Why Budgets Don't Work and How To Fix It!
by Terry Rigg

This article is for those families that have sat down at a desk
or the kitchen table time after time trying to develop a family
budget that they can live with.

Why don't they work?

There are several answers to that question. Most budgets are
doomed from day one because they are too complicated, don't have
the commitment of all involved or the numbers simply don't add
up. The biggest culprit is that most people don't allow for
unexpected expenses.

Let's tackle these one at a time:

Too Complicated:

When you list every expense you have on your budget you set
yourself up for defeat. Some budgets include such things as
cleaning supplies, dog food, haircuts and car gas. In order to
keep track of all of these you would need a new box of envelopes
every month.

Answer: Streamline your budget. By simply including a topic on
your budget entitled "Household" where you can include
everything you spend money on each month, excluding bills.
Groceries will undoubtedly be the largest expense in this
category. By taking the extra time to figure what needs to go
into your household budget when you set it up, you can save a
lot of time each payday.

Commitment:

1. Many times the commitment to live by a budget is lacking.
2. People get into spending habits that are hard to break.
3. There is constant friction in the family over money.
4. It is more comfortable to live beyond your means.

Answer: You have to consider all of the above problems when
setting up your budget. The Family Budget is just that, the
FAMILY BUDGET. Everyone in the family that is old enough to
count should be included. I don't mean to say that children
should have a say in where the money goes, but they should be
aware of what the spending limits of the family are. If you work
closely with your spouse in developing a family budget you both
are more likely to stick to it. There is one other detail that
will help. By setting aside money for yourself and your spouse,
that you don't have to account to the other for, your budget is
more likely to succeed.

The Numbers Don't Add Up:

You have more budget than you have paycheck. Generally, this is
caused by not being realistic in your budget. You try to make
your paycheck fit your budget.

Answer: Start by listing your household expenses and bills.
Then include 10% of your income for long and short term savings.
If this total is more than your paycheck, you have to cut back.
Start by looking at your household budget. Are there items that
you can do without? If you have money left over after
considering all of the above, then increase your savings.

Unexpected Expenses:

This can be from your car breaking down, need a new washer or
any number of other expenses that you can't predict.

Answer: While long term savings is for things such as a home or
car purchase or college for the kids, short term savings is just
as vital to your financial security. A short term savings will
accomplish two things. It will provide you with the money you
need to pay those unexpected expenses and it will cut down on
the use of credit cards. The short term savings could save you
hundreds of dollars a year.

When you develop your budget, keep the following things in
mind:

1. Make your budget as simple as possible
2. Get the family involved.
3. Make your budget fit your paycheck, not the other way around.
4. Plan for the unexpected.

Copyright Terry Rigg.  Budget Stretcher is a one man operation home based in the hills of Southeast Missouri. It was started in January 2000 as a means of helping anybody that needed help with their financial problems. Visit to learn more.  http://www.homemoneyhelp.com/

Teaching Kids about Money
by Jill Cooper
 
So many people ask how to teach their kids about money, hoping we can give them a 1-2-3 formula to use that will help their child become a wise caretaker of his money and maybe even a future Bill Gates or Oprah Winfrey. Many parents ask this question because they are terrified that their children will turn out just like themselves when it comes to spending money. They hope that the "Do as I say, not as I do" method might actually work in this case.
 
The bad news is it won't. Children usually become "chips off of the old block". It really is a monkey see, monkey do world. They almost always learn by example - your example, dad and mom.
 
The good news is that you (parents) can change. That is the first step in the formula. Put into practice the things that you want your children to learn. I know a lot of you don't want to hear that but I'm afraid that is the way it is. The good news is that it really isn't as hard as you think. If you expect a 5, 6, or 7 year old to learn to handle money wisely, surely you as a grown adult will be capable of doing it too.
 
I read a lot of novels. You can learn quite a bit about human nature from novels. In almost every novel I read, the hero works as hard as his men and expects no more out of them than what he expects of himself and the men love and admire him for it. Now I know I'm talking about a novel but think about it with regard to these everyday life examples. How do you feel at your job if your boss places strict demands on you to do certain things that he is not willing to do himself? Resentful, angry and frustrated? Your children feel the same way if you expect them to be wise in money matters when you are not.
 
