Money Crashers » Kids and Money

Help A Reader: Having A Baby And Looking For A Job Change

Erik Folgate — Wed, 23 Sep 2009 19:43:54 +0000

A question from one of our most loyal Money Crashers fans!

I have a question for you concerning searching for a job. I found out that I will not be able to keep my current job after we have the baby. I am not willing to work full time, and they are unwilling to let me work part-time. My question is two-fold. Do you have any recommendations for searching for a part-time job (preferably work from home)? Also, if I want to start the job in June, when is a good time to start looking?

I know there are many other women in your position, and while being a mother is definitely a full-time job, many families are having a hard time living on one income. The first thing you need to do is answer this question: “Do I want to work towards a career that I love, or do I want to make extra money while I am raising kids?”

How you answer that question determines how I would answer your original question. So, if you are looking for a career change, then this is the route that I would take:

Write down 5 to 10 different things you really enjoy doing, like a hobby or activity that you find yourself spending a lot of time or thinking about when you aren’t working.
Then, write down 3 different ways you could turn that activity or hobby into a way to make money.
Circle the top three of those ideas and start researching the costs, resources, and supplies you would need to turn that into a side business. Pick ideas with low start-up costs and offer flexibility.

You have about 5 months to do the research and planning it would take to start a side business doing something that you really enjoy. People get scared of the idea of actually starting a business or they think it’s too hard, but if you get serious about an idea and do some planning for it, you can easily start making part-time income in the first few months.

If you just want to make some extra money and you don’t care what you are doing to make it, then here are a few suggestions:

Do consulting. Whatever your current job is, research to see if there is a market for consulting or independent work. Many companies can save money by paying a consultant to do part-time work for an hourly fee, rather than hiring on a new employee that they will provide benefits and salary to.
Become a virtual assistant. A lot of small businesses are outsourcing their personal assistants and secretaries to virtual assistants. This is a legitimate work-at-home job, and it typically has flexible hours.
Become a nanny. Instead of going to them, have them come to you. Seek out one or two working mothers who need child care, and ask to provide day care for their child while you take care of your own baby. You could easily charge $600 per month for each baby. Obviously, you would not be able to take on more than one or two, because you don’t want to become a full-fledged day care. There are a lot of legal issues that go along with that.

To answer your last question, I would take the entire fall narrowing down what you want to look for or develop as a side business, and then hit the trail hard starting January 2nd, 2010. I have found through personal experience that many companies are pre-occupied with the holidays, rather than looking to hire new employees. But, my suggestion is to develop a side business that you can run out of your home with little start-up cost.

Readers, please comment below with your suggestions and ideas to help her out!

5 Ways To Save Money On Back-To-School Supplies

Erik Folgate — Fri, 14 Aug 2009 17:23:53 +0000

It’s that time of year that parents dread, especially those with more than one school-bound children. The average family will spend about $600 on back-to-school supplies and other items needed to send their children back. Doesn’t that sound a little high? That’s a significant hit for families living from paycheck to paycheck. Now throw in the faltering economy and high unemployment, and you have a bad situation! I have always been an advocate of making a bad situation into a good one, and one way to make this time better is by finding ways to save money on yur back-to-school supplies.

Don’t follow the list strictly. So many parents blindly follow the school supplies list without questioning whether they will really use those supplies. I remember in grade school having stuff that my mom bought me that I might have used once or twice, and it wasn’t even in the beginning of the year. Do some critical thinking, ask your child if they actually use the item in school, and make an executive decision.
Do not over-buy. Schools have most likely over-estimated the supplies they need, so don’t fall into the trap of buying too much supplies.
Recycle old supplies. It’s too late to say, “remember to keep your kid’s old supplies from the previous year”, but keep it in mind for next year. Things like hole punchers, staplers, and hardcover binders are easy to save and use for next year.
Buy in bulk. Only do this if you have two or more kids in school. Use wholesale centers like Costco and Sam’s to find binders, folders, pens, and crayons in bulk.
Don’t bring your kids with you, if possible. Even with school supplies, their eyes get big, and they act like they need everything and the best of everything. Kids are very brand conscious, but they rarely care what brand they are using after a couple of weeks of school.

Play a game with yourself and see how much money you can save this back-to-school season. I know it’s possible, and you know it’s possible, but it takes some extra work to save money. Saving money is a lifestyle, and when you continually repeat the process of saving money, it starts to become second nature.

