I started with the idea - “Teach kids about money” in particular - my kids. I want them to have a different mindset about how to make money and how money works than what I grew up with. Making money is easy to those in the know - that’s why we the middle class and the poor blame the rich for our woes - because they know about making money and we don’t. I want to teach my kids about money because I want them to have more in life [ not just money and material things - but freedom ]. You know the freedom that comes from owning your own business or having money work for you instead of you going to work 60 hours or more a week.
I realized that thou I wanted to teach my kids the value of a dollar and that money doesn’t grow on trees they would have to work for it… [ Value of a Dollar ] I ran across a two fold problem. First: I work and for years I was financially “stupid” instead of wise. Second, you can’t fix a problem until you know what the problem is…. So in order to make money you need to know how to create a budget and stick to it.
Making money and a Budget
Anyone who has a check book knows about trying to make a dollar stretch - there is always too much month left and not enough cash. In order to teach my kids about money I need to fix some of my finances - I need to create a budget. Why?
[ The secret is:
“Mind your own Business.”
Financial struggle is often directly the result of people working all their life for someone else. Many people will have nothing at the end of their working days ]
Rich Dad, Poor Dad:
by Robert T. KiyosakiA budget is like a map - it tells you where your going and how you are doing.. and like Robert said in the book, mind your own business! Creating a budget also [ my opinion ] helps you realize that your financial woes are your own Fault. You can blame it on the Rich, the government or your spouse - it’s of your own making. You put yourself in that financial mess and you keep yourself there .
Teaching kids about money [ my kids ] means I have to teach them about a budget. After all, for years I’ve worked and spent my money and gotten no where. A budget will show you where and how you spend your money - it will also help you save money. That is if you are serious about it.
So creating a Budget to make money I go?
All good financial books have a subject about saving and making a budget. Each book I’ve ever read says one thing - in order to save and budget, you have to accurately track your expenses. They all say take one entire month and track [ write down ] every expense you make. At the end of the month you sit down and categorize all the expenses and therefore you should be able to see where your money is going..
I have two problems with that.
One: My spouse is terrible at spending and couldn’t save a dime if life depended on it.
Two: I’m terrible at writing things down.
So I came up with a way to cheat but get same results. I simply paid everything with my ATM debit card. Every other day I sat at my computer and wrote down all the entries into my check registrar. It made it easy for me plus hey no records to lose.
Tip: Married / couples who share financial burden need to work together to make this work.
In my case my spouse is terrible at saving money so we came up with an arrangement both of us can live with. I would be in complete control of the finances and the paying of bills and my spouse would receive $75 to $100 every pay period to spend in any way so desired. There are no strings attached on how my spouse spends that money - except that once that money is gone - can’t come back for more…..Tip: here’s a cheat for a single person - if you use your credit card or debit card to pay 95% of your expenses and purchases [ and don’t want to wait a month ] just use last month bank statement to see what and where you spend your money.
How a budget can help you make money
A budget can help you make money in two simple ways.
One: the obvious, you realize you need more money [ income]
Two: It reveals to you how you spend your money and forces you to realize you need to be responsible with your finances.
I’ve been married 17 years [ as of this post ] and my spouse always said “ Don’t worry, I get paid next week.” It’s been 17 years and we are no better of than we were when we started - scratch that - we’re worst! Two kids, mortgage, no savings or retirement fund and still living pay check to pay check…..
Quick look at my finances - income verses expenses.
I realized I can’t do this alone, this is going to take the work of the whole family. My decision to teach my kids about money means I have to start by improving my financial situation and while they will have to learn as they watch Mom and Dad fix their financial woes… their first lesson can be this:
“Life is full of choices. In order to reach your goal you have to make sacrifices.”
In creating my budget I am going to have to factor in how I’m going to pay my children - teaching them the value of a dollar means they have to earn money…. That money has to come from somewhere right…
Rich Dad Poor Dad
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