In an effort to keep toys from overrunning our home and at the same time teach the kids about personal finances we came up with a rule for toy acquisition. It goes like this:

When there is a new toy that they want, we find out the price.  Then we go through their current toy inventory and find toys they no longer play with and determine how many we’ll need to sell to earn enough money to buy the new toy.

My son had a remote-controlled firetruck that was just sitting in the garage. His new love affair is with Legos.  So we put his beloved fire truck up for sale on our local Facebook sale group so he could start earning money for Legos.  He felt proud when he saw that people would pay him for his toys and that he was saving up for what he really wanted.

It really helped him understand that the things he wants cost money and that we have to earn that money to get what we want.  It’s a small bit of knowledge but I hope it will build into something bigger and set him up for a financially solid future.

 

 

Once a month, I get a fresh piece of ledger paper (the old accounting paper—Google it for a quick download or make your own spreadsheet). I do all my budgeting transactions that way:

I plan out my month and give my money a task—like a job. I do my best at zero budgeting (giving every single dollar a job to do). It’s not easy but it keeps me from overspending. The cash I get at the bank on payday goes into actual envelopes, by categories. This keeps me disciplined.

Being able to physically put my money on paper is powerful. I’m still skeptical linking my about bank account to an app or online program. I’d rather do my online banking, automate any recurring transfers (like my savings) manually on Payday.

This takes less time than having to straighten out ID theft or errors.

Putting the recurring categories on the paper and photocopying for the year helps me.

 

When I was in college and at the start of my professional life, I worked as a teller at a bank. One very common theme from fielding hundreds of customers and calls was that the balance in their checkbook didn’t match what the bank said they had.

Very often, people would forget where they spent their money and then be upset when they were overdrawn and, subsequently, paying fees.

Fast forward 25 years and I have worked hard with my three girls to instill in them a sense of financial literacy. Whenever I ask them, “What’s mom’s first rule of finances?” they each holler out (as they were well-trained to do), “Keep your own banking records!”

I’ve taught them to balance their accounts and reconcile them with the bank, recording each transaction (how very old fashioned!) so they know where their money goes.