Teaching Kids to Grocery Shop

By Angela on October 18, 2015

Yesterday I had so much fun with my kids that I completely forgot about the 31 day challenge. We cleaned house, went to a birthday party, had a friend over for dinner and games and then hosted the church youth group for a movie night and snacks. It’s the kind of day that you wish every day was like, and the best part—my house is still clean <3.

I may write an extra post at the end, but I’m not going to stress about it. Instead, I’ll jump right into this week’s theme — “Teaching kids to understand what things cost” starting with food.

This whole parenting thing is about getting the kids ready to do life without us. One of the most important money things we can teach them is how to not spend a WAD at the grocery store every time they go, but still get healthy foods. That starts with teaching them how to not make US spend a wad every time we go to the store. (We do not negotiate with terrorists–or screaming toddlers.)

Basic healthy foods aren’t that expensive. It’s the fun stuff that adds up quickly. Our kids have learned that we buy a little bit of the fun stuff, but it’s a rare treat. The best part is when a treat is rare, it’s more exciting than when you get to eat it all the time.

To teach my kids what things cost, I have them look at the grocery ads with me to get an idea of what sale prices are at the various stores in our area. We plan our trip based on the best sales that week. Then I take them shopping 1 or 2 at a time and have them help me decide which items are the best value.

We divide the price by the number of ounces or servings to figure out the cost per unit. Then can compare and decide whether it saves money to buy bigger packages. Often it doesn’t–especially at Wal-mart. One of the keys to saving money is to never assume somethings a better buy…take a second to do the math.

Once they are old enough and trustworthy enough (which totally varies from child to child,) I send them into the store to grab a short list of items while I wait outside. These solo flying sessions teach them the most. It’s like how we remember how to get places when we drive there ourselves, but not so much if we were just the passenger. The first time I let them do this I was terrified that something would go wrong, even though we were at our small neighborhood Aldi and I was right there. It was fine (even though my daughter thought the cabbage was head lettuce–we just adjusted our recipe :).) The youngest child I’ve sent in this way was 11, but sometimes I’ll let a younger sibling go with their 15yo sister.

It’s much easier to learn thrifty shopping as a kid than to try to change your way of thinking as an adult. It’s something I learned at my mama’s side and passing on to the next generation.

This is day 18 of our series 31 Days of Kids and Money

Should We Limit Kid’s Activities?

By Angela on October 15, 2015

What we are about to discuss is a first world problem. We are blessed to live in a land where our kids can learn anything and be anything. The limitless possibility sometimes comes with a bucketful of guilt. I mean, what if Tiger Wood’s parents hadn’t taught him golf as a toddler? What if Titus never saw a basketball until High School?

We’ve been debt free for 10 years, but last year I found myself lying awake knowing I couldn’t pay bills that I had promised to pay–and it all had to do with extras for the kids. Our income had been steadily declining for 3 years and it finally hit a spot where we could no longer meet our obligations. The hard part was their teachers were our friends and limiting activities not only meant disappointing our kids but also cutting our friends’ paychecks–not fun.

It was so awful that instead of calling it quits right then we sold some personal possessions to meet the obligations for the rest of the year. Then we had some serious talks about how we would continue. I begged for a chance to mess with the budget and see how we could make it work. Darren was glad to give me shot–though he already knew what I would discover. Our lifestyle wasn’t sustainable anymore. We finally realized there would be no private school, no dance class, and no sports this fall. I cried when I told the kids. They took it surprisingly well (except for Dub and school–he still asks me often how long before he can go back.) The idea of a slower schedule appealed so much to the girls, they asked if they could stop going to the weekly girl’s meetings at church. That was hard for me also but I agreed. I wasn’t the only one that needed the crazy merry-go-round of life to slow down a little before I lost my lunch.

We started Heidi in violin when she was 6. I was convinced with musical genes from both sides of the family that the early start would boost her to greatness, and she was all for it. When she was 12, her friends took up the violin too. In a few short months they caught up to her, learning in that time what it took her 6 years to master. I figure I wasted about $4,680 trying to give her an early start—-PLUS the time and agony of forcing a young child to practice day in and day out. She’s still playing today, so it wasn’t a complete waste (and it did help with cognitive development.) Still, I’m not a big advocate of starting them young anymore — unless the child is a prodigy. You’d know pretty quickly if that was the case.

