Are my kids frugal? + one more question
Today we've got two questions from reader Suzanne!
Do you actually have separate accounts for all your expenses (clothing, vacation, electric, etc)? And if so, how big do you let the accounts get if you have over calculated how much say heating will be in a year.
Yup! At least, that's true for the things that don't get spent every month. For instance, I usually spend all of my grocery money, so I don't have a separate account for that. Same goes for things like our mortgage, our Ting cell phone bill, and our $20/week date night budget.
But for things like vacations, home improvement, medical savings, clothing, auto repairs, and auto insurance (we pay once a year), I have separate online savings accounts. Those aren't regular, predictable monthly expenses, so it makes sense to automatically funnel our budgeted money for each of those categories straight into the appropriate account.
That way, when our yearly car insurance bill comes due, we have the money for it. When an auto repair bill comes up, we can just transfer the money out of that account to pay the bill.
And when I go clothing shopping, I just transfer the money over to our checking account.
It IS a slightly clunkier method than doing a spreadsheet and virtually separating all the money into categories, but it's simple and mostly hands-off, which is worth a lot to me.
I haven't run into a huge problem with my savings accounts getting too large (that would be a lovely problem to have), but if we're running low in one account, I will sometimes borrow from another account that's not getting used as much.
For instance, our clothing account tends to get a little bigger than it needs to be, so I might transfer some of that money into the vacation account. 😉
Are all your kids frugal? Them seem pretty amazingly resourceful and creative but do any of them resist the frugal nature of your household? While I am not as frugal as you, I’ve always been careful with our spending but my oldest has always felt restricted by our budget. He has, as the saying goes, “champagne taste on a (really bad) beer budgetâ€! He is slowly learning about budgeting his expenses but he’d rather buy his whatever at Starbucks than make it at home. My other two complain sometimes (how come you make pizza when my friends get it delivered every Friday?), but they understand when I say your choice: pizza or a day snowboarding?
When it comes to their own money, they're relatively frugal. My oldest two (both of whom have jobs) especially have been super disciplined about socking away most of their earnings into savings for future expenses.
They do both spend some of their money, but Joshua tries to keep his purchases limited to what he earns in tips at the coffee shop (for instance, he saved up his tips to buy a new coffee grinder for home use).
And Lisey mostly just spends some money on small things like coffee out with friends.
Sonia and Zoe earn money by babysitting and dog-sitting. We have them split up their earnings into giving, saving, and spending, and they have pretty free reign over how they spend their spending money.
Right now, that's mostly Calico Critters and craft supplies. 😉
I help all of my kids get the most bang for their buck when they do need to spend money, and they appreciate that!
Sonia and Zoe are always grateful for a 40% off coupon at the craft store, for example. And when Joshua needed to buy a bunch of shirts for work recently, he was very happy that I helped him find a online sale plus a coupon plus free shipping.
When it comes to their parents' money, they're obviously not quite as inspired about money-saving measures.
But it's not like they live a crazy-deprived life. Groceries from Aldi, homemade yogurt and bread, off-season vacations, and clothes from ThredUp aren't that miserable. 😉
And if they want something like spendier clothing or coffee from Starbucks, they're more than welcome to spend their own money on that.
I've written some about kids and money in the past, so I won't rehash all of that here. And if you weren't asking for advice, just ignore this:
Especially with a spendy kid, it's super important not to bail them out when they spend all of their money.
They need to learn that once their money is spent, it's spent, and there's no getting loans or going into debt to parents. Reality is a perfect natural consequence as long as you don't rescue them from it.
Hopefully as he sees this play out with his own money, your son will come to terms with the fact that money is a finite thing, and everyone has to make choices about how they spend it.
Hang in there, frugal mama!
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Readers, if you've dealt with a kid who's unhappy about your frugal choices, could you chime in with some advice for Suzanne?
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Got a question of your own? If you'd like me to answer it in a future Q&A, send it to me via email!
I don't an extra account for spending. I utilize my budget for keeping track of that mostly. I do automate my finances which means there usually isn't much in my "spending account" anyway with most of it going to work other places.
Great post and thanks for sharing!
My kids aren't old enough yet for this to be an issue, but maybe I can add a different kind of perspective to the "not-so-frugal-kid" debate.
I grew up with a really frugal mom. I am sure she would have said, for a long time, that I was not terribly frugal. That's because I made very different frugal choices trhan she did (I actually read your son's preference for Starbucks and immediately understood!)
