Archive | October 2016

Budgeting With Little Kids

This post contains affiliate links. I checked out the book referenced from my local library.

The only way to learn how to manage money is to have some money to manage. That’s why my boys, who are now four and five, get an allowance (two dollars per week).

(While I certainly do not embrace Dave Ramsey wholeheartedly, I got some good ideas about managing allowances with kids from his book Smart Money Smart Kids. In my house, the connection between chores and allowance is looser, but hopefully enough that the boys get the idea that money comes from work..)

As a general rule, they waste it. That’s how they learn, I suppose. It does bother me when their spending creates waste, as when they buy junky little toys that break, so I often try to create learning opportunities involve them purchasing their own consumables (markers, tape, construction paper, bubble liquid–things with which they tend to be profligate). The past couple of weeks, we have come across a couple of excellent non-wasteful learning opportunities for little tykes and their money.

Thrift Stores

Or as Little Brother calls them, “Smith stores.” I popped into a large one recommended by

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Not technically on list: stuffed turkey.

the XFP with quite a list of things I wanted for the kids and my new apartment, from “stock pot” and “ice bin” to “snow pants.” (All of which I found.)

 

It was allowance day and the boys went two different directions with their money. Little Brother bought one thing, a stuffed turkey from the Thanksgiving section. I think it’s meant to be a decoration, but he sleeps with it and kisses it and whatnot. He seems pretty satisfied with his purchase.

Big Brother bought a pre-assembled bag of Halloween nonsense, tiny decorations and party favors and whatnot. Well, at least it’s all pre-owned junk instead of new manufacturing. He managed to break one of the items before we even got home and hasn’t used or played with any of it. There’s a lesson for him here, although I suspect it won’t sink in for quite a while.

The Fall Festival

Their school had a PTO fundraiser. For a dollar, you could get four tickets and then use them to buy things like a turn in a bounce castle (two tickets) all the way up to a pumpkin you could paint (ten tickets).

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Captain American in the bounce house.

I bought each boy 12 tickets, using their two dollar allowance for that week plus one extra dollar. Big Brother immediately ruled out pumpkin painting as too expensive and went straight to the low-cost bounce houses. He spent his tickets on the two bounce houses plus a trip through the Haunted House (eight tickets). Now, here I was stumped. See, Little Brother had spent five tickets on a balloon flower and did not have enough money left for  the Haunted House, but Big Brother wouldn’t go through alone and I could hardly leave a four-year-old standing outside by himself. So I bought Little Brother some more tickets, figuring that Big Brother was of a better age to understand budgeting anyway. Actually “grace” is one thing Dave Ramsey talks about in the book; he advocates having your kids’ back sometimes (obviously not always, because then they would not learn that money is finite, but once in a while like this).

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Stem popped thirty seconds later.

They were, unsurprisingly, terrified by the Haunted House. As we walked to the car, Big Brother said that next year, he would rather paint a pumpkin. He was reflecting on his spending choices and thinking about to extract more happiness per dollar–I’d call that a win for a five-year-old any day!

How do you teach your kids about money?

Thursday, I stopped by the courthouse on my way to work and finalized my divorce. The whole process was, despite the mountains of paperwork, surprisingly brisk. About four months from first serious discussion to finalization, and the hearing lasted all of twenty minutes. The judge commended us on our “professionalism” and the care with which we had filled out our forms, gave us some orders he had typed out based on them, and sent us on our way. I was at my post at the library when the doors opened for the day.

Now, that doesn’t mean that we have finished tying up our loose ends–far from it. Now that the XFP and I are officially separate legal entities, I thought it would be a good time to take stock of where I am financially–and some remaining pitfalls.

The house

Frankly, disaster looms on this front. We had a contract. Buyers backed out fairly quickly–changed their minds about the neighborhood. Got another contract, cash from an investor, almost immediately, with a 21-day close. I moved out and signed a lease on an apartment. Then the investor changed his mind, too. (We got to keep $500 of the earnest money that time, which is better than a nail in the foot.)

We have both signed leases and have rent to pay, so now it’s a race to see if we can find another buyer before we default on our mortgage. Fingers crossed. We are getting a lot of showings and a fair bit of interest and we still have room to drop the price, so I am optimistic about our chances. Our arrangement calls for me to receive the first two thousand dollars of proceeds with the rest being split, so hopefully I’ll get a little money out of it.

Exchange of retirement accounts

We accidentally made a settlement that we can’t implement yet. The XFP agreed to transfer some of his 403(b) to me. However, he had borrowed against it, and so his bank will not divide it. I will need to monitor the XFP’s progress toward the loan; since all indications so far are that he is acting in good faith, I’m willing to be a little patient. (The plan is to pay it off with the proceeds from the house, assuming there are any.)

