Saving Money

 When people talk about saving money, too often there’s a negative connotation to it. Like, “Eww, I have to save money now.” In fact, saving money is a smart and positive thing to do with your earnings. No matter how much you earn, even if you make millions, learning to budget and save money is important. Michael Jackson is a good example of this. He died with a great deal of debt and had numerous financial troubles due largely to poor spending habits. In his lifetime, he earned millions of dollars and still never gained money management skills. You can live very well on much less, if you become skilled at ways to save money.

 Saving money can be accomplished many ways. There’s of course, traditional ways to save money, by putting it in an interest earning savings account or a CD (certificate of deposit) or money market funds. At your age, it’s likely you have a savings account. Putting money in a savings account is a good practice for everyone, even if it’s a small amount. Other ways to save money are in wise spending.  What does that mean?

 Wise spending boils down to knowing how to make your dollars stretch. It’s what many adults now have to teach themselves due to the economy. You’ll give yourself a head start in life by learning it now, as a young adult.  If you can look at it like a game you’re playing, trying to make the most out of what you earn, you’ll find this fun. It’s a great boost to your budget when you can make the same purchase as someone else and still have cash left over. When you have a career or family, practicing these strategies can make a huge difference in your quality of life.

Ways to spend wisely for teens

Spend only what you’ve budgeted. First start with a budget. If you earn $200.00 a week at a part-time job, it should not mean you’ve got to spend it all. Sit down with parents or a bank officer and draw up a budget that takes into account savings for college or your future, immediate expenses like gas money and extras and short term goals. Then spend only what your budget allows. It might mean you don’t spend anything some weeks, to save money for larger purchases. Our culture has done a poor job modeling this until recently. Many adults bought and spent as long as they had money or credit, even overspending and extending credit to buy. When the recession happened, their financial world crumbled. Start off smarter in life, by making a budget and spending only what you can afford. It’s likely, in your adult lifetime, you will have financial issues or endure another recession. Wise budgeting skills will carry you through.

Watch sales. Everyone wants “stuff”. The trick is buying your stuff when it’s on sale or when it’s cheaply had with coupons or rebates. There are many ways to find these deals. Search online for “coupons,” “rebates,” “clearance,” or “sale” for an item or a retailer. Make it a point to try to never buy unless you’ve got a deal. Some coupons are only for online purchases, others have to be printed out, a few are rebate codes you have to plug into the purchase screen. Don’t ever pay for a coupon code, though. These are usually fraudulent. And watch shipping costs. Even if there is a sale, high shipping might negate your savings. Consider going in on an order with a friend or a family member to gain free shipping. Some companies, (like Victoria Secret or GAP) offer free shipping over a certain amount.

Get a CVS card and use it for points earned and cash back coupons for necessities like makeup or personal care items. If you are 18 or over, you’ll qualify. Buying the same $7.99 mascara at a “Buy one, Get one free” sale, with a cash back credit of $3.00 means you’ve just saved $11.00. You’ll find these cash back coupons, or ExtraCare bucks, on your register receipts or printed out with them separately.

Cash Back Credit Cards. IF your parents approve, consider getting a credit card with cash back rewards. Remember, it’s not the credit card that gets us in trouble, its unwise use of credit. If you learn in your teen years to use credit to your advantage, you will gain money, not lose it. Many cards have reward points you can use for purchases or that take money off purchases. If you are going to buy at GAP or American Eagle anyway, using a card that gives you rewards points at those retailers along with a sale is like getting merchandise at super savings. It will make your dollars stretch. PROVIDED you pay it off each month in full. If you’ve budgeted $120.00 a month for clothing, spend only that. One to consider is Discover’s Student Card. Talk to your parents about this, and spend time reviewing options. Your parents might also consider testing your financial awareness by letting you use one of their cards with clear understanding of spending limits. Along these lines, don’t get department store cards, their interest is higher and rewards are usually better from major credit cards.

Involve friends. My daughter, age 17, is a savvy shopper already. She’s grown up in a house where saving money meant the difference between having an item or not.  Her friends split deals, shop sales, and compare prices. They enjoy it. You’ll like saving money more if your friends are involved. You might have to win them over by showing them how much you can purchase by being thrifty, but it will catch on eventually.

More teen tips for super wise budgeting tomorrow, as this series concludes.

I am opening a checking account with one of my kids tomorrow. It’s an historic event. Soon small boxes of checks will arrive, in anticipation of careful spending.  My daughter has had a savings account but never a Visa card, nor a checking account.  She is walking toward adulthood, armed with fiscal consciousness. As a parent, I don’t take any of these milestones as small. 