The truth is, we messed up a lot over the last few years, putting kid activities above more important financial needs–like retirement investing. It feels selfish to tell my kids NO so I can sock money away for our life when they are grown. I want to give everything to them now. In my quest to give them activities and lessons, I made their lives crazy. They weren’t old enough or mature enough to say, “That’s ok, Mom. I’d like to do it, but I’d like to be with the family and see you and Dad retire comfortably more.” When we were forced to do cut activities, it was a relief all around.

We still do a few things like Boy Scouts, Youth Group, and music lessons. Two are still studying violin, 5 are taking piano, and Heidi earned a fun role in the musical at her new school (which is free!) The music alone is $420 a month. It’s still a lot, but 1/3 less of what we were forking over last year.

How about you? Do you limit activities? How do you choose?

This has been day 15 of 31 Days of Kids and Money

No More Mess! A strategy that really works

By Angela on October 14, 2015

As usual, this post is about transferring responsibility to the kids. That doesn’t mean that we get to sit back and do nothing, but once this system is in place it’s much less stressful than normal.

I couldn’t wait to go to college. For the first time I could set my own rules and try out life on my own while still bringing my laundry home every weekend — independent, but not tooooo independent.

I only took the stuff that I needed to survive and happily moved into the dorm shared with 3 friends from home. For the first time in my life I kept my room clean. Spotlessly clean.

Was it because I only had a few things? Partly. Was it because I finally felt responsible for my own space? Partly. Was it because I was determined to show that I was a mature adult? Partly.

The REAL reason was the college inspected our rooms and bathrooms every Wednesday, and if we failed in any small part, we had to pay a maid to make it right. I was broke enough. I didn’t want to give up extra money each week just to wallow in filth.

Why did the school care that much? If we were filthy, then mold, rodents and bugs could become a problem. They were protecting their property and rightly so. Either we could clean ourselves or hire someone to clean it for us. The school didn’t care either way as long as the room got clean. As parents we have just as much right to protect our property and our sanity by requiring our kids to keep their rooms clean and keep the food in the kitchen.

The Plan

Help your kids sort their items Konmari style, keeping only the things that spark joy. If they still have too much stuff, offer to box half the things to trade when they get bored with what they have.
Give all the items they are keeping a specific home (labels are a nice touch.)
Give a short list of expectations
Inspect weekly (or daily at the start if you are building habits) You might have a learning time period when the kids get a treat for clean spaces
Charge them for a maid if they need one

Do you think it would work at your house?

This has been day 14 of our series 31 Days of Kids and Money

P.S. I have to be really honest here. Not all of our kid rooms are clean right now. The ones that we have Konmaried are doing well and we’re still in the process on the rest. We proved the system worked at our old house and now we’re working to get back to that happy place. A lot of it depends on me being consistent with the checking, the rewards and the consequences. Sometimes I think It would be easier to just clean the room myself, BUT that’s not good for the kids. How amazing would it be to grow up and be a tidy adult? I want that for them.

Music Lessons: Shifting Responsibility to the Kids

By Angela on October 13, 2015

I’ve only heard of a handful of kids who were excited to practice for their music lessons, and I’m not completely sure the stories were true. When I was a music teacher my philosophy was simple. If you didn’t practice, come anyway! Likely you don’t remember what to practice after a week off and I’ll help you get started again. I figured the one practice session a week with me was better than nothing.

At some point, however, a habit of never practicing really slows progress. I got tired of paying for lessons to hear my kids sound the same week in and week out. And our music teachers didn’t all share my philosophy. Often we spent half of the 30 minute lesson listening to a lecture on the importance of practice–and NOBODY wants to pay for that.

Music is important to me. So important that I didn’t give my kids a choice of studying music, just like I wouldn’t let them opt out of math. We couldn’t afford lessons so when it was time to start, I took on a paper route to make music possible. When I became too pregnant to deliver papers safely in icy weather, I started selling Mary Kay instead. Then Darren lost his job, and we immediately suspended the lessons. Our teacher kindly offered to continue in trade for my teaching his wife to sew. I throw that out there just to say that there are ways to have music lessons even if your budget is tight. (I once had a voice student who paid in raw milk = awesome!)

Anyhoo, I finally got so tired of fighting the kids to practice that I announced they were paying for their own lessons. Each instrument cost $60 a month and the 2 oldest study 2 instruments @ $120 a month. My kids don’t make that kind of money, and if they did I’d rather them put it in a ROTH.

So, I offered to pay them $3 for a GOOD practice session. I did not allow them to skip a lesson for not practicing and if they didn’t earn enough to pay for the lesson by practicing they had to come up with the money another way. It worked.

