Don’t Wait to Teach Kids About Money

kids and money claratii

kids and money claratiiThe birds and bees seem to be a hot topic that parents nervously dance around. However, I am seeing and hearing the same attitude around money and family finances.

Share Family Finances Through the Child’s Eyes

An easy way to communicate to kids about the importance of finances is to use their own world and categories which impact them the most. Toys, clothes, video games, food, especially eating out and even the family transportation costs are all easy, interesting examples for kids to learn from. Mortgage, tax season and IRA’s are topics that might come up as concepts, but they aren’t financial decisions kids can take part in.

Money Doesn’t Grow on Trees

Living above your means will put you below your ability to make decisions. Talking with a fellow personal finance fan, I asked him frankly how he taught his kids about credit. “There is no such thing as credit, if you don’t have money for it, you can’t have it.” This is a perspective that will set up his kids with a serious approach to finances. His kids now literally say, “I don’t need to spend money on that, I can wait.” I beamed when I heard that!

“More than three-quarters of renters between the ages of 18 and 24 spend more than they earn every month, according to a survey of 1,000 renters (of all ages) by Rent.com. This is the case even though 17% of respondents in that age bracket say they’re willing to live with roommates to save money.

More than 20% overspent their income by more than $100. That’s every single month. And since they haven’t built up their credit histories yet, it’s a safe bet that these young adults are paying relatively high interest rates on the resulting credit card debt.” – Martha C. White, TIME – Business & Money

How to Talk to Kids About Money?

While it may sound strange to my fellow Costco shoppers, I have started talking about loud and sharing my thoughts on items to my soon-to-be-one-year-old daughter. Silly? If nothing else, I am practicing the skill of talking through finances so that I will be ready as it’s never too early to talk money.

Topics to Teach:

  • Needs vs. Wants
  • Value of a Dollar
  • Credit is Borrowing Money You Don’t Have
  • Value of Saving and Delayed Gratification
The importance of early influence: “So many adults get into financial trouble, in business and in their personal lives, because of bad decisions. We hope to influence kids at an early age so they learn to think about their actions, and the consequences of making bad decisions. It doesn’t just influence success in business, it influences your family life as well.” – Jenn Savedge, Mother Nature Network

How do you talk to your kids about money?

Posted in Managing Finances, Personal Finance Tagged with: , , , ,

Feature Highlight: Know what’s safe to spend with Unallocated Funds

A picture of Levi's jeans with a price tag which says "$ SAFE"

Recently, I ran out of pants. I was down to just two pairs of jeans which weren’t torn at the ankles or blown out at the knees. I decided that I should just bite the bullet go out and buy a pair or two, but I wanted to know how much cash was available to spend in the checking account. To find out, I used Claratii’s unallocated funds view.

A screen shot showing the unallocated funds view. In this example image, $384 is unallocated for the next month.

Towards the top of the Projections page for my checking account, I can see that until May 2nd, I have a total of $384 that I could spend. That number takes into account all of my future expenses, incomes, and Wants as well as keeping me above my reserve. This means that I’ll be able to cover my mortgage, car payments, food, etc as well as get all of my Wants as soon as possible as long as I spend less than $384.

With this information in hand, I can go out in search of the perfect pair of jeans without fear of blowing my budget because I know exactly what that budget is.

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Using your “Daily Spend” to keep your perspective

Getting Perspective

Lifehacker featured a post today, The Behaviors that Destroy Your Financial Health (and How to Avoid Them), and in there is a point which says losing your financial perspective is bad. A solution offered is for you to understand your “daily spend” allotment, an estimate of how much you can spend per day after all your other obligations are covered. Understanding how much that shirt or video game costs relative to what you can reasonably spend per day may help guide your spending decisions.

If you think that’s something that’d be useful for you, Claratii can help you figure that out. If you’re already a Claratii user, go to the Incomes and Expenses page. If you’re not, sign up!

You can calculate your “daily spend” allotment by simply subtracting the total Daily Average income from the total Daily Average expense.

Screen shot showing the total Daily Average income and expenses highlighted.