It seems like only yesterday she was a tiny baby looking adoringly at mom as the answer to all her needs. Then she morphed into a Middle School alien who glared at me under a fringe of bangs as the source of the entire world’s frustrations. (At least I thought she was glaring. In those years it was difficult to see her eyes due to the fringe).  My daughter has grown into a young woman, leaving both dependence and the hostile fringe behind.

As parents we want so much for our children.  We hope for them to be intelligent, talented, of good character, etc. And we invest effort teaching, educating and praying the adolescent glaring ceases and they evolve into responsible adults. One area not to forget imparting is fiscal awareness.

Here are some ways to implement financial readiness in our teens:

As young as possible, open a savings account for them. Have them learn the process of savings early.  Some may argue with me on this, but don’t let kids keep all their birthday/holiday money for splurges. Even if it’s five percent of the till, they should deposit something in savings. If you start young, kids are less likely to buck the system.

When they get a job, negotiate with teens a fair amount to keep for spending and have them deposit the rest in their savings account.  

Agree in advance on what the savings account is to be used for. I personally do not agree that kids should only save or only spend all they earn. We adults have fun and we buy gifts for others.  College savings can seem far off to kids if they don’t get to take some earnings out now and then. Budget with kids either monthly or seasonally what is fair to withdraw and why.  

One of my friend’s kids withdrew all of her savings to buy a boyfriend an X-Box and games. If you fear the same, open an account that requires both of your signatures to withdraw money. I have never had to do this my kids, but it’s a factor to consider.

Open a checking account and obtain a debit Visa or Mastercard and possibly a credit card before they leave home. A checking account is tantalizing for us all. It’s tempting to over spend. Thus, I attempt this stunt with my kids pre-leaving the nest in order to employ corrective measures.

Things to educate the kids about checking accounts:

• Teach them to shop banks (fees, interest rates, minimum balance, ATM charges)
• Balancing checking accounts
• Disputing fees/Identity theft
• Maintaining records of transactions and statements
• Secure disposal of receipts and documents
• Online banking and setting up an online account

While some of those items may seem common sense, having a few kids in dire predicaments has taught me to leave no stone unturned.  One of my offspring, upon entering college, switched banks only to be dinged heavily by charges for ordering checks, not maintaining a minimum balance, and excessive use of ATM card.  I received an “SOS” text from him one night when he’d involuntarily overdrawn himself.

The bank I had set him up with before he left home had low fees, no check printing charges and a minimum balance of only five bucks. He didn’t ask the right questions of his new bank and paid heavily. I take some responsibility for that, as I didn’t educate the boy on banking as I should have.  He is not a detail conscious personality, and did not ask any questions. The paperwork the bank gave him came up mysteriously missing, lost before he could read it.  (I suspect these documents ended up in the bowels of his dorm room, which is a NASA recognized Black Hole.)

Therefore, take a few minutes and teach your kids banking. Start young, be flexible with savings, but consistent, and give your kids the gift of responsibility that carries into adulthood.

A wise woman recently said to me, “We are not raising children. We are raising adults.” Words to live by when it comes to smart financial parenting.

You’ve shelled out a small fortune via applications and testing and mandatory fees. Now it seems that there should be some sort of break for parents. (Like a free spa day where muscular, non-verbal men bring us mineral water and massage our weary carcasses). Alas, after you’ve gotten the kid accepted, it becomes time to dish out yet more money outfitting the dorm.  With three kids already experiencing higher education, I want a punch card that prohibits me from this process for the rest of my life.  

Here’s a rundown on what you need to consider:

Your kiddo will probably need a mini refrigerator, microwave, dishes, flatware, cups, television, blankets, pillows, towels, a fan, computer, (most schools are encouraging laptops these days) and a printer.  Don’t forget paper for printer, power strips, extra ink cartridges, etc.

Purchase personal items like soap, shampoo & conditioner, toothpaste, medicine, dish soap, towels, shaving items, Kleenex.  Send food that can be prepared in the dorm such as; soups, instant foods, granola bars, trail mix, oatmeal, cereal & canned ravioli are great items for late/night early morning munchies.

Dorm rooms often are often equipped with extra long beds. It pains the tightwad in me to have to buy sheets, when I have a linen closet that rivals Martha Stewart’s. Most dorm rooms are NOT carpeted. It is suggested to purchase an area rug to avoid the hospital ward look. 

So looking at this list, comes the vital question, “How can I save money?”

