Every one of us has had "aha! moments." Epiphanies. Days when we reach a crossroads and realize that we have to make some changes. For the next two months, we're sharing moments like those in our Life Stage Lessons series: Real stories straight from the financial lives of our DailyFinance contributors about times when they realized they were due for a serious course correction. So read on, learn from our mistakes, and get inspired to improve your relationship with your money.
As a parent, you learn early on there are certain points when your children are developmentally ready to start something new. It's our job as parents to recognize those times (like when they no longer need a sippy cup) and help them advance. While we were at church recently, I enjoyed seeing such a new development from our 7-year-old daughter.
As she has grown, she has had the typical moments of asking us to spend money on her behalf -- if we would buy her things at the store, for example, or if we could go out for dinner. This moment differed. During the offertory, she asked if she had money that she could put in the collection plate.
That simple question stopped me in my tracks. She wasn't asking if we would do something for her. Rather, could she do something for someone else? It was the beginning of grasping that things will not always be simply be given to her -- and that there's a cost to things.
What We're Doing Now
I've always viewed it as important to teach kids about money. I feel strongly that it's important to prepare them to be financially literate as adults. We decided to implement of a financial structure for our daughter. The easy thing would be to give her an allowance. I received one as a child, but little was expected of me out of it. I got to the point of feeling like I deserved it. We want to avoid that. We want our children to know that you have to earn your money -- and that it's not simply given to you.
We have established things she is expected to do every day as a part of the family -- like making her bed and helping pick up toys. There is no compensation for these expectations. But she can earn money by clearing the table after meals, helping take out the trash and handling other tasks.
How She Handles Her Money
We could simply give her the money, but that would only be going halfway. We want to help her manage her money. We help her split her earnings into three categories -- save, share and spend.
The percentage for each category is flexible, but we're leaning heavily toward saving money for something she wants or simply for something down the road. The "share" percentage is allocated for her to give at church or some other charity, and the "spend" aspect is for her to spend on things she wants.
If you listen, your children will give you the cue they're ready to learn about money. If you make it fun and involve them, it gets them excited to learn about money.
John Schmoll is the founder of Frugal Rules, a finance blog that regularly discusses investing, budgeting and frugal living. He is a father, husband and veteran of the financial services industry who's passionate about helping people find freedom through frugality. He also writes about wise ways to manage your money at WiseDollar.org.
7 Valuable Things You Can Get for Free
The Sunday I Knew It Was Time to Teach My Kid About Money
The days of the dot.com bubble are long past, and with them, companies whose "business" model involved giving away free stuff in hopes of attracting "eyeballs" to their websites. (Remember when Priceline.com would allow you to buy groceries and gasoline for less-than-cost -- for no particular reason?) But the business practice of giving away sample products in hopes you'll try, then buy, still has some merit. Kiplinger's highlights two websites that compile lists of goodies you can get free:
HeyItsFree.net as of this writing features free samples of Nesquik chocolate milk, Arm & Hammer toothpaste and Dove shampoo among its front-page offers.
MrFreeStuff.com currently tells you how to pick up a free cookie at McAlister's Deli and a free photo magnet from Shutterfly.
Restaurants are another great place to pick up freebies -- although you may need to keep a close eye on your calendar. Surveying just a few of the offerings, Kiplinger's notes that on National Pancake Day (Feb. 28 next year), DineEquity's (DIN) International House of Pancakes serves up a stack of free pancakes. Only July 11, 7-Eleven hands out free Slurpees. And to help take the bite out of tax day, Cinnabon offers up two free Cinnabon Bites.
After scarfing down a Cinnabon (much less two), dessert is probably the last thing on your mind. But for incurable sweet-tooths, Kiplinger's points out that Dairy Queen has a loyalty club that entitles members to buy-one, get-one-free Blizzards. And one day a year, Ben & Jerry's gives away free cones of ice cream during Free Cone Day. (Kiplinger's notes that this "usually" happens in April.)
Pep Boys (PBY) will rotate your tires, inspect your brakes and track down what makes that annoying "check engine" light keep turning on -- all for free. Now, you may have to sign up for a Pep Boys' loyalty card to take advantage of this. Pep Boys also use the free services as a way to lure you into its stores, and these "free inspections" are a great way to encourage you to pay Pep Boys to repair these problems. Like the saying goes, there's no such thing as a free lunch. But jumping through a few hoops may not be too high a price to pay for "free."
Free health care, anyone? Kiplinger's points out that under the Affordable Care Act, "most health plans now must provide a variety of preventive-care benefits free." These include "screenings for high blood pressure, mammograms for women older than 40, and routine vaccinations for children, as well as a long list of other tests and services." Granted, taxpayers are paying for all of this -- so in a sense it's not actually "free." But if you're a taxpayer, you've already paid for it, so you might as well get what you've paid for.
There's hardly a parent in America these days who would argue that college doesn't cost too much. But sometimes it's free. Kiplinger's notes that Berea College, in Berea, Kentucky, provides all students a four-year tuition scholarship that amounts to nearly $100,000 in value. Berea's website promises this: "Every Berea student is awarded our Tuition Promise Scholarship." Admission to Berea is "highly competitive," of course. But if you get in, "the actual cost to students and their families is $0."