The second step in the formula is to teach children how to earn money before they learn how to handle it. This should seem logical and you may say "Well of course everyone knows that!" but do they? The people we deal with on a daily basis don't seem to know that. How many people do you know (maybe even you are guilty of this yourself), who spend money they haven't even earned. Do you instantly say not me! Hmmm... How many dollars worth of credit card debt do you have? Isn't that spending money you haven't earned yet? We need to keep our eyes open to how we handle money, before and after we earn it.
 
The best way to help children learn positive work ethics and give them a chance to earn money is through chores. There is nothing wrong with age appropriate chores and jobs. Chores help to teach children the weights and balances of earning and spending - Earn $10 and you can spend $10. A lot of parents live with the idea that one can spend $10 and then frantically try to work to get $10 to pay for it. Another alternative that seems to be gaining popularity is to mooch off of someone like their parents or to become indebted to a credit card company.
 
Is it surprising why children are getting confused? It is because they are receiving mixed messages from dad and mom. This is why it is so important for parents to get their acts together first.
 
I believe in giving allowances for chores that are done. This is a great way to teach our children the earning - spending concept. It teaches them another life skill to prepare them for when they enter into the work world. It's simple. Do your job, do it well, do it on time and you will get paid.
 
Whatever you do, don't give your children allowances when they haven't earned them. You are doing your children a great injustice when you do this. They learn early on that they don't have to do a thing because mom and dad will pay for it. Twenty years later, parents find themselves with a 28 year old man sitting on their couch, watching their TV and munching on pizza and chips that their hard earned money paid for. They can't figure out how to get rid of him or what went wrong. By giving kids money and "stuff" without having to earn it, they learn to be takers and not givers. Then we wonder why, as adults, they have the attitude that the world owes them something for nothing. They have learned that they have no reason to bother to lift a finger to contribute to society.
 
Some people refuse to give allowances because they say that children should do things because they are members of the family. They need to learn to do things without expecting a reward. I agree with this to a certain extent so what I did was divide the jobs up into certain categories. For example, feeding the cat, walking the dog or raking grandma's yard could be done just to teach the care and responsibility for someone else because we love them. This teaches responsibility towards those we love, expecting no reward.
 
Things like keeping their rooms clean and beds made could be included under the allowance category. There were also times when we would have extra large projects like painting a fence or cleaning a very messy garage. In these cases, I would give the kids a little extra because they were such big jobs and the kids had worked so hard doing them.
 
Like everything else there is a happy medium. Everyone likes a reward for a job well done. Even God rewards us for jobs well done. If we never give our children an allowance, they could become resentful.
 
You may ask, "What do I do if I really don't have any extra to give my children at this time in my life?" First, you don't need to give children a lot. Even a small amount can seem huge to them. You can also pay them in other ways. For example, if you do this job, I will let you watch TV or play video games for an extra hour. Sometimes these things are more important to a child than money. My grandson mows my yard for me. He would do it for nothing, but I like to pay him a little for it. One day when he was done mowing we walked to a convenience store by my house and I bought him a slushy. He was more excited about that than about all the money I had paid him before.
 
If you really have nothing to pay them at this time, that's OK too. Children have a very keen sense of justice. They usually know when mom and dad are not paying them because things are in "crisis" mode. If you have been fair with them in the past, they know you will be fair with them in the future when things aren't so tight.
 
Step three is to be sure and teach your child about savings and tithing. I will never forget the first allowance I ever received. I was about 7 years old and my allowance was a quarter. I remember two things about that day. The first was that my mom said that out of any money we earned, we were to give 10% to God. I didn't know about percents at the time and had to ask how much 10% of 25 cents was. She said it was 2 1/2 cents. I remember being confused and asking how I was to give half a cent. Then she said the second thing I will always remember from that day. I couldn't give half a cent, so I should give 3 cents because that extra half cent would show our thankfulness for all of the many other things that God had given us as gifts that weren't in the form of money.
 