Here’s what I recommend:

1. Get to know the child’s roommate ASAP. Most colleges provide this information. Contact the student’s parents and see what they are providing.  Typically, the other parent is relieved to split expense. One of my kiddos had a roommate whose parents sent a fridge. We in turn, provided a microwave.
2. Armed with this knowledge, start looking on Craig’s List or in garage sales NOW for the future. Even if your kiddo is a senior in high school this year, it’s time to stockpile dorm stuff.  Our family saves about half doing so in advance.
3. See if there is a school posting from graduating students who want to unload a ton of their stuff cheap. Call the school for recommendations.
4. Go online for bedding. The best time to buy bedding is in the spring. Prices go up in the late summer/early fall, but watch for sales.
5. To save computer expense, find a good rebuilt one from a reputable dealer. It is possible to find a new one for cheap on sale- just be sure it’s equipped with software and has lots of memory.
6. Pick up food in pieces, rather than in one giant shopping trip pre-college. It’s easier on the budget to add a few items a week. I buy, starting early summer, non-perishables every grocery visit till the week of college.
7. Garage sales and discount stores such as Dollar General have great finds on dishes, flatware and drinking cups.
8. You will want to pick up medicine the same as groceries, weekly. My suggestions for a “first aid” kit are pain relievers, band aids, Tums, hand sanitizer, cough medicine, decongestant, cough drops, anti-biotic cream.  Do NOT forget a thermometer!  The worst calls I get are from my college kids, “I’m sick.” “I think I have high fever.”  Ugh! A temp of a 104.9 might mean my advice is, “Do not pass Go. Proceed immediately to the ER.” Versus a temp of 99 that may allow waiting till the free clinic is open.
9. Go to an outlet for carpet scraps.  

 It takes time to forage for these discounts and sales. But when I am prepared, it saves a bundle.  I’m in the habit now of continuous college prep for my kids. I’m not sure what I will do when I don’t need mass quantities of canned raviolis stacked up, awaiting a child’s college experience.  Perhaps then I can actually take that spa day, huh?  Send me your ideas on saving and surviving College Prep 101.

August looms a mere eight weeks away, bringing with it the giant sucking sound of your cash being drained away as your child leaves for college. Maybe you have a high school student with college aspirations and want to start saving. How much do you budget? A touch of preparation saves a ton of dough and much Zanax, folks- trust this mother of five.  What are these costs?

Almost all parents with college bound kiddos can quote tuition fees, (around 15K annual room and board & tuition for state schools). I, too, knew these statistics, but breathed a heavy sigh of relief when there were ample grants, scholarships, and student loans to get my child’s foot in the door of the University of her choice. Whew! That fiscal hurdle was crossed.  I thought. I mean, the tuition covers room and board, how much more could they need, right?

That was about six years ago. I am far smarter these days, having three children with college experiences.

For starters, let’s talk getting them there. Pre-college there are SAT’s, which many students take two or more times and keep their best score.  You can plan on spending about $30-$50.00 each for these.

Application Fees: Applying for colleges takes in many cases, non-refundable application costs, which can range from $25-$200.00 or more, depending on the school.  Most kids apply for four or more schools.

 Then the “Letter of Acceptance “comes. This is the day you celebrate with joy, (and you should, because it is quickly followed by several other letters asking for fees, one upon the other). 

Yet More Fees: There will most likely be a student fee and a housing fee. Countless letters will ask for cash in a myriad of ways, some required, some merely sales pitches. There will be an orientation, which is typically mandatory for freshmen and usually comes with a price.  And F.Y.I, even if your son or daughter are on a full grant or scholarship, these upfront fees may not apply to the “free ride” and most often are still out of pocket.

Crazy Mandatory Fees: This week, I took child number three to Ball State University for her mandatory orientation. After coughing up something like $225.00 already to BSU for above costs, I become very crabby over additional fees. I know that an education is worth every penny, I just hate parting with yet more of my money.  It’s primeval in me, I know. I become ugly.

At this recent event, the required cost of eating there was around fifty bucks for a day and a half (two lunches, one dinner, and a breakfast). Granted it was for my daughter and I, but still this is for a family of people who eat a yogurt and a granola bar for breakfast and consume ramen noodles as a staple food group. We’re cheap.

Me: What if I don’t eat that much? Do I get a rebate?

Orientation Leader:  You will find that money will go quickly, given the cost of our food.

Me: If it’s expensive, I would be happy to look at ways to reduce your budget, I do that for a living.

Orientation Leader:  Umm.

Me: Hey, I am on a restricted diet.