That was over a year ago and now that we’ve been using this method for awhile, I’ve got some tips for you. Make sure to get enough single bills at the beginning of the month so you can pay the kids as soon as they practice. It reinforces the behavior better if they get the immediate reward. It feels weird to go to the bank and get that many ones. If it bothers you, you can trade the kids their ones for bigger bills on the way to the lesson, then use the same $1 bills every week.

I use a clipboard system to help the kids pay themselves when they practice. Original post here. My biggest failure is forgetting to stock it each week :(. That can make the whole system go bust. We have our clipboards hung on the second floor outside their rooms and it would be better for me if they were some place I see all the time. Out of sight, out of mind. If you decide to try it, adjust the system to work for you.

There will come a time, when your child has to pay out of his own pocket. He will be sad. You should be sad too. Say things like, “Bummer, I’m so sorry this happened.” Look genuinely sad. It will be hard to look sad, because this is the BEST thing that could be happening for the good of your child. Try to manage it anyway.

If they don’t have money, you can say, “I don’t know what you are going to do.” Do not give him answers. Do not bail him out. If he offers to work for the money, accept the offer. Make the job difficult enough that practice would have been better. If they will be short with money going to the lesson, please (secretly) call the teacher ahead and ask for his help in making your child responsible. You might offer to slip him the money (and possibly an extra tip) if he will make the child work the debt off. It will only happen once (or twice if your child needs to test the limits a few times to feel secure.)

This is day 13 in our series 31 Days of Kids and Money

What it Costs

By Angela on October 12, 2015

A little housekeeping: Are you getting 2 emails from me every day? I’m sooo sorry for being annoying. I just figured out how to let my 6,000+ email subscribers get the blog posts, but 300 of you were already getting them from feed burner–and now are getting 2. I recommend scrolling to the bottom and unsubscribing from the feed burner email, even though that email is prettier. Before the end of the month I’m moving my service to MadMimi which will be a pretty email AND you’ll get important info on things that I don’t post on my blog. You know, special things only for people who are big enough fans to subscribe. If you keep the feed burner one, and get rid of the ugly email–you’ll miss out. I promise it will only be ugly for a little while longer.

I wrote a blog post August 2014 about how we handle souvenir and snack money on vacations. I’d love to have the cash to buy cool and yummy stuff for my kids all the time. The reality is with 6 kids a $1.50 gas station drink quickly turns into $9 if no one wants gum. The other reality is that telling kids “no” makes them more fun to hang out with in the long run. They rarely ask me for anything, because they know it’s pointless. They don’t go around pouting about it either (most of the time—they are kids after all.)

When I do surprise them with a treat, it’s because it’s my idea (not because they asked.) AND they get super excited about it. That’s the thing about treats. They are awesome because they are out of the norm.

When we are planning a vacation, we give the kids opportunities to earn their own cash. My parents are a big help with this providing jobs like painting a fence, cleaning out the gutters, or sweeping leaves and sticks off the patio. Instead of handing the payment to them right then, we put it in their trip envelope and keep it safe for the big event.

When we leave, they get their envelopes (with a very exciting show of ceremony) and told they can spend on whatever they want, but when it’s gone it’s gone. If there’s anything left after the trip they can keep it. They quickly figure out what things cost at a gas station vs Walmart and start to make tough decisions about what they really want. When it’s your money that you sweat to earn, everything changes.

This is day 12 of our series 31 Days of Kids and Money

A few Bible Verses about Money

By Angela on October 11, 2015

In a world where it’s popular to hate and protest the wealthy, I want my kids to look at money differently. I want them to manage what they have according to God’s principles, to remember that it all belongs to Him anyway, and to work as hard as they can and do the best job they can at whatever they attempt to do. If doing that makes them wealthy, I want them to be OK with that. Then to take the money after providing for their families and change the world for good.

It’s not more righteous to be foolish with money management or lazy at work just so you won’t end up as an evil rich person. It sounds crazy to type that, but I’ve met people who feel that way.

Money isn’t the root of all evil. The love of money is.

1 Timothy 6:10 KJV

For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

God sometimes blesses people with wealth when they are faithful with little.

Luke 16:10King KJV

He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much.

Genesis 24:35 KJV

And the Lord hath blessed my master greatly; and he is become great: and he hath given him flocks, and herds, and silver, and gold, and menservants, and maidservants, and camels, and asses.

Here’s a list of faithful people that God made wealthy. It was apparently not meant as a curse.

And here’s a BIG list of Bible verses about money.

This has been day 11 of our series 31 Days of Kids and Money.