In the case of our demo account here, we see that the “daily spend” allotment is:
$142.86 – $99.63 = $43.23

Truly Knowing What You Can Spend

While getting some financial perspective is great, if you really want to know if you if you can afford to buy the thing you’re staring at, you can add it as a Want or just have Claratii tell you if you can afford it now. I have the Can I Afford It Now? page as an icon on my phone’s home screen so I can very quickly know if I’m good or if I should wait. We wrote about the Can I Afford It Now feature a little while back.

A screen shot showing a portion of the Claratii home screen on a mobile device.

Posted in Blog, Managing Finances, Money Saving Tips, Personal Finance Tagged with: , , , , , , ,

Weekly and Monthly Views for Projections

A screen shot showing the weekly projections view

As requested by you, the users, we’re proud to release two new views of your projected balances: weekly and  monthly. You can find the links to these views for the normal Projections page.

Screen shot of the Projections page where an arrow points to the new navigation which links to the weekly and monthly projection views.

 

Both of these new views provide a helpful graph which shows the lowest balance per time period for the next 12 months. In the table, you’ll find useful information like what your lowest balance will be for the time period and the total income and expenses for that period. Any affordable Wants will also appear on that row.

A screen shot showing the weekly projections view

As always, the weekly and monthly views work great on your phone, too.

Individual incomes or expenses are not shown on these new views so if you need to work with them, they’re still in the daily projection view.

We value your feedback! Let us know by email or our feedback forum what you think of this new feature or anything else.

 

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Taking a Bite out of Food Spending: The Cash System

Pony asking "do I smell sugar?" sugar free diet

Pony asking "do I smell sugar?" sugar free dietToday is day 8 for our family steering away from sugar. That’s right, cake, cookies, brown sugar in oatmeal, ice cream and our jackpot of Christmas candy is out. The only exceptions are honey that can be used in a small amount in tea or oatmeal and, if desired, one square inch of dark chocolate. For a total of 30 days, we are floating this sugarless lifestyle challenge. I have even been recording the experience on a new little blog called “Sweeter Life with Less Sugar.

Managing food expenses

Health is something that has to be actively managed and sometimes adding a little gimmicky incentive can help keep goals on track. Not grabbing a cookie at a party or adding flavoring to a latte is a moment by moment challenge–do you see how I am tying this into managing finances? Food seems to be in a bitter fight to become one of our highest expenses and it was time to tame its almost out of control nature using the cash system.

“Keeping in mind your financial priorities, it’s time to create a plan for your savings and spending. Often the reason people hate budgets is because they’re too rigid to follow or time consuming to set up, but there are lots of different ways to create a budget, ranging from the zero-based budget that accounts for every penny and the classic envelope budget method of divvying cash in envelopes to using webapps like Mint for budgeting.” – How to Set Up and Streamline a Shared Budget by Melanie Pinola, LifeHacker 

The classic, “envelope budget” method is simply creating a budget, taking out that amount in cash and putting it in envelopes labeled with the spending category. Once the money is gone, it is gone until the re-set date. Simple? Well, maybe if you like math …

“The anticipation of doing math problems lights up pain networks in the brain for people with high levels of math anxiety, according to a new study.” – Math Anxiety & Pain by Megan Gannon, Huffington Post

Our first attempt at the cash system for our budget was a flop. I will happy testify to the pain factor which goes to tell me that sometimes going all out on a new plan is setting myself up for a sprint into a brick wall. Starting with something tough, but not impossible to achieve like removing sugar from our diets is easier to tackle. This time around trying out the envelope cash system, we focused just on food. Instead of physically placing money in their little envelope homes, we distributed the cash between the two of us. I somehow defaulted to getting the long straw as I go out more and tend to do the big shopping trips. We are going on a month of using this method of managing our wild food spending and, surprisingly enough, at the end of each week we have a good chunk of leftover cash.

Thinking this might be an interesting experiment for you to try? This is a good time to go visit Mint to see what your past average spending on food was.  Include restaurants, groceries, snacks, and of course coffee and break that down into weekly amounts. If you haven’t already add this expected weekly average into Claratii. Pick a re-set day for the week, ours is Saturday and go to the cash machine to start your experiment. My 30 day challenge to you is keep notes on how the experience goes.

