Friday, November 9, 2012

Friday Q & A -- money and savings

{most of these are questions from this post on our money system.}

I have been thinking a lot about your dads 10-20-70 dealio... i think it's great, and wished i would have known about it long ago.  my question is, do you and Dave follow this method still in your own lives?, and if so, have there been times you have had to adjust it, or have you been super strict about it.  I am just waiting for one of our properties to sell, then i want to go full force on this!!!

Yes we still do the 10-20-70 religiously.  We have always taken this really seriously and I am so incredibly grateful for the wisdom in it.  We have always paid full tithing no matter what else needs to go by the wayside because we both feel really strongly about tithing.  We believe all that we have is really from God, so that tithing sacrifice helps us remember that we are only stewards over any gains we may have.  I love tithing even though it’s been really hard to let go of at times!  For more about tithing click here.

There have been a few times in between jobs or what-not where we just couldn’t do the full 20% savings.  But even then we saved all that we possibly could.  We wanted to always have saving be our habit and never let it go.  My whole family has done this and it has been so great as a safety-net.  My sister’s husband was without a job for over a year and because of that savings rule they had adhered to so closely they were able to survive just fine.

Have you ever done "pegs" in your family? I remember your Mum & Dad saying that their favourite question in the house " Are your pegs in?"

These “charts” are our substitute for “pegs.”  Oh man I sure wish I had pegs like we had in our family growing up because I’m so darn sentimental, but in some ways I like the charts better because we can keep track of things right there instead of dealing with the “slips” we had to put in the family bank growing up.

Any suggestions for those on a limited income? Our kids are 12, 10, 8, and 6 and so $36 per week is quite a lot for us. I think I would be excited for them to NOT do their jobs ;) Any readers have an amount they use that still gives their kids an incentive but doesn't break our bank?

I'm with you on that seeming like a lot of money, but keep in mind that not every child will get that amount every week...it's tough to get a perfect score, but half their age still helps them with the money concepts. Also, I like to think of it like a money filtering system: I am letting them EARN some of the money I would be dishing out anyway for the part of their clothes they will be paying for. But in doing this system I am giving them ownership of those clothes rather than having me just dish it out for them. They also pay for any entertainment they do with friends that some parents give their kids cash for. They never ask because they know that’s their responsibility. Believe me, I hesitated on this, but I love that they learn important lessons…if they don’t earn their money, they have to stay home from fun things or not get what they’re dying for at the store, and after a while that starts to sting a little.

There is certainly not a set amount parents need to pay, this is just what works for us. Figure out what works for your family budget and go from there.

What do you do if your children lose something, such as a lunch box at school, do you make them pay for it?

It depends what they lose.  If they were negligent and didn’t take good care of something then yes, they have to fork out the money to replace it.

How did it work for you when your oldest was the only one old enough to earn money? Was that child the only one with a chart, or did everyone still have a chart but the younger ones didn't earn money yet?

I think that’s why I figured this system was too complicated in the beginning: we tried it too early when our kids were too young to really “get it.”  I figured since it worked for me, it would work magic for our kids too.  But I didn’t take into account that I was already a teenager when my dad videotaped himself telling us all about this whiz-bang system:)  I wouldn’t recommend starting this too early or it will be frustrating.  (We’ve only done this full-scale for the last three months.)  When Max and Elle were little we concentrated more on super simple things like sticker charts, but always worked on the concept of tithing and savings. 

I saw you included Lucy on the jobs as well. How do you handle paying her when she will probably miss 1 or 2 very easily at such a young age. My children are 7, 4 and a newborn. I love the system but know it will lead to no money for my little guy at age 4.

See above answer, but to expand just a little, if your kids are really young I would make it much more simple. I should have mentioned in the original post that Lucy is not good at this system. 

At ALL.

But she is gradually learning because she’s watching her older siblings.  It takes a TON of patient training for younger kids so I would totally stick to something simple until your kids can grasp the concept a little bit better. 

I liked the comment from “Willemijn” that said: “When our kids were smaller they each had a star chart and earned 5ct per stamp or star. If they misbehaved or didn´t do their chore they received a black star that would cost them 2 stars. So at the end of the week they counted their stars and had a bit of pocket money.”