Why Little Kids Should Invest in Retirement

By Angela on October 10, 2015

Darren and I spend 10% of our income on retirement savings. It’s a sacrifice for us to invest that much and really ought to be 15%. We are working towards that eventually, but it’s not easy with as many kids as we are providing for at our level of income.

Roth IRAs grow tax free. When you make less than $9,000 a year (like a kid might) you are in the 10% tax bracket. They pay the measly tax and can invest with no taxes on the interest income. That means if they retire as multi-millionaires and live off their Roth they won’t pay income tax during retirement. It’s a beautiful system. Read more…

Debt is Not an Option

By Angela on October 9, 2015

We had a shift in our thinking 10 years ago when we followed Dave Ramsey’s debt snowball to kick $89,000 in debt to the curb in 3 months. We purposed then to never borrow again (except on a home.)

When we think that way and model that for our kids our thinking shifts from how can I borrow the money to how can I EARN the money. We find ourselves planning ahead for things like car purchases, college, and appliances.

There isn’t enough money right now to fund every category we’d like to plan ahead for. If an emergency comes up in one of those unfunded categories, we have our emergency fund. Since those extra categories are written into our budget with a temporary $0, we know how much income we need for the ideal monthly budget. It gives us something to shoot for as I build my side hustle business to make up the shortfall.

I’m talking to my kids now about what they might being saving for. A car, college….definitely. What about a house? If they can work and live at home for a few years as they sock money away, they might be able to purchase their first home with CASH.

Imagine never having a house payment…ever. That’s the stuff I dream about for my kids.

Debt is slavery, because you’ve already spent money you haven’t earned yet. Your future self ends up working for no pay. Choose your hard: I choose to wait until I earn it and hope my kids will too.

This is day 9 of our series 31 days of Kids and Money.

How to Teach Your Kids to Become Entrepreneurs

By Angela on October 8, 2015

My goal for my kids is to learn to work hard, do their best work, and be able to create income even if traditional jobs aren’t plentiful. Helping them with their own businesses as children is one way we work on those skills.

A loyal reader sent me this suggestion: I absolutely love your kid’s money month, learning about their businesses. I was wondering for those of us less inclined, would you be able to do a blog tailored for the how to a kid would start a business? I loved the little tip about the fictitious name. I wonder how that “self employed” tax thing works. I was thinking about Abby and what she’s good at that she could help earn her some money and the party planning, cake baking came to my mind. While she’s still a teen and it may not be just like a professional baker, I think for what little practice she’s done that she’s knocked it out of the park.

I’m still learning a lot about running businesses, but here’s what I’ve learned so far. Hopefully this will steer you in the right direction:

Choosing a Business

Have your child answer these questions and see if anything sparks a business idea:

What do I enjoy doing?
What problem can I solve for someone else?
What do I already have the supplies/equipment to do?
What do other kids my age do to earn money?
What adult jobs appeal to me?

Setting up a Business Plan

Keep it Simple, but include these things:

What service will you provide or what will you sell?
How will you make money?
What will you charge? Make sure your fee covers your expenses plus profits.
What are your expenses? (including supplies, equipment, advertising, transportation….)
How much do you want to earn? (set a time frame) What do you need to reach that goal? (Specify the number of clients, Hours to work, or items sold)
How will I keep records?
How will I expand and grow?
How can I leverage this business? (Earn a percentage of what others sell; Train others to start their own similar business)
Do my prices reflect current market value (for my age?), allow for expansion and growth (to pay someone else and still make a profit.) You want your prices low enough that you will get customers, but high enough that you won’t have to raise prices for several years. If you are worried you are charging too much when you are getting started, set your prices at market value, then offer a coupon incentive for your first few customers while you gain experience.

Finding Customers

Who is your ideal customer?
Where does your ideal customer hang out? How can you reach them with your message?
If you are doing something other than babysitting, you probably need a website to direct prospective customers to. This is a great place to outline your fee structure, showcase your work, give customer reviews, and offer scheduling. There are free websites available but to save a headache in the future spend a few bucks to buy a domain name and have it privately hosted. You can set up hosting for about $6 a month. Then upload wordpress.org for the easiest to build website. There are great youtube tutorials or you can get someone to do it for you from fiverr. (Most stuff there is only $5.) I use H ostgator for domain registration and hosting and have been pleased with them. If you use someone else, find someone who also uses Cpanel. This simplifies things if you end up needing help from someone on fiverr or similar.
You should also set up a facebook business page. Tutorial here.
I’ve been able to help my kids get clients through facebook. It was a great first stop for us since I wanted them to work for people I knew well. I just popped out a note that told the business, their availability and rate. We were booked for the summer within a couple of days.