Here are a few questions I would love to hear your feedback on:

  1. What does it feel like to hand over cash vs your debit card for food purchases?
  2. How do you handle purchasing household goods? (Separate transaction or do you pay in cash and reimburse yourself?)
  3. Have you used the enveloped system before and are trying it again?
  4. How have you used Claratii to make changes in the way you spend or plan?
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6 Easy on the Wallet Gifts for Kids

A few days ago other day, I realized that my daughter was 7 months old; time has never flown so fast! Our living room has turned into a kid’s crawling, exploring and chewing paradise. It’s filled with baby toys, stuffed animals, books, toys that make noise and more. However they are often short lived. Most of our daughter’s toys were handed down from her cousins and friends which is fine since most baby things are usable for such a short amount of time they were practically new when we got them.

When I get the itch to buy something for Clara, I steer clear of the big box stores and go straight to the consignment store. They have plenty of adorable, gently used clothes, excellent condition toys, books and even maternity and nursing clothes. Take the Bumbo, for example. Target has this squishy baby seat priced at $39, while I got one with the tray ($10 extra at Target) at Small Threads for $8. That’s a $41 savings, plus this Bumbo has already been passed around to four kids! That is $196 of value out of an $8 item. Unless you are picky about having new things for kids, consignment stores are by far my favorite place to find both used and new items at a wallet friendly price.

6 Gifts for Kids

1. Lifetime Favorites: While “enhanced” learning toys like the LeapFrog are neat, there is nothing quite like a book. From bedtime stories and independent reading, to long car rides, books are always in style, will always have built-in learning features and don’t require batteries. I have a few beautifully illustrated children’s books I still enjoy today, like Carl’s Christmas (around $14) and the Serendipity Book series ($5-10).

Not so ugly doll by Blue Heart Creations. Handmade ugly dolls available on ETSY2. Skip the Furby: While the idea of having a little fuzzy robot around the house sounds neat, enjoyment from a Furby (starting at $59) is going to last just about as long as getting your kids a Roomba ($299-$499). At least the Roomba will clean your house! Looking for a stuffed companion for a kid can be tough. I recommend heading over to Etsy and getting something handmade with love. Consider breaking out your needle and thread and creating a lovable little stuffed friend unique for your child to love for years to come.

“Every child is an artist. The problem is how to remain an artist once he grows up.”
― Pablo Picasso

3. Inner Picasso: Inspire creativity! Create an art supply kit fit for your young artists. Easter baskets are perfect for re-use as an art supply basket. With crayons, a few pencils, stickers and some paper, you will have one delighted kid. You might even find your gift coming back around to you in the form of an original art piece. $10 invested into a kit could easily give a kid years of artistic exploration. Depending on the kiddo’s age you could add in items you have around the house like solo buttons, beads and scraps of fabric.

4. Arts and Crafts you can EAT! One of the best skills a kid can learn is to cook. Find a kid-taste-bud friendly cookbook, add few ingredients from the book and you have a great gift that the whole family will enjoy.

5. Grow with me: This time of year you can find adorable baby evergreen trees. Find one that will thrive where the child lives whether planted in the yard or give it a generous pot to live in for easy transport.

6. Cardboard mansion: From rocket ship to dollhouse and fort large, cardboard boxes can be easily transformed into the best toy a kid could get. You can even wrap it and put items inside in which to transform an everyday box into an imagination station. One example is a clubhouse. Add items such as a couple of flashlights, blankets, silly joke books, and other kids-only items are long lasting fun. And the best thing about this kind of club house is that it can fold up and be stored away when not in use.

Make it easy on yourself with all of these gifts and add them to your Wants. That way you can prioritize, rearrange and make gift giving easy on your wallet and financial sanity.

 Wishing you and your family a wonderful Holiday season! 

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New Feature: Prioritization of Wants on mobile

A screen shot showing two wants with new prioritization buttons with up and down arrows

A screen shot showing two wants with new prioritization buttons with up and down arrows

If you use Claratii on your phone (which works great) then you get a little more love with this update. When you view your Wants, you’ll now see up and down buttons when you can use to adjust the priority of you Wants. Just like when you visit on your desktop or laptop, the dates update immediately after you make the change.

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Count Your Beans in a Crock Pot

Skimming Google News for personal finance articles can sometimes leave me a bit bummed out. While the economy learns how to walk again, we too must re-learn how to approach our personal finances. Both Eli and I believe education provides a foundation for financial sanity. Knowledge of how to manage finances can be found in many places: classrooms, books, blogs, seminars, experts, you name it–you can learn from it. The difference between reading a book about how to ride a horse and actually riding one is a tad different and experience and practice is key, just as it is with managing finances.