Kids and Money: The Teenage Years

Erik Folgate — Fri, 22 Aug 2008 01:38:12 +0000

This week we’ve been talking about kids and money. Don’t gloss over these articles, even if you don’t have kids, because you most likely will someday. Lack of financial education is the number one reason why we have so much credit card debt and outrageous foreclosure statistics as a nation. We don’t receive financial education as young children, as teenagers, or as college students. Schools figure that parents will teach their kids how to handle money, but the the problem is that many parents don’t know how to handle their own money. Parents figure that schools will teach kids how to handle money. So, there’s an obvious deficiet of financial education in our country, and the only organizations that do give out free financial education are credit card companies. Can you guess how they teach how to handle money? It starts and ends with a lot of plastic.

Teenagers are money hungry. They LOVE money, but they love DOING stuff that costs money even more. They’ll milk you for everything you’ve got if you aren’t careful. Here are four tips to help teenagers learn to handle money. If your children have not learned the concept of working to get more money, then this is the last chance you have to help learn about working hard to make money.

Cash is King. I recommend not introducing plastic of any kind to teenagers, because they will immediatley start associating payinth plg for things with plastic. They’ll never experience the feeling of handing over their money to buy something they want or need. When you pay with plastic, whether its a debit card or a credit card, the experience numbs you to what it really feels like to pay with cash. Obviously, don’t let your kid walk around with a wad of cash like a drug dealer, but getting them a debit card could be detrimental to helping them learn the value of a dollar.
Tell Them to Get a Job. Your teenagers want much more than they did two or three years ago. Not only do they want new clothes and new electronics, but they want to go out and have fun. They’re going to concerts, sporting events, and buying gifts for their friends. This comes at a premium price. If they want to do all of these things, they need to go and get a job. They can work 20 hours, do well in school, AND make enough money to support all of his or her entertainment desires. Driving and owning a car is another huge expense that should not be completely funded by the parent. If you want to pay for the insurance, that’s cool, but paying for their gas is a little overboard. If they want to drive all over the city, then they should pay for that luxury.
Teach Them About Entrepreneurship. Once your teenager has shown interest in getting a job to make some extra money, introduce to them the concept of starting their own business to make extra money. Explai to them the benefits of owning a business such as schedule flexibility and limitless income. This will excite them, but give the good with the bad. Before they start their own business, explain to them that it’s a huge commitment and responsibility. Lawn care, selling crafts online, baby sitting, professionally organizing homes and garages, and computer technical support are all businesses that teenagers can start and make a great deal of money doing it.
Teach Them To Be Givers. Teenagers start grasping the notion of doing good in society, and they often embrace the role of giving and doing good to others. If you can teach your child to be a strong giver in their adult years, you will help them develop a personality trait that they will cherish forever. Encourage your children to tithe their income if you are Christians and/or help them pick a charity to start giving to on a regular basis.

For those of you with teenagers, good luck. I was one myself just 8 years ago. I wish that my parents would have taught me to be an entrepreneur earlier in life and to stay away from credit cards. It took until my senior year of college to figure out how to handle money, so start early with your teenager. You’ll save them thousands of dollars in college and their early adult life.

Teach Your Pre-Teen To Save Money

Erik Folgate — Wed, 20 Aug 2008 03:36:13 +0000

Yesterday, I discussed the importance of teaching your young children to manage a set amount of money that you give them for extra jobs around the house. Today, I’ll talk about helping your pre-teen learn how to save money. From ages 8 to 12, these youngsters know how money works, but they have no concept of saving it. You can teach them to save by helping them open a savings account. Online savings accounts are the best out there, but they can’t open checking accounts yet, so you’ll have to go with a traditional savings account. The interest rates are horrible, but that’s not the point. The point is to help your child learn how to save on a consistent basis.

Open Up a Savings Account

Make it an entire event with you and your child. Go to the bank together, open up the account, and bring whatever money he or she can scrape together to put in the account. Then, go out to lunch or dinner to celebrate the start of their saving career!

Write Down Savings Goals

Sit down with your child and write down a few things that they would like to save up to buy. They will probably only think of items they want in the near future, but help them think about the bigger picture like a car and college.

Match Their Savings

If your child decides he or she wants to save up for a car or another large purchase, tell them that you’ll match their savings dollar for dollar if they are really serious about saving money. You’ll see how quickly determined they get. Doing this also helps them understand the concept and importance of taking advantage of a free match from a 401k later on in life.

Saving money is a habit that we develop, and parents are the most important people to help children learn sound financial principles. Help them learn how to save money now, and they’ll be millionaires in their fifties.

When Should You Start Giving Your Child An Allowance?