Business Licenses

Most states have a Cottage Food Law that allows you to sell home baked goods and jams and jellies from your home without a license or health inspection. So if your daughter wants to bake cakes for birthdays, she probably can :). You can check the laws for your state here and here.
Other business licenses–this gets tricky. If you do a search for “Do I need a business license for_______.” you’ll get answers ranging from “definitely” to “probably not.” We did not get licenses for any of our kids since none of our businesses require traffic to the house. When I started my first home business, I got a fictitious name registry since my business name did not have my legal name in it. That allowed me to get a bank account with my business name so I could cash checks made out to the business. You can skip all that mess if you put your legal name into your business. For example my official business name is: Angela Coffman: The Grocery Shrink (no fictitious name registry necessary–in Missouri.) Get more info on whether you need a business license here.
If you are advertising with flyers door to door or on cars, you probably DO need a permit for that. You can get that at your county courthouse.

Taxes

Federal income tax: Your child MUST file their taxes when they earn $400 or more. The good news is when your child starts filing federal income tax, they become eligible to invest in a Roth IRA. Make this happen. (I’ll talk about it more later this month.)
Self-employment tax: This is social security and medicare tax. Normally an employer pays half of this tax for you. When you are self employed, you play both halves. You can learn more here. It’s 15.3% at the time of this post.
State and local taxes–these are in addition to your federal income tax. BLESS the states that do not have a state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire and Tennessee. (47 states charge corporate income tax, keep that in mind when deciding if and when you should incorporate.) In addition your city may choose to charge a local income tax– 😛 Learn more here.
State and Local sales tax: Your tax rate will vary based on your zip code. These taxes generally apply to goods (but not services) sold to the end consumer (not sold to a distributor or to a tax exempt entity, such as a church.) This might come into affect if you are selling crafts or baked goods, which is one of the reasons I steered my kiddoes towards service industries. Learn more here. Some states have also enacted internet sales tax laws.
Tax Deductions: Having a cottage business makes taxes a bit more complicated, but there are whole list of tax deductions that can help reduce your child’s tax burden. Here’s an official list from the IRS.
Whatever you do keep good records. This is great experience for your kids. For every tax deduction you need proof, a receipt, calendar of appointments…something. Keep everything together and save it for 3 years just in case you get the dreaded official letter in the mail. (Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction–probably won’t apply to the kiddoes :).)

This is day 8 in our series 31 days of Kids and Money

Meet Aspiring Kidpreneur, Brandon

By Angela on October 7, 2015

Brandon turned 8 on the 5th of this month and hopes to launch his business this summer as a personal consultant on Kid Bedroom Organization and Interior Design.

I’m going to be up front about this, Brandon is unusual. He was born organized and likes things to be tidy. He made his own lunch from the first day of kindergarten, wakes himself up for school with his own alarm, and frequently brings me items to get rid of because he doesn’t play with them enough. He chooses his own clothes and slicks down his own hair. He likes to wear belts, tucked in shirts, bow ties and vests. He loves an opportunity to put on a business suit, tuxes are even better. If I need assistance, he’s the first one to volunteer. We sometimes joke he was born an old man. (He considers that a compliment.)

I wouldn’t have talked with my other kids about starting a business at age 7, but he’s interested in it, has skills and an unusual sense of responsibility for his age.

He begged me to let him start working last summer as a recent first grade graduate and I held him back. I wanted to make sure he had the attention span and maturity level necessary to follow through on the job. I’m not sure he’s quite there, but we are going to try a few clients over winter break to get him some experience PLUS some before and after pictures and customer reviews for his website. I plan to be his personal assistant until I’m sure he is ready to fly on his own.

I’ve been spending time talking to him about the steps he will take when he starts a new job, how he will respond if someone shows an emotional response to cleaning up or letting things go, and the importance of sticking with a job and working hard especially when someone is paying you. He’s also thinking about simple systems and checklists to leave behind, so the parent and child can work together to keep the child accountable on keeping his room tidy.

He plans to work in 2 hour increments 2-3 days a week and has a list of items he can up-sell such as a virtual room redesign with shopping and work lists and subscription for weekly inspections and treat delivery . He is also planning ahead to be able to hire people to work for him so he can take on even more clients and launch an online training program so other kids can start satellite businesses in their own areas.

Here’s his interview:

This is day 7 of our series 31 Days of Kids and Money