A few frugal things that my mum did that I hated as a kid and jettisoned as soon as I was an adult with my own money:
-used bikes from garage sales or the dump (they were never comfortable and the chains always fell off- I thought I hated cycling until I tried a real bike, now I cycle every day!)
-always packing a lunch for a trip to the zoo or somewhere else (I am on the fence with this one. As a kid it was SO EMBARRASSING, but as an adult I can appreciate the price and low quality of concession food. I compromise by packing a lunch and then everyone can get a treat like an ice cream at the concession)
-ill-fitting hand-me-downs or thrift store purchases. I still buy used at least half the time, but I am picky. It has to fit well and look good. I got mocked mercilessly as a kid for some of the awful clothes my mum dressed me in, and I never really learned how to look "put together" until wayyyy late in adulthood.
-I pay for parking. My mum used to circle the blocks looking for street parking for HOURS until she could find a free spot, and we were all late and crying. I circle *once* three pay for a spot in a lot.
On the other hand, there are other places where I am more frugal than my mum was as a young parent. We only have one car, for example, and we constantly use public transit. We don't live in a big house or have AC. Kijiji (Canadian Craigslist) is a thing now, so we can be choosier about the used stuff we do get.
In other words: don't despair. There may yet be hope, even if his spending priorities aren't yours.
Oh my gosh, YES, yes, yes about the being picky about clothing. I do buy some second-hand clothes for my kids, and they've worn a lot of hand-me-downs, but I am mercilessly picky about what I'll buy/keep. I will not keep or buy a piece of clothing just because it's cheap or free...it has to also look good and fit properly.
I'm the same way. I buy the majority of my LO's clothes second-hand, but I learned really fast that I needed to be pickier than picky. It can't look worn or pilled, and it needs to fit right. I'm all for cheap, but I want my kid (and myself) to look presentable.
I SO agree with this post! Ditto everything, especially only very high quality used bikes, clothes & sports equipment. My kids liked packing lunches on most outings, but I do agree with getting a treat on an outing, like ice cream. Two things I would add:
1. My kids attended a suburban school with pretty wealthy kids. Especially during the middle and high-school years, I tried to accommodate a few of the "most important" seeming trendy clothing items, as long as they were high quality. For example, UGG boots were very "in" and so I invested in one pair per girl, brand new. I started this after they told me that kids would really tease those with knock-off versions of the boots. My girls knew we couldn't and wouldn't do this for every item, but I was willing to go along with one or two "heart's desire" items per year per girl. I remember how ostracized I felt as a teen with knock-offs.
By the way, the girls have all grown into frugal and non-trendy adults (they love thrift stores and cooking at home) so apparently it didn't do any harm.
2. My very best financial teaching tool was a set allowance. They didn't have to 'earn' it; chores could produce supplement, but everybody got something. Then anything they wanted had to come from that money. In elementary school and middle school, it was weekly, but in high-school I gave it to them monthly. They had to decide how to budget it and spend it. So if you had spent all your money and then really wanted to go to the movies or the football game at the end of the month, too bad. Really good gentle lessons came from this.
A lot of kids at the HS went out to lunch every day (seriously! Panera or Chipotle type lunches daily!!). I told the girls that this $ had to come out of their allowances. I would always pack their lunch if they wanted for 'free' but wouldn't pay for them to go out. In each case, they talked their friends into packing or buying in the school cafeteria instead of going out! Frugal peer pressure 🙂
Good to hear from a mom who has "been there". To me, the point of being frugal is to prioritize where to spend money. I know there are people out there struggling to put food on the table and there is no wiggle room financially, but if you can manage it, I think it's important to find those areas where a little splurge would be most appreciated. Martha, you seemed to do that well! I have one child entering high school and one entering middle school this fall--I hope I can follow your example!
Agree on the allowance!
Thank you for sharing this. Our son attends a local private school, and it takes quite some sacrifice to pay the fees. For us, it's a no brainer: 20 kids in his class vs 44 at the local government school. We know most of his classmates are from wealthier and probably less frugal homes, and we know keeping him happy will cost us a few designer purchases. Kids can be cruel, and some savings are just not worth it.
You know, I used to keep separate online savings accounts for everything, but it was a bit much for me. I just prefer to have all of them in one large bucket that I track in our spreadsheets. But to each their own!
For me, spreadsheet tracking works better than actual separate accounts, even for the big things such as house maintenance.