Orientation Leader: We have a variety of ways to suit your diet. What are your restrictions?

Me: My daughter and I only eat things that cost a dollar, it’s genetic.

Orientation Leader: That will be $50.00. We take cash, check or credit card.

If you stay with your kiddo at these orientation gatherings, you will most likely be charged a fee to sleep in an un-air conditioned dorm, where you will make your own bed and sleep on a rubber mattress coated with the DNA of countless college students.  This is not to mention the cost of road trips to drive there.  (Nor the parking costs often charged to park while paying for the orientation experience).

Then there are lab fees, student parking passes, etc.  Health exams, vaccinations, sports fees. You are also “encouraged” to visit the bookstore, where fifty dollar sweat shirts beg to be purchased.

What I suggest to counter these unexpected fiscal gems is to be aware in advance and to start saving if you have a high school student. I anticipate spending from high school senior year to college entry around $500.00, for SAT’s, applying to colleges and required entry fees.

Then I plan on another $200.00-$300.00 for added costs, such as orientations, fuel to get there, student ID’s, parking passes for students, and up front lab fees.

Also, a rule of thumb regarding books and financial aid- typically financial aid is not released to the school until a few weeks after the semester starts, so plan on having cash to buy books each semester. This is around $300.00- $500.00. I have never lucked out paying less, given a combined eight years of college for my kids thus far.

If you know there are a couple of colleges your kiddo is aiming toward, try contacting the schools and ask for these costs. Or search websites for info.  Bottom line:my budget just to get the critters off to college- $1,300.00 (without dorm expense).  You may adjust yours as needed.

Got a college student? I would love to have your input on budgeting!

Next blog stop on the money train, “Dorm-land”.

They weren’t in the car yet, but I girded my loins to prepare for battle. Brightly colored papers clutched in my youngest daughter’s hands bore evidence of impending drama.  Extracting one she proclaimed, “Mom!” “There’s a gymnastic camp right here in town!” “It’s only $200.00!”  

From middle daughter, aka, the “Cool Teen”, a more stealthy approach: “Hey Ma, can I hang out with my friends this Friday?”  It took some pushing on “Cool Teen” to discover “hanging out” was at an amusement park, (estimated cost, $70.00 for admission plus food).

A third country in the Allegiance of “Spend Mother’s Money Faster Then She Earns It” was heard from later that day.  “Like, there’s like, a Warp Concert Tour, like, next weekend!”  (Tickets for this hard core, head banging, extravaganza were, “like,” $50.00)

It was 4:10 p.m.  If I calculated correctly, my children had designs on $320.00 of my money that day alone.  Calgon take me away!

 I happen to love summer vacation. It’s an opportunity to spend time with my kids, not live by a schedule and be carefree. But there’s one seasonal area, I have come to dread- the fiscal drain.

Why do parents feel compelled to shell out so much money for kids?

 Because we don’t have backbone, that’s why!

 Think back to your childhood, do you remember being bored if you weren’t entertained?

 Boredom? What the heck was that?

How do we escape with sanity and our budget intact?  Often it’s not the big purchases, like a pricey camp, that do us in- it’s the nickel and diming of summer time-ice cream, movies, arts and crafts, etc.

My advice is two-fold:

First- budget! Second- be fair, but strong.

Here’s what I do:

If my income allows, I permit each child to pick one “big” ticket item such as a camp experience, for the whole summer.  This means I don’t have to work continuously to provide constant “fun”. And it teaches them about choices.  As adults, what gets us in trouble fiscally is feeling like we deserve it all. Why not teach kids that financial planning means choices?

 I also budget an extra $21.00 per week for small extras, split between all three girls.

Yeah, this sounds like I am being a tight wad. $7 a kid a week?

What will seven bucks buy?

A regular movie ticket (or a matinee plus small popcorn)

One round of miniature golf

Roller skating (skate rental plus admission)

“The Works” fast food combo meal at most chains

Bowling (two games plus shoe rental)

It’s what I can afford without breaking the bank.  If the kids do not use this amount, it carries into the next week and so on.  Hence, they need to (gasp) work for extra, save, or find “free things” to do.  I still have to remind them of this every summer. They grumble, but fall in place eventually.  

I do not “give it” to them as an allowance, as we also may elect to use this money for family purchases such as zoo or water park visits.

This helps me stay in budget and also gives them a medley of things to do, without feeling deprived.

 Parents, embrace your inner tightwad!

Don’t give your budget a summer vacation. Use this time to teach kids about money management.

Got a summer budget strategy to share with the class? I’d love to hear it!