Erik Folgate — Tue, 19 Aug 2008 04:01:11 +0000

The time will soon come when your child discovers money and wants to do things that cost money. The age that this happens varies by each child, but generally children start getting an itch to buy things with their own money around 6 or 7 years old. At this age, they won’t go out and start their own business to make money, but you can give them an allowance based on extra jobs they do around the house, not their weekly chores as a member of the household.

Difference between Weekly Chores vs. Extra Jobs For Allowance

I don’t think kids should get paid to do things that they should already be doing as part of the household such as taking out the trash, cleaning their room, and doing the dishes. But, they can do extra jobs like yard work, cleaning the car, or organizing the garage.

How Much Should You Give them?

You can either give them an amount equal to their age or an amount equal to half of their age, whatever you see fit for your child. At 6 to 8 years old, they just need enough money to pay for a candy bar or a small toy.

What This Does For Your Child

It gets them managing money at a very young age. Help them undertand the concept of getting paid for performance and paying cash for items they want to buy, and you’ll instill good financial habits in them at a young age. Related Posts:

When Should You Start Giving Your Child An Allowance? is a post from: Money Crashers

10 Tips For Saving Money On Back-To-School Shopping

Erik Folgate — Wed, 06 Aug 2008 04:14:44 +0000

The average consumer spends $500 every year just on back-to-school supplies. This doesn’t even cover clothing. If you have three kids, you could easily spend $2,000 every August on back-to-school shopping. But, for every shopping nightmare, there’s a way to save money. In fact, I’ll give you 10 tips for how to save money this school season.

Shop at discount stores such as Marshalls and TJ Maxx for your children that are brand conscious. These stores carry many of the hottest brands at a much cheaper price.
Buy in bulk. If you have multiple children at similar ages, use it to your advantage. Buy in bulk to save on bulk rate prices.
Check online for discounts. You can often get better deals on items such as graphing calculators, shoes, and books by checking big online retailers such as newegg.com, amazon.com, and buy.com.
Don’t take your kids with you to shop. You’ll probably need to take them with for clothing, but don’t take them with when buying school supplies. They’ll have you buying supplies that they don’t need, and they always think that generic brands are dumb.
Stick to Wal-Mart and Target for supplies. Drug stores and other smaller retailers are still a rip-off. I’m a big supporter of small business, but not in this instance. They can’t compete with companies like Target on Wal-Mart in price, and the price of food and gas is making it tougher every day on the budget.
For younger children, try to contact the teacher directly for a list of supplies. I’m sure that many of you have followeed the check list for your 2nd grade child to the tee only to find that they use half of the stuff that you bought. Sometimes, the teachers don’t make those lists. If you’re able to get a hold of them directly, they’ll know exactly what your child will and will not use for the upcoming school year.
Take your teenager to high-end consignment shop. Stores such as Plato’s Closet and Buffalo Exchange carry some of the hottest brands with the latest styles at a fraction of the cost of new clothes. I know what you’re thinking. You work too hard to be buying your kid used clothing. But seriously, check the store out before you stick your nose up at it. They only accept clothing in pristine condition.
For older children, set a budget for their clothing. Give them a certain amount such as $100 or $200, and let them pick everything out. You’ll be very surpised at how far they can stretch a dollar when they know how much they can spend. If you don’t set a dollar amount, they’ll treat you like a bottomless money pit.
Use hand-me-downs from previous years. Remember to keep items such as pencil sharpeners, hole punchers, lunch boxes, back packs, and other reusable items for younger children to use.
Search Craigslist for higher priced items. People aren’t dumb when it comes to selling stuff in the classifieds. Craigslist is the biggest and most famous online classified on the internet. If there is a high-priced item that your child needs for school such as a calculator, check Craigslist first.

Don’t settle for getting ripped off from retailers this year. They’re biggest ploy is to make you feel like you’re getting all of these deals, when in reality, you’re spending much more money than you should have spent. Retailers live for this time of year. Don’t let them win.

Kids And Money: Teaching Your Kids Not To Borrow Money

Erik Folgate — Sat, 28 Jun 2008 04:30:01 +0000

For those of you that like to borrow money to the point that it comes out of your eyeballs, you might not want to listen to this advice. But, for those of you that are fed up with owing money to everyone for everything, and you don’t want to put your kids through the same agony that you’ve gone through, this is the article for you. The problem is that our nation is indoctrinated to think that borrowing money for everything is a way of life. Swiping the credit card has been woven into the fabric of our society, and now children are learning how to borrow at a very young age. So, the cycle will continue unless parents start teaching their children something different. Don’t count on the schools to do this for you. Most of them don’t even have a personal finance cirriculum, and if they do, it’s probably sponsored by a credit card company. Here are some tips for how to teach your children not to borrow money.