I read your parent's book "The Entitlement Trap" and we have been implementing a family economy for several months.  I have been feeling like giving up!!  I was hoping that this would magically solve the problem of me nagging my kids to get their stuff done on their own.  I felt like this would be the answer . . .  they would look at their short lists and be motivated to get them done on their own.  But, because in my mind these items on their lists are not optional . . . (homework, rooms clean, music practice) I find myself making sure they get their lists done . . . their list becomes my list because these things need to happen.  I would love your insight on this:)

This is a system that is going to take a while for kids to get the hang of.  And I’ve realized over the years of trying new things with kids that there is no magic, easy answer that teaches kids to get working and earning, it all takes a lot of work from the parents to get it going.  BUT if kids really need the money they will catch on with time.  In order to make them need the money, they have to be expected to pay for things.  I think this is the hardest thing for me…especially if a child is really wanting to do something with a friend that costs money or if they are really wanting that new cool shirt.  It is SO hard not to cave in help them pay for it, or let them do an IOU or something like that.  But kids learn so much from missing out on things and you can bet they’ll be more willing to earn that money the next week after they miss out on an opportunity. 

The hard part of this system is that you have to let them fail once in a while.  That’s how they will learn.  Let them fail by not practicing for a week and see how they squirm when it’s time for piano lessons.  Let them go to school without their homework done and let them see how uncomfortable that is (for some not-so-conscientious-kids maybe you could even work out a little deal with their teachers to make it extra trouble if they haven’t done what they were supposed to…)

And it also doesn’t hurt to have them come to pay-day with the other kids while you make a big deal about handing over their siblings’ cash.

Most importantly, be patient.  If your kids are old enough and they need that money it’ll come together. 

How do you handle your kids' activities (sports, going out with friends, birthday gifts for friends, etc...)?  Do you pay for all of those or have your kids pay for some? 

We pay for sports.  Dave feels strongly that he wants to provide those opportunities for them so he works hard is willing to let some other things go so that they can be exposed to things they are interested in.  There are some “seasons” of life where this is more feasible than others.  As far as birthday gifts go, we have our older kids pay a portion of what we spend on gifts so that they can feel ownership.  We don’t have a set amount on that.  They pay for the Christmas gifts that they buy for each other so we are in the season that they better start doing some extra jobs to earn enough!  (They generally choose things in the $20 range for gifts to each other.)  “Money Jobs” help a lot with that on top of the money system thing we are doing.

I have a question about tithing. So the kids pay tithing on the amount you give them, but have you already paid tithing on that money? Do you not pay tithing on the portion of money you pay them? Is the money "double tithed"?

Yes we have already paid tithing on the money they earn, but it is their “gain” so they pay tithing on it too and that’s my favorite part of this whole system…watching them give back even if sometimes it’s hard.  Elle earned $140 for her last photo shoot (because it was a three in one kind of deal) and when she realized how much tithing and savings she needed to take out of that she almost had a heart-attack.  But I’m so proud of her for storing it away and giving part back.

When do you pay the interest? Each "payday"?

No, interest is only once per quarter, and since we’ve only been doing this full-fledged for the last few months, we’re just about ready to show the kids how great that 10% interest is.  I’ll try to remember to let you know how much their eyes light up about that :)

Are there other chores the kids are responsible for which they don't get paid? Just "you're part of the family, so you have to pitch in" chores?

Yes we have all the regular things they’re just expected to do because they are part of a family and we all pitch in to help: Saturday jobs (here), after-dinner jobs, etc.

When you say they have to pay 1/2 of everything does that include sports/lessons? I know it includes clothes, what else does it include?

Just clothes.  They pay for 100% of other entertainment stuff they do.

Do your kids have to come clothes shopping with you then, to spend their own money?

YES!  Max and Elle are far too picky at this point to let me shop for them anyway and I am a horrible guesser at sizes without them. None of us are much of shoppers, but I like when they really are scraping the barrel needing new clothes because it helps us spend one-on-one time together.  They are sure to bring their cash with them when we shop.  I will buy things for the little girls without them there, but man, sizing is rough without them. 

I already answered this next one in the comment section of that post, but I thought it was a good question so here it is again:

Do you keep an envelope or something inside for each kid for their savings? For me I'd actually have to put the money away that they are saving so that when they cash out at 18 I don't have to scramble to find the money. How do you handle that aspect? Do you have bank accounts for them?

