The following guest posts was written by Lori at Argyle & Apricots.
Lori Zimbardi writes at Argyle & Apricots and shares her journey of inspiring women and writing from redemption with humor and honesty. Lori works as a Care Coordinator at Sandals Church in Riverside, CA. She helps to transform the lives of those in the church and community that are in financial need.
It makes Good Cents to make the most of your money by using coupons and looking for great deals. It makes even better sense to teach our teenagers and young adults how to budget and make the best financial decisions possible. Are you making a conscious effort to lead your kids down the right financial path or are you teaching them bad habits that they will take with them into adulthood?
Our current economy has aided in the financial downfall of many families, but the drop could have been less painful for many if good financial decisions had been made even during the booming economy. Let’s give our children a leg up in life and teach them some simple principles for financial success:
Principle #1 Know That Debt Owns You
- Debt creates anxiety and stress. Money is the #1 cause of anxiety and stress. Just imagine a life with out it! Not the money, the stress.
- Debt derails you from your calling. Yes, do what you have to do so you can do what you want to do but make sure that you will be set up to eventually do what you want to do.
- Debt breaks apart families. Money is the #1 reason people divorce. Probably due to all of the anxiety and stress and working in a job you hate.
- A good rule of thumb is: If you can’t pay cash, don’t buy it. Another good rule is: Think about setting a buying threshold. Any purchase over a certain amount requires input from your accountability group. An accountability group is friends that you trust, can be honest with and you will listen to when they tell you no. Yet another good rule: Get an accountability group.
Principle #2 Financial Decisions Should Follow a Set Process
Ask yourself these questions:
- How does the financial decision align with your priorities? Does it mean that you now have to compromise elsewhere in life?
- Does the financial decision allow you the margin that you are looking for? How much is left after the bills are paid?
- Have you searched out guidance or input from others? What does your accountability group say about it? No group? Again, get one.
- Do you understand the circumstances as they relate to your current financial situation? Can you really afford it without having to sacrifice something important? PS. Cable is not important. Read a book.
Principle #3 Set a Budget and Stick With It
- Set a realistic budget. How much do you really have to spend?
- Spend according to it. When it’s gone, it’s gone.
- Reconcile it monthly. If you know what you have to spend and then subtract what’s left, if any, you’ve reconciled it. Deposit what is left in savings and begin again.
Imagine how much easier our kid’s lives will be if they are well equipped to make smart financial decisions. I certainly wish someone had spent the time to invest in me when I was young. Wow, I would have done things a lot differently.
Note from Beth: Lori has some wonderful ideas and points to get you financially on track and share with tyour children how to start out on the right foot and keep on the right foot! I think it’s so important to teach children young, so I often in involve my children in coupon cutting, grocery trip planning, and all that. But we also involved them this year in a big decision – a all-out family trip to Disney before Ady enters Kindergarten. We explained our plan and that we were going to save for the trip by cutting back. Now, when we head to the store and someone inevitably asks for something, it’s so cute to see the other one say, “No… we’re saving for Disney! Remember?”. I can’t wait to expand on these lessons as they grow, so hopefully they can avoid mistakes I made long ago.
Share with me! How do you teach your kids about financial responsibility?