and gets thrown away.  If I want a souvenir from a place that I’ve visited it has to be something that will be used (which doesn’t mean it can’t be decorative).  For example I bought a beautiful table cloth in Germany a couple of summers ago and I get to sit and enjoy it with every meal.  Have you got stuff that is a waste of space and money?  

Feb Mid-Month Checkup

As normal I check how I'm doing overall on my budget at the mid-month point.  Though I do check it frequently throughout the month.  I have my finances organized in a spreadsheet which is conveniently located on the computer that goes every where with me.   And the answer is yes, I do look at my spread sheet before deciding if I can afford to do something like go out with friends for a bite to eat.  

Mortgage - Successfully doubled-up
Retirement/Emergency Savings - On Track
House Maintenance - Savings are up to $428.14. I'm going to keep spending conservative in this area for a bit.  The only thing I plan to buy for the house at the moment is insulation for my water heater, which shouldn't set me back too much.  
Housing Taxes/Insurance - Got to pay property taxes for the first time (very exciting.) Now need to get the second half scraped together by June.  Insurance is on Track
Big Ticket Items - $197.75 in savings, going to hold back on spending in this category for two reasons. 1)There are only a couple of expensive things that I want (but can wait for) and nothing that I need 2) I want a bit of a surplus in case something big like my computer dies.  
Travel - On Track
Health Insurance - Spent
Bus Pass - Spent
Cell Phone/Internet - Bills have not yet arrived
Car Savings - Going well (just look at the fancy new side bar!).  I've been without a car for a month now and have no regrets, actually I'm enjoying it quite a bit
Train - $52 still there.  Haven't been to see my parents this month and they're coming to me next week so this will probably role over to next month.  
Other Transportation - $38.70 left, that would give me plenty of cab rides if I want or need them.  
Utilities - Bill has not yet arrived, but last month's was $100 under budget so I should have plenty.  
Food - $58.60 left.  Only one week of groceries left to buy this month.  I'm also fairly well stocked for supplies.  Much better than last month.  
Miscellaneous - $8.83 left.  No worries there
Entertainment - $17.02 left.  I'm thinking dinner out with friends is on the horizon.  
Social/Sports - $35, most of which will disappear when I pay my dues next week.  
Clothes - $20, have plenty of clothes at the moment.  So this will accumulate until I need something like a new jacket or boots (11 years old and still absolutely amazing, but they will give out at some point).  
Gifts - $10 just need to let it accumulate in anticipation.  
Financial Planning - Not touched really need to make an appointment to see someone.  

So things are going well.  You may have caught on that I like to have some comfortable padding in all areas, just in case.  

Book - Money-Smart Kid$

I recently had the chance to read Money-Smart Kid$ by Gail Vaz-Oxlade.  (I'm a huge fan of hers by the way.)  It was quite an interesting read.  I have to say that she certainly knows how to bring finances to a kid's level.

The book is all about teaching parents how to teach their kids good money management.  She encourages parents to have their kids split their money into groups, spend, save, and give (to charity).  This introduces fundamental lessons early on.  As kids get older (and hopefully more responsible) she suggest giving them access to more financial resources, such as handing over control of their yearly clothing budget.  They'll either learn to spend it as they need it and save for the big items (like prom clothes) or spend part of the year wearing what was "cool" last season.

She even explains how to introduce concepts such as credit cards and borrowing before they are out in the real world with big and painful consequences.  I love the way that she suggests to open the bank of Mom and Dad for credit.  Let your kids spend when they are with you using their homemade "credit card" (obviously you pay the store with real money) and then the parents present the kids with their bill monthly.  True to real life if the total balance (which should be reasonably capped) isn't paid off each month interest starts to accumulate.  If they continue to fall behind on payments you have the option of foreclosing on what ever they decide to use as collateral (new MP3 player perhaps?) and of course if they ruin their credit history with you they eventually won't get any more loans from you.  Better they learn the painful lessons at home rather then out in the big bad world where they can cause permanent damage to their financial future.