Since we are the "bankers" of the family bank, Dave and I will always make sure we have the funds available for them (in our own bank accounts) whenever they want to withdraw them, but they are not allowed to take that money out until after they graduate from high school. We won't actually store all their savings in there since, as you can see, that bank is not exactly secure:) It's just the principle of saving up for something really important and I hope we can instill that firmly into their minds. They know those savings totals written in those check registers are their own money, and sometimes they don't like the fact that they can't use it right now.  But they'll thank us in the long run for helping them save. (I know I sure thanked my parents for that!)

Max does have his own bank account (explained at the end of this post). Every time he deposits money in the bank he automatically takes out part for tithing and transfers 20% over to his own savings account. We'll start this up with Elle when she turns 15 (I think). 

22 comments:

Trina said...

I love how you bring this topic up every now and then - it is so important. I was awful with money when I was younger. It wasn't until meeting my husband and we started building a life together did I finally start to "get it". I want our kids to be more confident with their finances. We will be implementing your system soon. Thanks!

Sonja said...

Our son is 15 and has a small part time job (he can easily handle it and still gets great grades) at the grocery store around the corner and he earns around $80-$100 a week. Our daughter is 13 and has two small jobs making her $35-$50 a week. They each get over $200 for birthday gifts from Grandparents and then some for Christmas--they have lots of savings in their bank accounts and lots of cash at all times. If your kids had regular jobs, do you think they would have the incentive to earn just $15 or $13 more a week doing 20 tasks? (Our kids are smart and would figure out exactly how much they are earning per task.) I'm finding neither of them are not that motivated by money...yet I want them to learn the same things you are doing with your fam with your money system. They feel like they have plenty, and are not buyers or wanters of trending things. I guess my question is, do you think that there might be a modification we could make since these two have a regular income?

Janelle said...

THANK YOU for all the Q&A. I have been thinking about this a lot the past few days and am going to have a talk with my husband about what we can plan on doing with our kids.

Sorry to provide you with even MORE questions but here is one more!! School lunch. Do your kids buy it? Do they get a fixed amount of money for lunches? Do they pack their lunches and if so what do they pack? I am asking b/c my 12 year old wants to only buy lunches...because all the junior high boys buy lunches and he doesn't want to bring a lunch box. I do completely understand but it is very costly. I was thinking about giving him a certain amount of $ and he can decide to use it for lunch or pack his own. I thought of you though and wondered how you handle that...especially with Max.

Mimi said...

What about India? How do you finance that; especially with Elle wanting to go again?

Lisa said...

I love all of your money ideas! Thank you for sharing!

We just had our family portraits taken and so something that stood out to me was the amount Elle charged for her photo shoot. She does a nice job with her photos, but that does seem a steep charge for an amateur. We just had ours done for a $150 session fee from a professional. As an amateur and teenager, don't you think the fee should be quite less considering lack of experience, formal training? I guess if I was having a teenager do our photos it would be part to give her experience, expecting to pay less. And, now that I think about it, maybe they were generous with her or gave her a "bonus" if you were friends with them.... I'm honestly just curious about it.

dresselfamily.blogspot.com said...

i love this, i need to get on the ball!!!

Q: Will Max, or any of the girls pay for their own missions???

* and will you help pay for school?
if so how?

* I served a mission, and now with the age change, i hope all girls go ahahahah*

Eyrealm said...

Great questions! Great answers!

AMK said...

One of the great things about earning your own money is learning how the market values your goods. I, for one, am glad Elle's Photographs are judged by their merits and not by the photographer's age.

The Hulls said...

These money posts couldn't have come at a better time! I was just going over the money system in your parent's book, The Entitlement Trap, with my husband last night. Thanks for sharing how you've worked out the kinks!!

shawni said...

Sonja, that is an awesome question. You would definitely need to adjust what you do if your kids are already making good money. The great thing about that is that you can still teach them the 10-20-70 principle and I think it would be even more powerful (but also more difficult( with them already earning money.

Janelle, we let them buy school lunch once a week if they really want to. It is expensive and so un-healthy (at least where we live) so we figure once is enough. We pay for that. But if your son is dying to bring lunch I think you had a great idea of setting up a fixed budget for them.