Which is, right now, a big thing. My elderly AC needed a substantial repair, during which the company discovered that the furnace needed an even more major repair. It makes more sense to replace the 31-year old furnace than do a $2-3k repair. I hope the next one lasts as long! ProTip: maintenance contracts can be advantageous. The labor on all this work will be free, I get a 10% discount on material, and because I'm a long-standing customer I'll be able to negotiate an additional discount as well. It Never Hurts To Ask is my frugal motto.
The reason this isn't throwing me for a financial loop is that I started my house maintenance fund when I bought the place, over 12 years ago. This year is the first one with major maintenance costs - a bit of plumbing a few months ago (although there's no such thing as a ~cheap~ bit of plumbing when they have to get into the ceilings), now this. Thank god for good planning and good luck.
Usually I have a set amount that I am willing to spend on say sneakers ($50) if the sneakers my children want are more expensive they need to make up the difference. I started this at 8 years old. I also started (when they were 3 or 4) charging interest when they wanted to borrow money for an item at the store. For example if they borrowed $1 for something they needed to pay $1.25 when they got home. The boys learned pretty quickly not to borrow money for purchases.
My son is only 2 years old, but we sure hope he will be frugal (not stingy) like us in the future. I will consider it one of my biggest achievements if he is. ^.^
We don't have separate accounts for our expenses. Mr. FAF and I have a joint account which we use to pay for all of our expenses. We also have a checking account for our emergency fund (which we hope we won't never have to use hehe).
We only three bank accounts. One checking, one savings, and one business. All our monthly expenses are withdrawn from our checking account and if it gets low, I just transfer funds from our savings. We also have spreadsheet for all our expenses so that we can monitor our money and expenses easily.
Last Saturday our daughter had a birthday party and she got some money ($36!) and she hasn't decided what to do with it yet. So I told her she can save it for her school supplies this year! I'm glad that she likes the idea.
I saw a book called Literary Yarns at my library and thought of your daughter's craft projects. It has "crochet projects inspired by literary characters." Here's the link on Amazon if you want to check it out: https://www.amazon.com/Literary-Yarns-Crochet-Projects-Inspired/dp/1594749604.
When Husband and I got together we both brought a lot of financial baggage.. and we did a very poor job of handling it.. we lived *large* and continued to pile on debt instead of chip away at it... it was a really large reality check when the u/s tech informed us we were going from a family of 3 to a family of 5.. and 3 in diapers was the least of the $$ issues we were looking at...
I became super cheap and frugal and tightened down the latches and husband was along for the ride and has started to truly be on board through the years...
Kids are older and wise and know that they don't get everything they ask for...
Last night my teen aged son was trying to start an argument with me over him being required to eat the same meal we had a few days earlier and him not *liking* that meal- I knew he was trying to manipulate the situation b/c my MIL doesn't like me and was 1000% on his side of not trying *weird foods*
I stopped the conversation by telling him he was MORE than welcome to obtain a part time job, continue attending high school. We will establish an appropriate rent monthly and he is absolutely free to eat what he purchases and prepares, buy his own underware and socks and figure out his own life transportation... Since in OUR home he has ALL of his needs met and MOST of his wants covered... respect and appreciation cost him nothing...
His response..." Yes, mom" as he walked back to his seat.. with a plate of desserts..... 🙂
MOM WIN!
I'm curious about the logistics of the various savings account. Do you automatically have a certain amount deposited into each separate savings account each paycheck? (Is this even a thing that banks/employers will do?) Or do you manually transfer amounts and, if yes, doesn't that count against the allowable bank transfers each month? We do all our banking online and we can have all sorts of various accounts but that has always seemed cumbersome to me. If you've blogged on this before, direct me there! 🙂
Many employers will let you send amounts to various accounts - the bigger the employer, the more likely you can do this. Check with payroll, HR, or the office assistant to see if yours can do this.
Most banks do not count transfers to accounts within that bank, as a transfer. But you'll have to check with your specific bank to determine if this applies to you. Some banks can set this up automatically - every month, put $x dollars in Account A and $y dollars in Account B.
Some banks can set up "sweep" accounts, where if you have more than a certain amount in the main account (typically a low-return checking account), the bank will "sweep" the extra into another account (typically a higher-return savings or money market account). Or can do the reverse: when the checking account gets below a certain point, the bank will transfer funds from a different account (say, the money market account). This is more common in business accounts than personal ones, and I don't know the fees involved, and it does require you to keep good track of how much is in each account, lest you make a costly error.
Thank you for your detailed reply! We bank online with Capital One 360 and, after reading this post yesterday, I did a little research and think I have figured it out! My husband's employer is a small private school so employer-related different deposits aren't an option, but I think I can make it work through our online bank. Thank you again!