The only bone of contention I have with her suggestions is the idea of an allowance.  I understand that kids need access to money so that they can learn to use it properly but I would worry that just handing over a certain sum every week would not teach them the value.  I earned money as a child by reading books and writing reports on them.  (See this post.)  I think that it was a fair way to earn money, I could earn as much or as little as I wanted, and I knew how hard it was to get.  For families not as book oriented as my own I'm to sure what to suggest.  Everyday chores (like making your bed or cleaning up the kitchen) should not, in my opinion, be paid for.  (You help get it dirty, you help clean it up.)  but being paid for jobs above and beyond normal chores is an option.

All in all I think this is a great read and would recommend it to any parent.  Though I would recommend your kids earn their money I think that you will find plenty of valuable advice in this book on how to introduce your kids to the reality of money.

Cheers to an Influential Teacher

I have been extremely lucky during my academic career.  I have had some of the best teachers on the face of the planet and many of them have made the subject that they teach a life long passion of mine.  There is one teacher, in particular, who stands out in my mind while I write this blog.  (For obvious reasons his name and school will not be disclosed.) 

My 11^th grade math teacher was one of the coolest guys I have ever met.  Funny and engaging, he never failed to put an interesting spin on what we learned, and he was always willing to talk to students about what interested us.  He was laid back enough that every one was comfortable with him, yet I never once saw him yield control of the class to unruly students. 

He is the teacher who introduced me (and the entire class) to a book called “The Wealthy Barber.”  A couple of the chapters were required reading, and he encouraged us to read the whole book.  I did and fell in love with the subject of personal finances. 

I’m not sure what the curriculum required him to teach us about finances (if anything at all), but I am sure that he took it a step further.  We calculated simple and compound interest and applied it to real life situations such as car loans and mortgages.  He taught us to use our graphing calculators to figure out the cost of saving for retirement (putting off saving for 10 years will cost me HOW much?) and how to calculate interest on a loan (what do you mean a mortgage is going to cost me $80,000 in interest?) 

The subjects that he chose to teach us, as well as the links that he made to everyday life, have had a huge impact on how I deal with my finances.  Because of his lessons, I have never carried consumer debt and my mortgage will be gone in a 6^th of the time my bank expects.  Since 16 years old, I have saved religiously for university, a house, and my retirement. 

Coming from one of the neatest teachers in the school, these lessons held so much more weight then they would have coming from my parents.  So thank you for your lessons, they have made my life all the easier.  

Kids and Earning Money (I need a moose!)

 Kids need money when they are young.  Yes I mean need money; I don’t consider it a childhood luxury.  Rather money at a young age is an essential tool for kids to learn its value and how to manage it.  This in turn allows them to put a value on the physical things that surround them.  As children, my siblings and I had a reading contract with my parents.  I detailed how this worked in “Best $50 I ever spent,” to say the least we worked hard for our cash. 

One of the things that my siblings and I spent most of our cash on was ice cream.  To spare us the gouging and highly inflated prices charged by the ice cream truck, my mother would buy boxes of popsicles from the store and charge us the per unit price (including tax) when we wanted our afternoon treat. 

One day when we were being babysat by a couple of teenage brothers, my mother gave them permission to give us ice cream without collecting the regular fee.  She neglected to inform us of this temporary change, so when the babysitters gave my little sister an ice cream, she refused saying “I don’t have a moose!”  The babysitters were bewildered as too why my sister wanted a moose before having an ice cream, but they continued to offer it too her.  She became more and more upset insisting that she didn’t have a moose and until she had a moose she wasn’t allowed to eat the ice cream.  The younger brother eventually clued in and realized that she was saying that she needed a quarter (which has the engraved picture of a moose) to pay for her ice cream.  With this understood, they were able to reassure her that Mom had told them that she didn’t have to pay today, (meanwhile my brother and I felt no qualms about taking advantage of what we thought was a lapse in our babysitters’ judgment.) 