Lisa, Elle got extra for that photoshoot because it was five kids plus a baptism photoshoot all in one, but she gives full-resolution images to her clients and I have to say she is really quite good so I feel like that's a very fair price. I let her make all those decisions on her own and I love to watch her figure things out.

Dawn said...

OH I love Fridays and being able to see what works for different families! Thanks so much for your insights!!!!

Ware Family said...

Question about the 10-20-70 principle: Does the 20% that you save include what you put away for retirement or is that then taken out of the remaining 70%? Also, do you save for your kids' college educations/missions? If so, where is that portion taken from, the 20% or the 70%? I guess to be clear, what I want to know is, is the 20% savings just a "rainy day" fund, or is it an umbrella fund including all forms of savings? Also, when you're saving for something specific (any short term or long term goal like a down pmt on a house, a piano, a car, vacation, etc) where does that money come from? Thanks for all the info on this.
Also one more question: When your kids turn 16, will you expect them to get a job? If so, will you then expect them to pay for more things themselves?? Lots of questions, sorry!

dresselfamily.blogspot.com said...

ditto on ware family questions... I love fiancial stuff, i find it so educational!

Lisa said...

Shawni, thanks for answering my question about Elle's fees. That totally makes sense since it was actually two shoots in one--brave girl! I can't even get my kids to sit still for me so I guess that's why we let photographers give it a try! I completely agree that the value is in the product, not in a person's age, but I guess I was just saying that part of what you are paying for is the premium of both one's time and experience. That being said, I am a firm supporter of our children finding worthwhile ways to earn their own money (and spend their time and talents!) so I think it's wonderful that she is doing it.

Janelle said...

Thanks for your reply to my comment Shawni! Ok...really I will stop bugging you soon...but I keep coming up with dilemmas lately and I think to myself...my "pretend friend" Shawni would know the answer ;) I think you have posted on technology in the past...I'll check out your archives in a minute...but I would love to see a post sometime about the technology in your home, how you handle internet access on ipods, computers, etc....any technology rules you may have. I'm thinking about Christmas gifts and am going back and forth on the idea of ipod touches. Any advice you could give would be fabulous! Thanks again ;)

Corinne said...

I sure appreciate this and all the great content on your blog. Yhank you!

Helen said...

I like your blog and upbeat attitude about life!

However, while we're discussing finances, I'd be interested to hear your thoughts on how the LDS church spends its money as they do not disclose how they spend tithing donations.

I'm sure you are aware that the LDS church has recently built the most expensive shopping mall on the planet. Does it concern you that this is how your church spends it money? Do you worry about how your church spends your 10% or do you simply trust your leaders to spend it appropriately? I personally do not think building a mall is a good use of charitable donations but am interested to hear what you and others think of this situation.

Amy said...

How Tithing is Used in the Church

Tithing funds are used for:

• Building temples and church buildings.

• Providing operating funds for the Church.

• Temple and family history work, and many other Church functions.

• Education.

As The Church of Jesus Christ of Latter-day Saints has a lay (unpaid) local ministry, tithing funds are not used to pay leaders of the Church.

Gordon B. Hinckley, a past leader of The Church of Jesus Christ of Latter-day Saints, said: “Our major source of revenue is the ancient law of the tithe. Our people are expected to pay 10 percent of their income to move forward the work of the Church. The remarkable and wonderful thing is that they do it. Tithing is not so much a matter of dollars as it is a matter of faith. It becomes a privilege and an opportunity, not a burden. Our

Jill said...

I have a random question. You're husband travels for work sometimes, right? My husband is going to have to start traveling more frequently for his new job, and I'm just wondering if you have any tips on how to stay sane and not get too lonely at home while he's gone.
Thanks!

Julie said...

Hi Shawni,
Thank you for answering 2 of my questions - the 2nd & 4th ones. You made my day:)

Just a quick question about tithing - What would you you do regarding tithing if one of your children decided that they no longer wanted to pay it, due to lack of faith/testimony or a testing thing? Would you still make them pay or or would you just leave that choice up to them & hope & pray that they Choose The Right?

I have a strong testimony of tithing & it has blessed my life but I'd still like your ideas on this. Thanks:)

Happy Remembrance Sunday (Poppy Day) from the UK.

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Ashley Hinson said...

I am math dumb and have a question. Do I take our net pay and multiply it by each % or do i multiply by the % subtract that and then move to the next % with the new total?

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