“The solution to our financial problems is not lending more money or making interest rates cheaper. The solution is found at the core, and that is the education of the next generations regarding personal finance.” – Ben Mulling, Huffington Post

There are fantastic financial advocates writing and reaching out to communities and providing ongoing free education. They speak from a place of financial enlightenment with a common forumla of less stuff equals less stress and more happiness. I recommend you bookmark all of these sites as well as add them to your morning reading routine.

I am going to skip past talking about avoiding revolving debt, reducing frivolous spending and balancing checkbooks. While those concepts are important chapters in learning about personal finance they are not easily adopted behaviors and are often seen as not applicable in daily lives. At least not in a way that creates an internal Jiminy Cricket voice that says “save,” “naw, let’s not use the credit card…,” and things like “today, let’s send in an extra credit card payment.”

Claratii was built with a different approach. Instead of financial tools shaking a finger at you saying “Hey… you spent a lot of money… tsk tsk,” Claratii looks into the future giving you a financial lighthouse keeping watch for dangers that may lay ahead. The icing on the cake is that Claratii tells the date when you can have the things you want, whether that is a new car to paying off debt.

The newest update is a quick snapshot of your incomes and expenses. Clearly see what are the big recurring hits to your wallet and what are things that might be easy to trim. Remembering that you can cut down on the quantity without cutting quality.

Bring on the Beans! Simple Real Life Tips to Managing Finances

“A quick search on “financial tips for college kids” left me with more of the stuff I already knew: don’t go crazy with credit. Limit how many loans you take on, particularly ones that accrue interest. Get an on-campus job. Don’t eat out every night.” – Kelly Dickinson, Buquad.com

Thanks Kelly, that was a perfect segway. I am going to jump on the idea of spending, specifically about food. Having a steady income felt a bit like opening Pandora’s box. Now, I could buy anythng that suited my tastebuds. Well, sort of. What happened recently is that we saw items being categorized as food in Mint increasing. When I starting working part time that needed to be reeled in.

Finally, I get back to the title of this post. First off, I am going to repeat myself: you can reduce the quantity you spend on food without reducing quality. Gourmet meals don’t need to drain the bank in order to fill your belly. If you are dreading giving up going out due to a lack of creativity in the kitchen then take comfort under the lid of a Crock Pot. Williams Sonoma The New Slow Cooker made me one wild hot meal cooking momma. Eli is willing to eat for days from left overs and I am proud to call them my creations. The result – gourmet flavors that reduce our food spending, improve our diets and provide excuses to invite the ‘rents and inlaws over.

The lesson is: catch yourself before you panic about the “right away” to manage your personal finances. Use Claratii as a guide, use Mint to learn about your spending habits and categorize purchases and practice practice practice. Little things like using a crock pot to make multiple tasty low-cost meals are real steps and experience points towards tackling other areas of managing finances.

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Could This Be the End Spending Guilt?

For those with school age kids the season of what I am calling stretch-spending comes early. School supplies, new clothes, school pictures and other random checks might make someone feel like an ATM machine. “Mom, I need $35 for ASB, and $40 for soccer, and … and … and”

I feel you… and THEN before Halloween costumed have been picked out Costco puts out it’s Christmas and holiday decorating supplies. Christmas?! Seriously, I feel for this Moms, and I am starting to understand why only a few have figured out how to brush their hair, get the kids dressed and get in and out of a store sane.

The good news folks that you can reduce your financial blood pressure by doing a little teeny tiny bit of work using Claratii. That’s right, you might be able to relax knowing that there is enough in the coffer for all the need-to-haves and a little left over for you know… you!

My hair dresser and I were talking about the universal get away to the grocery store. You know, the one where you get your significant other to agree to let you run off to the store alone while they manage the clones. In those moments you may find yourself having a wardrobe affair with the most amazing blouse.  Most likely it has an umpire waist, beautiful embroidered neckline with a color that will flatter your now paling skin and possibly brushed hair.