That said, at a young age earning money, having it, and spending it on what we wanted taught us the value of money.  We knew that for the better tasting ice cream we had to work more for and if we spent all of our money then there would be nothing left for our afternoon treats.  (We probably drove the electrical bill up quite a bit hanging over the edge of the freezer debating the pros and cons of flavor and price.)  Just as important we also learned that we were not entitled to things we had yet to earn.  

Talking Money

One of the family stories that is often retold in my family occurred shortly after my younger sister (the youngest of three) started school and my mother went to work for a safety planning company.  One night my mother brought home some documents to read and was working her way through them when my sister went by.  Being a curious soul my sister asked “What are you doing mommy?”  Instead of my mother cutting the answer short with something simple such as “reading,” my mom took the time to explain about her job, that she was being paid to do this reading, and that she was paid by the hour.  At the end of the conversation my sister looked at my mother solemnly and said “well mommy, if you read slower then you’ll get paid more!” 

The point of this anecdote is not my sister’s mercenary mindset at such a tender age, but rather the family climate that we were exposed to as children.  Unlike many families, the subject of money was not taboo in our household.  I believe that neglecting to talk to children about money severely cripples our society.  Without open dialogue on the subject of finances how can children be expected to become financially sound adults?  There is a great example of this on Gail Vaz-Oxlade’s show “Princess” where an 18 year old with a maxed out credit card was not aware that she was paying interest on the balance.  She was under the impression that the nice people at the credit card company were giving her money that she could repay at her leisure. 

Contrary to the taboo, my parents were open to talking about finances.  We knew how much our parents earned, where the money for the house came from, and that it was important to invest in the future.  My Grandparents were also a part of this process, reinforcing the difference between needs and wants, and how you should never put something on a credit card that you haven’t already got the cash to pay for.  Talking with your children about money will allow them to think about the subject and ask questions.  Though the conclusions that children draw about money are ultimately their own, empowering them to think about money will help to prevent them from using it thoughtlessly.  

Kids and Money

I have decided to take the following week to talk about teaching money management to children.  A bit of a leap, you might think, for a person who doesn’t have kids.  So instead of telling you the best way to going about teaching your child I'll give you an idea of how I learned money management as a kid. 

Key to me learning about finances at a young age were three main factors: 

• Having money discussed and modelled in every day life. 
• Having to access to money and having to earn it. 
• Having money management taught to me by multiple sources.  

That said every child is unique and what will work to teach one child may not work for another.  As a parent/guardian you are uniquely positioned to meet your child’s needs.  With that said I will leave you with some notes on how a child thinks which has absolutely nothing to do with finances, I just think it’s kind of cool. 

Child’s Oath

I, a child, will be ever energetic and curious, as only a four-foot-peanut-butter-and-jelly fueled machine can be.  I vow to keep my eyes and ears open at all times, including and especially when adults tell me to close them.  I will learn by what others around me do and make no guarantee that I will change a behavior because an adult say so. 

I here by reserve the right to ignore anyone and everyone who tells me something is impossible.  Instead I chose to view the world with what you would consider to be irrational optimism.  I will embark on schemes even if you decide they are crazy, because we both know you’re just jealous you didn’t think of it first. 

Please do not mistake my innocence for ignorance or weakness for it is neither.  Do not make the mistake of thinking that my innocence is complete because I too am part of an imperfect world.  Though that imperfect world may include my perpetually unmade bed have no fear; I know how to fix the world and I am determined to remember how so I can fix it as an adult. 

I refuse to understand that different is bad because I know that’s not how the world works.  Most of the time I won’t notice that someone is different until you tell me at which point I’ll shrug because it doesn’t really matter.  Should I ever become so blind as to the fact that I can not see how I am identical to everyone else I give you permission to ground me indefinitely. 

Now, can I have a snack?