My car

This is a big question mark. Can the almost 18-year-old Auto Paragon last a few more years if I sink some money in it? Is it reliable enough transportation for a single mom? It seems to be making a peculiar noise and the transmission could be going bad. I will bring it to Dave the Acerbic Mechanic for his assessment. If his opinion is unfavorable and the proceeds from the house are adequate, I might consider replacing it. (I am imagining something similar to the XFP’s 2008 Fit.) If he thinks a moderate cash infusion could keep me driving in reasonable safety (if not, by any stretch of the imagination, in style) for a bit, then I’ll have it fixed up.

My apartment

Currently, it has bits of tape and cardboard and scraps of packing paper all over the floor, the ottoman is blocking the patio doors, my dresser is wedged unsatisfactorily into the children’s closet, and my daybed/the couch (thanks again, Grandma FP) is covered by a mismatched full-size quilt that I’ve owned for twenty years.

I’m working on it.

I’m also working (in the form of trying to save money and increase my earning power) on getting us a place to live, in the future, where I don’t have to sleep in the living room or go outside to do laundry.

My savings

Well, it could be worse. I have $600 in my HSA that I could access at any time (by submitting the receipts I have saved). My intention is to build this up as an investment instead, but it provides a little extra security.

According to YNAB, I hang on to each dollar for an average of 36 days before spending it, so I am not living on credit card float–pre-YNAB, I’m not sure I could say that. I have seven hundred dollars earmarked for paying the lawyer who helped me with my divorce paperwork and I may be able to add a little more at the end of the month. For good measure, the Frugal Patriarch* is, I hear, sending me a check to help jump-start my new life, and that will provide an extra cushion.

I also have nearly twenty thousand dollars in personal retirement savings, not counting the share I hope to receive from the XFP. It’s not much, but it’s more than nothing.

Analysis

Lots of balls in the air. Lots of question marks. But I have a lease on an affordable apartment, a car that runs, and enough money to cover a couple of minor emergencies. That’s a start.

*AKA my grandfather. Yes, he refers to himself as the patriarch, and I am sorry if you do not personally know him, because he is a millionaire next door and master storyteller and just simply a great person to sit around with drinking wine and shooting the breeze.

 

Where do you stand this month? What are your looming question marks?

I Was a Little Impulsive in September: Spending Report

When I was a teenager, my older sister would sometimes ask me to do something with her–go to the mall, say–when no more-interesting company was available. “I have to do homework,” I would say. Somehow, twenty minutes later, I was always in the car going to the mall.

This story is by way of explaining why I had over $500 in travel expenses this month. I impulsively flew home to spend the weekend with my sister and middle nephew, surprise my mom (successfully!), and attend Sis’s 40th birthday party. It was a tad irresponsible, but, to quote Arlo Guthrie, “You can’t always do what you’re s’posed to do.”

Income

Child support: $350

Spousal support: $383

Take-Home Wages: $1383.63

Dependent Care FSA reimbursement: $138

Selling stuff: $40

Kid reimbursements from the XFP: $116

Total Income: $2272.63

Internet: $82.01

Electric: $59.28

Water: $32.47

Ting: $29.46

My half of mortgage: $837.67

Total housing and utilities: $1040.89

 

ATM fees (reimbursable) and divorce-related miscellany: $15.20

Bike maintenance: $82.31 (ouch!)

Apartment application fee: $50

Groceries: $273

Wine:  $10.78

At-Home Food: $283.78

Gas: $38.59

Parking and transit: $29.50 (lots of extra bus tickets)

Total transportation: $68.09

Used bike for Little Brother: $50

Kid clothes and shoes: $74.51 (uniform pants, winter PJs and Halloween costumes)

Before- and after-school care: $73

The XFP’s share of things: $134 (some I have already gotten, some I will get on 10/20)

Doctor visit for LB: $98.36

Total kid spending: $429.87

Adult health (asthma meds): $165.88

Restaurants: $18.22

Coffee shops and snacks: $33.79

Snacks at otherwise free Corn Maze: $12

Total entertainment: $64.01 (having the house on the market is still keeping this category high)

Haircut for me: $53

Clothes for me: $35.74

Misc. shopping: $8.99 (car charger for cell phone)

Total “me” spending: $96.78

Travel: $526.41

Grand total spending: $2823.22

Analysis

So, first I need to confess that I am confused about how much my shortfall is. YNAB calculates things a little differently because of the way money actually changes hands. See, I didn’t receive a check or spousal support or write one for the mortgage–the XFP and I just added up everything we owe each other and I wrote him a check for a couple hundred dollars, then I tried to reverse-engineer everything on here. YNAB shows a shortfall of more like two hundred dollars, as opposed to the over five hundred shown here. Hopefully this is something that will become more clear to me as I get the hang of how my monthly finances work.

Obviously, I can’t overspend myself every month. I had to shift around money that was earmarked for other things (eg, paying my lawyer), so refilling those stashes will be a priority next month. My before- and after-care charges reflect an increase in my hours that hasn’t shown up in my income yet, so that’s a factor as well–things should look better next month.

Considering the medical expenses and the amount of fun I had on the trip, I’m pretty satisfied with the month.

How was your September?