A study discovered that most children have established their money habits by age 7.¹
Before they might know what a 401(k) or mortgage even are, their financial future is already starting to take shape. It’s never too early to teach your kids the wisdom of budgeting, limiting their spending, and paying themselves first. So the sooner you can instill those lessons, the deeper they’ll sink in!
Fortunately, teaching your kids about saving is quite simple. Here are two common-sense strategies that can help you instill financial wisdom in your children from the moment they can tell a dollar from a dime!
Give your child an allowance The easiest way for your child to learn how money works is actually for them to have money. If it’s within your budget, set up a system for your child to earn an allowance. The more closely it relates to their work, the better. Set up a list of family chores that are mandatory, and then come up with some jobs and projects around the house that pay different amounts.
What does this have to do with saving? The simple fact is that spending money you receive as a gift can feel totally different than spending money that you earn. Teaching your children the connection between work and money instills a sense of the value of their time and that spending isn’t something to be taken lightly!
Teach your child how to budget Budgeting is one of the most essential life skills your child will ever learn. And there’s no better time for them to start learning the difference between saving and spending than now! The same study that revealed children solidify their spending habits at age 7 also suggested they can grasp basic financial concepts by age 3!
So when your kid earns that first 5 dollar bill for working in the yard, help them figure out what to do with it! Encourage them to set aside a portion of what they earn in a place where it will grow via compound interest. Explain that the longer their money compounds, the more potential it has to grow! If they’re natural spenders, help them determine how long it will take them to save up enough to buy the new toy or game they want and that it’s worth the wait.
Start saving for yourself Remember this–the most important lessons you teach your children are unconscious. Your kids are smart. They watch everything you do. Relentlessly enforce spending limits on your kids but splurge on a vacation or new car? They’ll notice. That’s why one of the most critical means of teaching your kids how to save is to establish a savings strategy yourself. When you make and review your monthly budget, invite the kids to join! When they ask why you haven’t gone on vacation abroad for a while, calmly inform them that it’s not in the family budget right now. Model wise financial decision making, and your children will be far more receptive to learning how money works for themselves!
The time to start teaching your kids how to save is today. Whether they’re 2, 8, or 18, offer them opportunities to work so they can earn some money and give them the knowledge and resources they need to use it wisely. And the sooner your kids discover concepts like the power of compound interest and the time value of money, the more potential they have to transform what they earn into a foundation for future wealth.
At the start of each calendar year, people make plans about how they are going to do things differently to change or improve their situation. Typically money moves are somewhere on the list. Unfortunately by mid-January we often see people giving up on those plans. But let’s face it, after everything we’ve faced in 2020 if you only change or improve one thing, YOU’RE WINNING!
Here are a few money moves you can make for 2021. But more than that we’re giving clear action steps that you can incorporate that should help you stick to the changes past January.
#1 Cut your expenses and debt, if possible
I know you’ve heard this one countless times before, and probably rolled your eyes. (🙄 here we go again!) You think you really need cable or satellite with 300+ channels to catch that one show on that premium channel or to keep the kids entertained. You NEED Netflix, Disney+, Hulu, ESPN, Amazon Prime, HBO Max, AND Apple TV. (Yes, we realize their ads are probably popping up on the page since we mentioned them.) That new gaming console and subscription service is ESSENTIAL for your kids, so that they stop bothering you before you end them after how many months of trying to shelter in place as much as possible. So we’re not going to mention any of those changes. But here are some ways to cut your expenses that you may not have thought about.
· Shop for less expensive insurance
If you have a car, apartment, or house, you have insurance on those items (unless you like riding dirty and living dangerously). But why spend more for a truly necessary item than you have to? So often we stick with the same company year after year while they slowly inch up our premiums while providing the same level of coverage and at times less service. Shop around prior to each renewal and see if your company still has the best premium. If not, switch. If they’re not valuing your business by keeping your cost low, why are you out here being loyal to a corporation?
Don’t know where to start? Just tell us below which insurance quotes you’d like and your residential (or commercial if you own a business) zip code and you’ll receive an invitation email to get multiple quotes within minutes.
· Refinance and/or payoff your debt
Are we recommending you go through a long credit approval process here? Not necessarily. Look at the interest rates on all of your current debt. If you have lower interest rate funding sources (a line of credit, credit card) that isn’t maxed out, it might be advantageous to move some of that debt over to the lower interest rate source. Especially while the Fed has held rates hovering just over 0% for most of 2020. (We’ll do a post later about what that means in detail; just know while you won’t get that rate necessarily you should be able to find lower interest rates because of it depending on your credit score.) Just be sure to watch out for transfer fees that may offset the money you’ll save in lower interest costs.
If you have the means to payoff some of your debt with money you have sitting in a low-interest rate savings account, go ahead and do it. You’re not going to make any more keeping that money in the account any time soon at 0.01%. Still not convinced? Play with these calculators to see how much your debt is costing you and how to get rid of it.
#2 Save money on food and cut food waste
So many people are struggling to afford food right now. The nightly news displays how the lines at food banks continue to grow in length. If you’re able to still buy the food you need first let’s take a moment to be grateful for that. 🙏 Now on to how to cut costs…
· Always. Make. A. List.