To this day I have always given my tithe without hesitation and I round it up to an even number. Because there are so many extras that God has blessed me with other than money; the sack of tomatoes from the neighbors garden, the used car someone sold me at a discount, the meal that was brought to me by a friend when I was sick and so on. Do you see what a big influence my mom's words and actions had on me? She was my best example as you are the example for your child.
As far as savings goes, I always tried to teach my kids to tithe, save a little and spend a little. I have found though that the best way for a child to learn about saving is through the "hard knocks" of life. Maybe for a child, I should change that to the "soft knocks" of life. ;-) There is no better way for a child to learn to save than for that child to quickly spend all of his money at a bubble gum machine and on candy bars and then see a sibling, who has carefully saved, be able to buy a really cool toy the next time they go shopping.

Another way for kids to learn about saving is, when they desire something very much, to have mom or dad tell them to save their money for it. You can't break down and buy it for them because you will defeat the purpose. It's hard I know. It's even worse being a grandmother and not breaking down and buying them everything they want, but after a while you will come to realize how exciting it is for a child to save and save and then finally reach their goal's end.
How much should you pay a child for allowance? My first quarter was enough for me to buy four Hershey's bars with almonds, to tithe and to save a couple of cents. I thought I had died and gone to heaven -- four whole candy bars! For this reason, I have always regulated my children's allowance to make sure that they have enough money to buy four or five candy bars. I wouldn't want to say, since some think I'm an expert in finances, that my whole belief system revolves around the price of candy bars but hey, if the shoe fits, I must proudly wear it. Of course, as the children grow and take on more responsibilities they should get gradual "pay raises" in their allowances.
 
Just a couple of closing thoughts: With more money comes more responsibility. Keep the amount of money you give your children in proportion to how responsible they are. This will help them to learn to use their money wisely rather than to waste it because they have more than they know what to do with. In the same way that you wouldn't give a ten year old a new car to drive because he isn't responsible enough yet and doesn't know how to use it properly, don't give your children more money and things than they can responsibly handle.
 
Teach your children to use their own money to buy those things that they want so badly, rather than buying lots of things that you can't afford. This will this teach them how to save, how to be more discerning when presented with an opportunity to buy something and how to care for things better and appreciate the things they have more.
 
Lastly, but possibly the most important: teach your children to use a small part of their money to buy gifts and to give to others. This could include anything from buying a family member something little at a garage sale to giving 50 cents to the humane society or to that special offering for missions at church. Remember, the whole object is to learn to be wise stewards of their money and to be givers not takers.

Jill Cooper and Tawra Kellam are frugal living experts and the editors of http://www.LivingOnADime.com/   . As a single mother of two, Jill Cooper started her own business without any capital and paid off $35,000 debt in 5 years on $1,000 a month income. Tawra and her husband paid off $20,000 debt in 5 years on $22,000 a year income.

Top Ten Ways to Raise Responsible Children
by: Mark Brandenburg

1. Start them with tasks and chores when they’re young.
Young kids have a strong desire to help out, even as young as age two. They can do a lot more than you think if you have patience and let them do it their way.

2. Don’t use rewards with your kids
If you want your kids to develop an intrinsic sense of responsibility, they need to learn the “big picture” value of the things they do. They won’t learn that if they’re focused on what they’re going to “get.”

3. Use natural consequences when they make mistakes.
If they keep losing their baseball glove, let them deal with the consequences. Perhaps they have to ask to borrow one for the game. Or, perhaps they have to buy a new one if it’s lost. If you rescue them every time they screw up, they’ll never learn responsibility.

4. Let them know when you see them being responsible.
Specifically point out what you like about their behavior. This will make it more likely to continue to happen.

5. Talk often about responsibility with your kids.
Make responsibility a family value - let them know it’s important.

6. Model responsible behavior for your kids.
They’ll learn most of their responsible behavior from you. Remember that they have a VERY close eye on what you do.

7. Give them an allowance early in their life.
Let them make their own money decisions from an early age. They’ll learn their lessons in a hurry.

8. Have a strong, unfailing belief that your kids are responsible.
They’ll pick up on this belief and they’ll tend to rise to the level of expectation.

9. Train them to be responsible.
Use role play and talk to them about exactly what kind of behavior you expect from them. It’s hard for kids to be responsible when they don’t know what it looks like.

10. Get some help and support for your parenting.
At times it’s hard to know whether you’re being too controlling or too permissive as a parent. Talk to other parents, read books, or join parent support groups - whatever will help you feel like you’re not alone.