Teach Older Children To Save With The Pay for Performance Method

Teaching a child the value of saving money on a recurring basis is a lesson they will thank you for the rest of their life. When they ask for a new toy or to go on a certain class trip or trip with a friend, that is the perfect opportunity to teach them to save. Write down a savings plan on paper or on the computer with them so they can have a goal for how much they need to save each week or each month to reach their goal. Then, brainstorm for ideas about how to earn that money. This is best for middle school and high school aged children. Put in writing which chores they can do around the house that will earn them extra money, and define which chores they must do just for being a resident of the house. For instance, they shouldn’t get money just for cleaning their room. But, you can pay them for mowing the lawn, helping you paint a room, cleaning out the gutters, organizing the garage, or any other out-of-the-ordinary chore around the house.

Make Saving Fun With Young Children

You need to capture the minds of young children. Saving money does not sound fun during that initial conversation with your young child. Make a project out of it by picking a piggy bank or jar to decorate with him or her. Then, explain to them that you will give them a 100% match for every dollar they save. Making their savings bank look cool and giving them an incentive to save can help your 7 or 8 year old want to save their money.

Don’t give a teenager a credit card.

Many people give their teen daughter or son a credit card for emergencies, especially when they first start driving. Please don’t do this. They will begin to see how easy it is to swipe that card, and they never get to see the bill. If you want them to have something for emergencies, get a prepaid debit card that you can load money onto and have them carry that. Besides, if you really want them to learn sound financial principles, explain to them the importance of having an emergency fund.

Give them a less on interest.

There is interest that works highly in your favor and interest that works highly AGAINST your favor. Show your children the difference between savings interest and debt interest. I guarantee that if they grab this at a young age, they’ll never want to borrow a dime in their life!

There are many other methods, but these are just a few. The best thing that you can do for a young person is teach them about money and how to live a life debt free. If your child gets out of college without any debt, he or she will start their professional life with a tremendous advantage over the young people who come out of college with $50,000 in debt from student loans and credit cards. Do them a favor and teach them not to borrow money.

How To Help College Graduates with Money and Career

Erik Folgate — Thu, 15 May 2008 00:22:56 +0000

I have a heart for recent college graduates. I was there 3 years ago. I didn’t know how to get a job, I didn’t know how to manage my money. I didn’t know how to deal with getting up early, interacting with people twice my age. It’s tough to be a recent graduate. Your college hands you a degree and pushes you out the door. Your parents have already pushed you out of the door. Their guidance is there, but not as much as in high school.

Jante Bodner wrote a post on Kiplinger’s online about ways parents can help graduates with their career and their money. These are also ways that they can help themselves when coming out of college and into the jungle we call, “the real world”.

Be judicious in helping your kids look for a job.

Pay for their health insurance.

Pass on your family’s values.

Don’t tap retirement assets to help the kids.

Have faith in your offspring.

Coming from someone who remembers those days clearly, the health insurance would have been nice. I paid for major medical insurance out of my pocket, but if someone really major would have happened, I would have still had a hefty bill to cover. Students walking around without health insurance is such a scary thing. It can literally ruin their financial life before they start it if they have a major medical emergency without health insurance. I also like the point about passing on your family’s values. Even if your kid acts like he or she isn’t listening, let them know how you feel about money and pursuing a career. But more importantly, teach them the values that make someone a great person in society. In terms of finance, make sure you let them know that when they are blessed with money, give back to their community. I also agree that you should not break your own bank to help out your children. If you can’t afford their tuition, don’t tap into retirement to pay for it. If you can’t help them get off their feet after college, don’t go into debt to do it. So many parents feel obligated to help because it’s their children. If you have the abundance and means to do it, then by all means, go ahead. But, don’t screw up your own financial situation to help them. They will be fine, and they will learn more about life, money, and their career by figuring some of it out on their own. Create a balance between being supportive without smothering them.

Four Tips On the Issue of Money and Family

Erik Folgate — Tue, 05 Feb 2008 20:51:57 +0000

When I was in college, my first car had finally broken down. I needed another car, but I didn’t have any money to get another one. I didn’t want to go to a bank to get a loan for a car, because I was didn’t want to pay all of the interest and I didn’t want the possibility of it getting repossessed if I could not make the payment. After several discussions with my dad, he agreed to pay for the car and I would pay him a set amount each month until the loan was either paid off, or he felt that I had paid enough towards it for him to give me the title. I didn’t have to pay any interest, and if I was a few days late, I wouldn’t be penalized. It seemed like a sweet deal at the time, but once I started driving that car and paying payments to my dad, it just didn’t seem right. He wasn’t a jerk about it, and he didn’t hold it over my head, but I didn’t like the idea of owing my dad money. I thought to myself, “My family shouldn’t feel like my bank.” At some point in your life, your money and your family will mix together. You may not want it to, but it will. However, you can choose how you deal with money when it comes to you and your immediate and extended family. Borrowing money, lending money, and starting business from family can be very alluring, because you are close to that person and you feel like you can trust them. I understand why families borrow money from each and start businesses together, but I am going to give you a few reasons why you should not do it and how to avoid it.