We know, we know. You’ve read and heard this one before too. So why aren’t you doing it? “I’m too busy.” Really? Too busy to save money? You’re going to end up spending one or the other (time vs. money) so why not spend a little time to save more money. “I write the list and forget it at home.” Ever heard of a phone? They have cameras and apps to make lists. “The kids always end up asking for things in the store.” Uh, here’s an idea. Teach them to make a list too! Good habits are taught and learned early just like bad ones, like shopping without a list and worse yet, hungry.
Stores are designed as mazes to make you wander around and notice as many products as possible. After all, you might just see something you “need” but didn’t plan on getting! (Darn kids 🧒) That’s why bringing a list with you is key. You’re far more likely to stay on track if you have a few written objectives. Making that list also helps you find all of the best sales, discounts and coupon codes. Speaking of coupons, here are some of our favorite apps:
Ibotta While it doesn’t include a list feature like another app on our list, it does offer a wide variety of coupons and our new fave for saving money and staying on budget, digital gift cards. Set your budget for groceries at lets say Walmart, buy the gift card in that amount through Ibotta for a percentage back immediately. Then, pick out all of the available coupons at Walmart for your shopping list and use the gift card to pay. In a few days (often a few minutes but we don’t want to overpromise), those coupon amounts will be credited to your account. Cash out whenever you reach a $20 balance.
Coupons.com So SavingStar went the way of the dodo bird and everyone had to migrate over to Coupons.com. We’re not mad at this as the offerings from SavingStar had gotten less desirable over the years. Also, Coupons.com was a site we had used in the past, albeit less frequently because it was associated in our minds with printing out coupons to take to the store. While you can still print coupons, there is an app now that we’re getting acquainted with. Follow our social media for updates on our experience with the app.
Checkout 51 This used to be the app to turn to for discounts on fresh produce, which at times can be challenging to find. While those offers have become fewer and farther between, this app has started expanding into other savings areas like gas and online shopping. It also has a built-in pharmacy savings card and a newer feature we’ll also be sharing on social media, surveys for money. 💲💲
KeyRing Ok while this one doesn’t offer any coupons or rebates, it is great for storing all of those customer loyalty cards. It’s also one of the only apps we’ve discovered so far that also allows you to create a shopping list for each specific store that’s not dependent on whatever rebates are available.
What apps do you use to save money on groceries? Share in the comments below. And while you’re grocery shopping, try to stick to the perimeter of the store. That’s where the more healthy, essential items you’ll need are often stocked!
Talking about healthy foods…
· Wait until evening to hit up your farmers market
ECV Talks is based in Florida, USA where finding farm grown foods is relatively easy. If you’re blessed to have farmers markets near you, make sure to shop local and support them. However, that doesn’t mean you can’t get a great deal. Local vendors usually don’t want to lug their unsold goods back home with them. That’s why they’ll often start discounting their produce as the day drags on. Hit them right at the end of the day to get the best deals. And don’t be afraid to ask them for items that aren’t visually perfect but are still usable.
But don’t over-purchase just because you’re getting this great deal without a plan to avoid tossing all those fresh fruits and veggies. Try canning, blanching and freezing to preserve your purchases and cut back on food waste. Or if you want to spend a little more, we highly advise investing in a Foodsaver or similar vacuum sealing appliance. Saving money on food is a long game. If you’re preparing your own meals instead of going out (which let’s face it alot of us are doing right now), you’re already well ahead of the curve. Trying out these tips can take your frugality game to the next level!
What money moves do you plan to make in 2021? Talk to us below!
It’s been two weeks (and a few days – sorry about that) so it’s time for our next money mistake to avoid. Last time we talked about not saving from as early as possible. Hopefully if you weren’t saving before you read the last post you are now.
Mistake #2: Locking away all your savings.
‘But Ms. ME didn’t you tell me last week to open a Roth IRA? Once the money is in there I can’t touch it until I’m retirement age.’
Yes, yes I did tell you that last week. But I did not tell you to put ALL of your savings in there. Let me be clear and restate this comment from the last post.
“Once you have a couple of hundred dollars in that savings account it’s a great idea to go ahead and open a Roth IRA at an early age.”
Notice I said “a couple of hundred dollars” and then I reference opening an IRA with only $100 of those dollars. The remaining funds should stay in your savings account. You never want to lock away ALL of your savings in any account that restricts you from accessing it. In the context of the last post, we were encouraging parents to start savings accounts & then IRAs for their children. From that point on split your saving for your children between the two accounts. If you desire to earn a higher interest rate, using some of the funds from the savings account to open a certificate of deposit can be a valuable option.
Once your children become independent, these initial savings accounts can serve as their emergency funds for when life happens. That way instead of calling mom & dad for help immediately, they can first turn to the help mom & dad have already given them by getting their savings started early.
For everyone who started saving since the last post, the basic advice is don’t put it all away in an inaccessible savings instrument just for the higher interest rate. The trade-off isn’t worth it if you end up having to resort to using credit in an emergency situation.