This Blog Is For Women

6.  Use someone else’s money to pay off your debt.

image: flickr.com/photos/wwworks

I’m not taking about your in-laws or a benevolent benefactor.

If you have an extra room in your house, find a room-mate.  If you’re buying a house look for one with a flat or apartment built in.  This is the fastest and easiest way to make your mortgage disappear.  Don’t use the money for other things, slam it on your mortgage and watch your mortgage term dwindle down.

Why use your own hard earned money to pay down your debt, if you can get someone else to pay it for you!  I had a friend just after college who had enough roommates to pay his mortgage and all his living expenses.  Yes there were 4 of them living in 1 house, but he didn’t have to work to pay his housing costs!  That’s right!!  All he needed was a part-time job for discretionary spending.

After you get to know me, you’ll appreciate that I like to state the obvious.

Obvious:  Saving money means saving money.

Explaination:  Let’s say you go to  the grocery store and you got specials on cereal  and peanut butter so you stocked up and got 3 of each, reducing the total cost by $9.  (Some stores even put a note at the bottom of your receipt ” you saved $9.06 today.”)

Did you save money?  Answer:  No – You spent less money.  You didn’t save money.  Not unless you transfer $9 to your savings account and actually save the money.

The rationale here is that your budget should include being able to purchase all of your needs at the regular price. If you get a deal that doesn’t mean you should be spending more on something else.    It means that you should be saving more.  So do it!  Save the difference.

Challenge:  Next time you get something for a reduced price and you save money, actually save the money.  Right, log in to your online banking account and make a transfer to your savings account.  I recently cancelled cable television reducing my costs by $46 a month.  So, now I’m saving $46 a month extra by transferring what used to be a cable bill into my savings account!

That’s a savings of almost $600 a year.  For real.

PS, I’m saving that extra $600 into my vacation account.  Cable TV was entertainment, and so is a nice south vacation!

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• Below Your Means (thisblogisforwomen.com)

If you start paying your children (let’s not call it an allowance, there must be a better word) you might be wondering what you’re paying for.

A young child is too young to really make the connection between completing jobs and getting paid, but you can try if you like.  It didn’t work for me.  The little ones always wanted to help me do something whether is was mop, wash widows, dust, set the table or cook.  So, it didn’t make sense to itemize the tasks.

As they get older, you might want to make a list of the jobs you expect them to have completed in order to get their pay.  I like these jobs to be the ones that help the communal good of the family.  Things like taking out trash, vacuuming floors, cleaning common bathrooms, washing dishes or emptying the dishwasher.

I don’t offer pay for things like doing your own laundry or keeping your room clean or keeping up with school work.  These things are expected.  And they come with reprimands of their own if they are not done properly.  Plus, I let the boys’ rooms get a little messy at times.  Most times, really.   They have to live in there, not me.  So a bit of stuff on the floor and things out-of-place is not really any big deal.  I can close the door if it bothers me and every now and then I get them to do a good purge and clean up.  The biggest reason their rooms are messy is because they have too much stuff in there…but I don’t want toys all over the house, so that’s the price we pay.

If there’s a big job to do like raking the leaves in Fall, or hours of shovelling after a storm, or if you’re working on a project that needs extra capable hands you can post the job with a set pay.  This is nice incentive for kids looking for a little extra cash for something they’ve been saving for.  The job isn’t mandatory though, they can forfeit the job and the pay.

So, it’s really up to you if you want to pay specifically for jobs or just generally pay the children so they can learn about money.  I don’t recommend giving them money for nothing though.  They should be contributing their share to the running of the household.

Other posts you might like:  3 piggy banks,  How Much Help?,  Kids and Money

Learning about money can start at a young age.

Young children can easily grasp the concept that money is needed to make purchases. (It’s amazing how many adults have forgotten this concept, with the advent of the credit card.)

In order for children to learn this lesson, it is important for them to have money.  At first, they’re going to need you to give it to them.

It’s a good idea to start paying your children as soon as they are old enough to ask for toys when you are out shopping.  This will serve 2 purposes:

1. It will teach them to budget.
2. It will teach them the value of saving, and not spending on impulse.
3. (O.K. I lied, it will serve 3 purposes not 2.) It will save you money in the end.

“Wait!” you ask.  How can paying your child save you money?  Simple.  You will no longer be responsible for purchasing gum from machines, ice cream at the corner store, or toys that are begged for while shopping at a department store.

You will simply allow your child to use their money to buy the things they want and can afford.  When they say they want something, you just have to say ” Did you bring your money?”

Suggested posts:  3 piggy banks, How Much Help?

Money is powerful.  When you’ve got enough of it, you almost don’t give it a second thought.  But, when you don’t have enough it can be like the Holy Grail.

Something that was instilled in me from a young age is the power of lifestyle.  Specifically, the power of money and living below your means.

The thing about living below your means is that it gives you a buffer for times when things are tight.  And it also gives you a means of saving for something special or important.

When I was 15 I got my first job.  Minimum wage was about $3/hr.

At 15, I didn’t really have any significant expenses.  I lived at home, ate my parents’ food, and they transported me to and from work.

Before I got my job, I was making an allowance of $5 a week.  That was enough to get by.  A movie ticket was around $4.  A new casette tape was about $8.

My mother knew the power of  money and she made me an offer.  One I couldn’t refuse.

She offered to continue to pay me my allowance each week on the condition that I put my paycheques in the bank (and they were actual cheques, the paper kind, that you had to take to the bank in order to deposit.)  The further condition was that I didn’t spend the money.  She would continue to pay me my $5 allowance each week until I reached a bank balance of $1000.  

If you do the math you can see that in order to earn $1000 at $3 an hour I was going to have to work about 300 hours.

I started working at the end of summer, and by January I had $1000 in the bank.

My 2 best friends also had jobs.  Both of them relished their new found spending power and had several new sweaters, cassette tapes and had seen all the latest movies in theatres.  They had abandoned the bagged lunch at school opting for cafeteria lunches.  And between them, they had about $100 in the bank.

This was a big lesson for me.  A lesson in the power of saving money.

I decided that I would continue to give myself a weekly allowance, and I even doubled it to $10.  But I continued to deposit my paycheques and to not spend money out of the bank.  By the time I turned 16, and got my drivers license, I had enough money in the bank to buy myself a used car.  And after that point I used some of my pocket money to buy gas.

At 17, I paid for all of my meals and shopping during a vacation to Florida – my best friend came with us, and that was part of the deal.  If I didn’t bring a friend my folks would foot the bill for everything, but if I wanted to bring a friend the two of us would each have to pay our own expenses.

When I graduated from grade 12 I had saved enough money to pay for my first year of university and my books.

I continued to work (2 jobs) through university and graduated with no student loans, a car that I owned, and money in the bank.  This money, I used as a down payment on a house.

You can imagine how sad it makes me to read about students graduating from university these days who have taken student loans to pay for all of their expenses during school: tuition, books, residence, food, entertainment, and transportation.  They are under a huge mountain of debt and many of them have no idea of the value of money.

This is not their fault.  Banks offer them the money.  It’s expected.

But there is another way.  It’s not easy.  I didn’t say it was.

This week I’ve got money on my mind.  I’ll be sure to post some of my ideas on how to help children learn about money and it’s power.