I have Mr. FG's paycheck deposited into our brick and mortar checking account, and then I have a bunch of automatic transfers set up thru Capital One 360. So, every month, $100 is automatically transferred into our home maintenance account, for example.
So, I don't do it thru his employer, I just do it right thru Capital One.
I echo Kristen's comment about "don't bail them out". They need to learn now with little mistakes so they don't make bigger, more serious mistakes when they are older.
I started giving my kids allowance every Sunday when they were 6. I separate it into the same categories as Kristen...Sharing, Saving and Spending. I use their age as my general guideline. They receive $14 a week. ($9 for spending, $3.50 for savings, $1.50 for sharing).
When back to school shopping time rolls around, I get them to do an inventory of what they already have and list everything they need. I give them a budget (this year was $200 each) and they are responsible for picking everything out. I take them around and they do the calculations and the deciding and it's amazing the learning that goes on. They are usually a smidge under budget and they always get everything they need.
One of the best things we did when our son was small was to help him relate money to time. If you want this toy it takes this many hours to earn the money to buy it. But first we have to work this many hours to buy food, this many hours to pay to live in our house, ect on & on. Then what's left we get to choose where it goes. Understanding that at a young age really helped him not be so much of a spendthrift as he matured.
Rather than a vague allowance, I put my son in charge of portions of the budget that were for him (like his clothing). He became a very careful shopper once he had to budget it himself.
In our family, only one child, we all had chores as part of the family and we all three received an allowance as part of the family. If your daughter wanted something beyond our budget she was free to pay the difference from her allowance. And hubby could buy camera equipment from his allowance without having to consult me. As a mother, I appreciated having my own money to spend or save as I chose without feeling like I was depriving my family of something.
I use a few separate accounts for specific savings goals, but I also use general accounts for some savings. My kid is due any day now, but I'm hoping he or she ends up being frugal like us.
When I was in university, a friend and I both ended up overspending on our new credit cards at roughly the same time. When I asked my dad for money to cover the overspending so that I wouldn't have to pay interest on the card, he flat out refused, and told me that I was an adult who had to live with the consequences of my overspending. That was the last time I ever put more money on my credit card than I could afford to pay by the due date. My friend, on the other hand, got a cheque from her dad to pay off the balance, and it wasn't long until she had overspent again and was going back to her parents for more money.
All of that to say, yes to natural consequences! They definitely teach good financial lessons.
We live paycheck to paycheck. My girls are 9&13. My 13y/o old really never asks for much,but she refuses to buy her clothes 2nd hand. I can understand that,but she knows her clothes will be from Target,Marshalls or TJ Maxx. I buy her just enough outfits to last her 5 days and then of course she re wears them. She is good about going into a 2nd season with these same clothes. All in all my girls understand that things must be on sale or we have a coupon for most items. I do buy them both a new pair of Converse and athletic shoes every school year. Thus far the knock off boots from Payless have been ok. I look around and other kids in their schools and think some parents must spend thousands a year for clothes. My girls are good about putting their money is their savings accounts. They get paid to mow every week. All other household chores are just part of being part of our family. As a single mom I try my best to provide most things for them. We are very thankful for a grandma that also has the means to treat them to clothes and other things. At the end of the day we are very blessed,but it is so hard not having anything extra. Maybe in time that will change.
Hi! Isn't today, the 4th, your blog's birthday? Thanks for another year of great posts. Here's to many more. Cheers!
Oh my, you're right! I forgot!
I don't know why this didn't occur to me before but we don't budget for dates. Why not?! 🙂
I tell this to all my friends but Dave Ramsey's book Smart Money, Smart Kids is truly excellent for raising kids who are clever with their money.
I tried to raise my kids to spend carefully, but my husband and I didn't always spend so carefully and made some dumb mistakes, so the lesson they got was somewhat ambiguous. I've made efforts to correct that, since then. Both of my now-grown kids know how to be frugal, and one is a master at it. The other one will be quite frugal on some things, but has a bad problem with impulse control. She is spending all she makes and more on impulse purchases, and we are doing one of the hardest things for a parent to do -- letting her fail. It's the only way she'll learn.
p.s. we gave her Dave Ramsey's book, directed her to frugality blogs like this one, and talked to her openly about our past failures and recoveries. We hope it will sink in before she gets too far behind.
Hey it took me a few seconds to realize those were my questions! And, I apologize for the typo Thank you, Kristen and everyone, much appreciated!