Wednesday, June 29, 2011

budget lessons

As the countdown continues to Minnesota government shutting down on July 1st, because our leaders can't agree on a budget, it happens to coincide with Mike and I teaching Charlie about his own personal budget.

This summer, we have opened a Paypal Student Account for him.  We give him a monthly allowance, more than he used to get, because now he is in charge of spending his own money.  If he wants to join his friends at a movie, or get his haircut, buy a new pair of shoes, or a video game, it needs to come from his account.  He has the opportunity to earn extra money, by doing additional chores (he already edged all of our sidewalks) or working for us doing ACES related jobs.

I think 13 is a good age to learn about needs versus wants, and working hard if you want more.

If only our government had learned some of these key budget notions:

1.  If you have $100 in your account, and you want to buy something that costs $150, you can't just ask your 'wealthy' parents for more.  (Well of course you can ask, but don't assume just by asking that we will agree-unless it is warranted.) Because next time it won't be $50, it will be more, because it has now been established that there is no ceiling on asking.  But you are welcome to find an extra job you can do to make more money, or figure out how to live within your means.

2.  If you currently get $100 a month, and you ask for an increase to $150, and we decide to give you $120-we HAVE NOT CUT YOUR BUDGET.  You didn't get what you asked for, but it's not a CUT.  If get $100 a month, and we decide to drop it to $80, now THAT would be a cut.  (Having worked on many a budget in my former life at Target and the fabric store I ran, I happen to know that you ALWAYS ask for more than you think you are going to get.  But it shouldn't be considered a reduction unless you are actually going to receive less money than you are currently receiving. )

3.  Be creative in your budgeting, and learn to cut costs where you can.  Don't assume that your first choice is always the best choice-do some research and shop around to see where you can find savings.

4.  Do you really need a $90 pair of shoes?  Is there a pair for $60 that you can like just as well?  (And can you get it through Ebates and is there a coupon available?)  That $30 you saved can go for something else.

5.  Always save for the unexpected.  You never know what tomorrow will bring.

The difference between Charlie's allowance and the money we send to our state government is he EARNS his money.  He works hard for it.  The money we send to our government is money WE have earned, that we expect them to use wisely, but they should never feel they are entitled to it, to support their agendas.

Now I am off to get my fishing license, before the government shuts down on Friday, because these simple budget lessons appear to be very hard for our state to grasp.

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