Spending Less Money

Barbara Warmsley, also known as the "Green Granny" is posting videos on youtube with ideas about how you can spend less money. I saw an interview with her where she discussed the fact that she grew up during WWII and learned how to be frugal. My grandparents who grew up during the Great Depression also learned to be less wasteful and to make better use of their items than my generation.

These videos have some good ideas that just might help you to stay within your budget. They might also trigger some of your own ideas about ways to save money.

Teaching Kids About Money

My children receive an allowance (which is a part of my budget) in an effort to teach them about money management. My daughter hoards her money and whenever she wants something, she's always got the money to be able to purchase it right then. My son, on the other hand, spends his money every time he's saved up enough for his current action figure obsession. So he always has to save before he can make a purchase.

Kids have different personalities, even kids that share the same gene pool and grow up in the same house. They view money differently so the lessons that have to emphasized vary, but there are still lessons for each child. Both of my kids are learning how to earn money. They're both also learning about value, when it's alright to spend, and when you should save. My son is (hopefully) learning about delayed gratification and that he can wait to get something he wants; a lesson my daughter seems to understand inherently.

What lessons are your children learning about money? How do you teach them? Do you believe in allowance? Let me know your thoughts in the comments.

Expectations

Contentment with your financial situation (as well as life in general) can come from managing your expectations. Instead of thinking of everything you can’t afford or how little you have; try thinking of how much you really do have. Imagine what life was like for people a few centuries ago, or look at some of the poorer countries today. The average American has more than royalty did a few centuries ago.

Even if you can’t afford a fancy TV or video game set, chances are you’ve got a computer and a TV. You have indoor plumbing and heat. Focusing on what we do have and what our money does buy for us helps us to understand that we don’t need to strain our budget to the breaking point to find happiness.

The Stress and Money Cycle

Are you feeling stressed right now? Many people are. There’s a laundry list of concerns right now that contribute to feelings of stress.
• The economy
• The unemployment rate
• Housing foreclosures
• Added responsibilities at work
• Fear of losing your job
• Difficulty finding a new job

All of these concerns and many more are making this a particularly trying time for lots of folks. One common response to these feelings is to do something nice for ourselves. This is a wonderful reaction; unless it spirals into a vicious cycle of spending unbudgeted money that leads to more debt which leads to more stress.

There is a good way to break or avoid that cycle altogether: include money in your budget to treat yourself. It might mean trimming elsewhere, but it can help you to manage your anxiety without adding additional burdens or concerns.

During these difficult times it’s important to discover and pursue what feeds your soul. For some people it’s a trip to the movies, for others it’s a relaxing massage, or some really lucky people feel renewed by taking a quiet walk outdoors (that one doesn’t even require budget maneuvers!) Just remember, it is so much more rejuvenating when you spend budgeted money on yourself guilt-free.

Squirrel Away Money When You Have the Chance

In a recent issue of Time magazine, there was an interesting article about your job being your most important asset. It had some different ideas and definitely gave me some food for thought. It also underscores that education, what I call good debt, is worth pursuing because it increases your future earning potential.

But what about all of the people who have lost their jobs, or are in danger of losing them soon? Their “asset” is no longer paying out. The best protection if this has happened, or might happen to you, is to have money in savings. I know a few people who work at jobs where they are assigned to particular long-term projects. Some of these folks know that there aren’t any new projects in the queue and that their employment will be done when their current project is done. One person is not really worried because he’s saved money for just such an occasion and knows he’ll be all right for about 1 year. Some of the other people I know are sweating it a bit more.

I realize that there are all kinds of expenses that make it difficult to save. However, it is easier to find money to set aside when you have a job than when you’re on employment. Make a category for savings in your budget and put as much as can in there each month. Check with your work to see if you can have two accounts for your direct deposit. If you can (and most workplaces who have direct deposit can), just put some money directly into your savings account. It can be easier if you never actually have the money to spend on other things. Do what you need to do so you’ll be a little bit safer if you lose your job.

Actions Speak Louder Than Words

When it comes to teaching kids anything, actions always speak louder than words. My dad used to tell my brother and me to “do as I say, not as I do.” You can probably picture the eye-rolls and disgruntled looks that we shared with each other. The way we as parents live our lives says a great deal more to our kids about our values than anything we actually say to them.

The same holds true with money. Talking about money has always been a bit taboo in our society. It’s just one of those things that you don’t discuss in polite company. But if we expect our children not to make the same mistakes that we’ve made and to be responsible with their money some day; we’ve got to show them through our actions how to do that.

We let our kids hear our discussions about how and when we choose to spend our money. We took a Disneyland vacation last summer, and we talked all winter and spring before then about how we were saving up money for the trip. We made the kids save up their allowance to buy their Disney souvenirs. We helped them to make choices about which souvenirs they wanted to spend their money on, since they could only spend as much as they’d brought with them.

My kids also watch us save up money when we want to buy something for ourselves. We make sure to talk about how excited we are that we’ll be able to buy that thing we want after we’ve saved enough money. We make them save up their allowance when they want to buy a new toy or movie.

I’m hopeful that getting to see and hear how we choose to spend our money will lead to them making responsible financial choices in the future. I know that there are no guarantees, but I can say to my daughter and son, “do as I do.”

Priorities, Choices, and Willpower

Money management can be boiled down to three words: priorities, choices, and willpower. How you choose to spend your money determines how well you manage it. Your choices are driven by your priorities, and willpower is required to stick with those choices sometimes.

My husband and I were trying to figure out how we could contribute more money to charity when we weren't getting raises this year and none of our expenses were decreasing. We decided that giving more money was a priority. So we chose to give up some of our weekly allowance or fun money to put more in the charity pot. I'm currently trying to save my allowance for eye surgery since I don't do well with glasses or contacts, so this means that it's going to take longer to save up. I am also a book junkie and frequently want to buy new books.

I'm confident that this new choice is the right one, so I'm willing to extend my eye surgery, and refrain from purchasing every book that I want to read. (I guess I'll be spending more time than usual at my local library!) By setting our priorities, making different choices and exerting willpower, we're able to keep our budget balanced and give more money to charity.

These are the same principles that can nearly always be applied to any budget in order to succesfully manage your money.