Archive for the ‘Frugal’ Category

College Rules…Work for Your Fun

April 10, 2009

It’s no secret that the costs of college rise every year.  As your child nears college age it’s important to look at what you can offer your child in the way of assistance.  My premise is that the college experience should be a partnership between parent and child.  While nobody will argue that fun should be a part of their experience, it’s not unfair to ask your child to fund some of their own fun.  It’s important that they be a part of this decision.  Below are some possible solutions to funding your child’s “fun.”

Matching Funds. For every dollar he/she raises you will match it dollar for dollar.  You could also use a ratio (3:1, 2:1).  This matched money goes into an account set aside solely for college fun expenses.  You might consider setting a time limit on this.  Example: Every dollar you give me for the next 3 months I will match it.  You’re not only helping them fund a college expense but instilling responsibility as well.

Match up to a specific dollar amount.  Your budget may not permit you to do a match for every dollar earned.  You may need to set a cap on the amount that you match.  Once your child meets that cap, the rest of the money raised is unmatched.

Summer College Stimulus.  This is an example of the time frame listed above.  Your current/future college student can receive matching funds for any money given to you for the summer.

Set Parameters on What You Supply.  Let your college student know how much fun money you will supply.  You must remain firm on this issue. Remaining firm will teach your young adult child discipline and responsibility.  You will also need to tell him that you’re willing to discuss ’emergency’ events to determine if additional help is needed.

The decision to fund your child’s college fun is an important one.  How much help you provide should be based on your specific financial situation.  You need to understand that your child’s involvement in the solution can promote responsibility.  Involving your child in raising some of these funds just might teach them lessons they won’t get from a book.

Wants vs. Needs

February 9, 2009

We  have a lot of choices about what we do with our money.  How much of what you buy every week is a need?  How much is a want?  What about your credit card purchases? What return value are you getting on these items?  In looking back over the choices that you made with money this past month did those choices benefit you long term?  We all have 3 basic needs: Food, Clothing, Shelter.  Transportation is probably a close 4th.  Let’s look at the number of choices you have in these 3 areas.

Food – What do you spend on groceries every month? Do you shop for bargains? Do you keep a sharp eye for items on sale?  Do you use coupons? While food is a basic need, there are many ways to shop wisely and keep costs down.  What do you spend a month on Eating Out?  Is this a need or a want? I say want.  How much money could you save if you only ate out 1/2 as much as you do now?

Clothing – There are lots of choices in regards to clothing.  Does what you buy have to be new? Consignment sales and yard sales can offer slightly used, good clothing at much lower prices.  My two brothers and I spent most of our early years in garage sale clothes and we don’t have any negative repercussions.  You can also get good sales as clothes are going out of season if you keep your eyes open.

Shelter – We all need a place to protect us from the elements.  As I write this my wife and I are building our first home.  The costs of this are coming apparent as we approach the last 6 weeks of this process.  We do want to stay ‘in budget.’  There are lots of choices inthe amount you can spend on your home.  Look at appliances.  TV, Refrigerator, Dishwasher, Oven, Computers, Sound systems. The list could go on.  Before you replace that next appliance, ask yourself, “Is there anything wrong with the one I have?”  “Can I repair it cheaper than buying a new one?” “Can I pay cash for the new one?”  “Can I find a good one that is slightly used?” Can you say, Craigslist? 

We all have lots of choices in how we buy the things we need and want.  If you find yourself cash strapped and stretched with your money, it could be time for you to address needs vs. wants.  Distinguishing a need from a want is a valuable skill if you want to move ahead financially.