Don’t Borrow Money From Your Family. I have adopted a rule to never borrow money from my family. Granted, I know there may be dire situations when you are going to lose your house, have a medical emergency, or some other tragedy occurs where borrowing from your family might seem like the only option. If they are your last resort and the situation is life or death, then borrow from your family. But generally speaking, I don’t think it’s a good idea to use your family as your bank. You shouldn’t have to sit at the Thanksgiving table wondering if your parents, brother, sister, uncle, or grandparent is wondering when you are going to pay them back. It’s a horrible feeling. The best way to enjoy your family is by keeping your borrowing habits to yourself. Lord knows that most families have enough issues and money would just complicate them even more.
Don’t Lend Money To Your Family. This is the same concept as above. If you’re not going to borrow it from your family, you shouldn’t lend it to your family, either! Dave Ramsey likes to quote a famous proverb in the Bible that says “the borrower is slave to the lender”, and it is so true. Do you really want your family member to feel like they are a slave to you? Well, I know some of you wouldn’t mind your in-laws feeling that way, but you know what I’m saying.
Give Money To Your Family. I’m not a cold-hearted person, so if your brother, parent, or other family member really needs some financial help to get out of a bad situation, my suggestion would be to just give them the money, no strings attached. You’ll show them a lot more love by just giving it to them rather than “loaning” them the money. Watch out for enabling that family member, though. If you know the family member habitually gets into bad situations, makes bad situations, or has an addiction, don’t keep shelling out money to them. The worst thing that you can do for a family member is continue to enable their bad habits and decisions. But, if your sister just went through a divorce and she needs help with her rent/mortgage payment just one time, go ahead and give her the money rather than loaning it to her.
Give Financial Advice With a Loving Approach. You may have a family member that is completely screwing up their finances, and you don’t want them to keep falling into the same financial traps. If it’s your parents, they may never listen to you about money, because they don’t want to hear advice or criticism from their children that they raised. If it’s your sibling, cousin, or any other family member, the best way to approach them is with a loving and empathetic attitude. If you attack them and tell them how much they’re screwing up, you’ll never get anywhere with them. They’ll shut down, and you won’t get anywhere. Start the conversation by telling them a story about how you were not on the right path with money but how you turned it around. Show them that you were in their shoes a few years back. If you take this approach and show them that you genuinely care, rather than come down on them, they’ll be more susceptible to your advice.

Family and money just don’t mix. If you mix them, you’ll have quite a sticky situation on your hands. Consider these four tips when it comes to money and family. If you’re on the right track with your finances, you can be a light to your family members who are running their finances into the ground, but lead by example first. They will appreciate you much more for it, rather than spouting off at them at every family reunion. Related Posts:

Four Tips On the Issue of Money and Family is a post from: Money Crashers

Is it Worth it for Your Spouse To Go Back To Work?

Erik Folgate — Sun, 14 Oct 2007 03:25:05 +0000

Whether it’s the man or the woman that stays home with the kids during their early months or years, it’s always a good practice to see whether or not it is worth it for that spouse to go back to work after having kids.

This article from Free Money Finance reveals a comment of one of his readers that shows how they ran the numbers, and it really wasn’t worth it for the spouse to go back to work.

Things to Consider:

Will you have to pay child care if both parents are at work? If the grandparents or other family members are willing to watch them during the day, it may be worth it to go back to work. If not, child day care is VERY expensive.
How much will you make? If your spouse left a high-paying career, then it probably is worth it for them to go back to work, but if they are just looking for extra work with hourly pay, then you need to closely consider the opportunity and economic costs of getting a job.
Do you want your kids in day care every day? Sometimes it’s hard knowing that you both see your kids for only a few hours during the day. Evaluate how you will take advantage of that limited time during the week if you are both working.

My wife and I will probably both end up working while we raise our kids, but that is because we’ll both be pursuing careers that we love. Just like I said “don’t buy a house just to buy a house”. Well, don’t go to work, just to go to work! Make sure that your brining in enough income after factoring in the cost of day care, gas, and less home cooked meals. Related Posts:

Is it Worth it for Your Spouse To Go Back To Work? is a post from: Money Crashers