Avoid Spending Guilt

If I am face to face with an item that is tugging on my heart strings I have a few choices:

A. Place item in cart and try and tell myself a story about how the item was lost and needed a home.

B. Walk away from the item assuming I can’t afford it

OR C. Use Claratii to see if I can “Afford it now”

I am going to go with option C. While the below photo is a screenshot from my iPhone, you can create a bookmark to your Claratii account using any internet enabled phone.

Oh tip! I love to share tips! When setting up your Claratii bookmark on your phone. Login to your account then navigate to the “Can I Afford it Now”, use your phone’s browser bookmark system to bookmark this page. Then from then on out you will stay logged in and only one click away from using the “Can I Afford it Now” feature. Here is what mine looks like (switching to part time makes my available wants go away).

So, now it’s you and that blouse. A quick click into your Claratii account, add a want to the “Can I Afford it Now” section and BAM you can see if you could or shouldn’t add that adorable new shirt to your collection. If it comes up to be that today’s just not the right time Claratii will tell you which day you can get it!

Ta da! The end of having to feel unsure and maybe even guilty about something. You can keep yourself in the loop with your family finances and keep your wants neatly organized too.

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Simple Money Savings Tips

Four years ago Eli and I jumped into buying our first home. Four miles from town and less than 15 minutes from a Costco. I distinctly remember our neighbor saying, “buying a home is going to be a stretch”. I finally after four years figured out he didn’t mean just the mortgage.

Our version of the nuclear family model somehow traded a house in a colcasac with a mini ranch and a handful of farm animals. Eli has talked about how we use Mint to look into the past, categorize purchases and find trends in our spending. However, it wasn’t until Claratii that we got to see how our future finances were going based on our past spending and saving behaviors. Our daughter is turning five months old, I am taking a more part time role at BizeeBee and so cutting cost without quality on many things was my new challenge but I had the data and here is what I learned.

Easy Money Saving Tips

Cut Quantity not Quality:

We have a very generous food budget in Claratii, counting for up to $330.00 per week! We tend to skip processed foods, snacks and treats but buy high quality meats, and organic produce however we also eat out more than we should. We are now stretching our meat purchases by cutting our portions down by half. Instead of a chicken breast each, we split on. Filling the rest of our plate up with greens. Healthy for our budget and our waistlines!

Reuse Gift Supplies

Holidays, my baby shower and birthdays all came with some very kind and thoughtful gifts. If the wrapping and gift bags are salvageable I kept them. Gift bags can run $2-$8 a piece and tissue starts at $2. That could be up to $10 I am saving plus maybe even a tree or two by reusing gift supplies. The idea of using different types of containers for gifts is also fun. Thrift stores and garage sales are often easy places to find inexpensive but neat containers that can be reused. Think beyond those Santa Claus tins as just cookie packaging!

Home Improvement

I am still very much a novice at home improvement projects. However I have learned a few things recently. You can do improvement projects in stages. We set aside a chunk of cash to have our windows replaced. We bought the windows ourselves and paid my very talented contractor step Dad to install them. We got a few bids to have them replaced and installed by a couple of window companies as well as Home Depot. The estimates ranged from $15k to $6k. By buying the windows ourselves and having an independent contractor install them we will have the project completed for around $4k. What happened to those old double pane aluminum windows? We posted on Craigslist and got a flood of replies more than happy to take them off our hands.

Almost New Hotness

New gadgets are great however their upfront cost is a hit to any budget. Wait for a little while and deals spring up! The new iPhone just came out and if you are out of contract and willing to sign one you can have the iPhone5 for $199.00 (just the phone price). Which means the iPhone4s is now only $99 a great deal for someone looking for a speedy Apple product and with a simple upgrade to iOS6 it will have almost every feature of the new shiny budget busting handheld computer.

Downsize from Venti

Long work days turn into long evenings of catchup. I admit letting caffeine  more specifically Starbucks back into my daily routine. One for a focus booster and two for a way to get out of the house and see real 3D people. I see my coffee indulgence as a luxury so downsizing to smaller sized cups doesn’t mean I am taking away my need to get out or get a boost of energy just a few ounces and a handful of money that adds up overtime.

“If you buy one $4 latte each day, that coffee habit will set you back $28 a week, about $120 a month and $1,460 per year. Keep that up for five years, and you’ve slurped away $7,300” – CBS News

Picking just a couple of money saving tactics to add to your long term healthy financial strategy is a great way to keep on track with goals. Happy financial sanity!

 

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