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Debit cards. Credit cards. Prepaid cards. Apple pay. Google wallet. Paypal. Venmo. Bank transfers. Phone and mobile payments. Checks. Money orders. Has money taken on too many forms that the value of cash is diminishing? The idea that the next generation is losing the sense of what the true value of cash really is could very well be true. This theory is called financial abstraction, coined by Adam Carroll in a Tedx Talk.
This post originally was inspired by a Facebook post and I asked Heather if we could post it on my blog because I felt that the message was too important not to share! Read more about Heather’s way of teaching her daughter Ryley about budgeting to see if it also sparks unique ideas for you and your children to talk and learn more about budgeting together.
My brother recently sent me a YouTube video of a TEDx Talk about a man replacing his family’s Monopoly money with $10,000 cash to see if they would play the game differently using real money. Two out of the three children changed their game-winning strategies based on the new circumstances. His final point was simply that younger generations have no emotional connection to money, that it seems less real to them because technological advances have made physical cash-handling almost non-existent. Unfortunately, there are still very real consequences to functioning in life using what seems to be limitless “fake” money.
I remember one time when Ryley was small, she wanted something that I couldn’t afford, so I told her I didn’t have enough money. My beautiful innocent daughter replied in a very matter-of-fact way, “that’s ok, just use one of your cards!” That was the week I started taking her to make her own cash deposits into her bank account. Every birthday, holiday, or money-receiving opportunity following, we put some of it into her wallet for fun and some into her bank account. We discussed what types of big things she would like to save up for, and frequently used portions of her money in order to purchase them.
Years later, Ryley has now started babysitting for pay. We decided on a reasonable amount she would charge for her services, and some wiggle room for how much would still be worth working for if negotiations were required (aka her value). She keeps her cash and I have no stake in the money she earns. There was a high-priced item she wanted for Christmas but didn’t get, so I offered to cover a specific dollar amount against the total, and the rest would be her responsibility.
Realizing she has babysat enough evenings to purchase the item almost twice by now, I asked why we hadn’t gone to get it yet. Ryley then had to review her spending (fun foods at lunchtime instead of the free meal, movie snacks on a night out with friends, etc.) and acknowledge the importance of budgeting versus spending. We had to wait one more weekend to re-save enough money, then went to Best Buy.
It was on sale! Instead of the usual $99.95, the Sprocket price tag boasted $69.95. Great for us, since money saved means more in the pocket, or in this case the ability to purchase things that compliment the large item. I gave Ryley the option of keeping the difference, but pointed out that she might want more of the photo paper while it was also on sale (only 6.99 for 20 pieces), and she would still be spending less than the original amount. At the counter, she decided the warranty was a wise investment this time. Out the door with receipt in hand, Ryley wondered at the final cost versus the sale sign. Tax, warranty, add-on item purchase... it all adds up! And now she is left with the remaining money to begin saving for the next “want.”
About a month ago, I almost got her one of those kid-friendly credit cards. It would have been so convenient to me now that I’m not constantly carrying restaurant tips and don’t often have cash to hand her when she needs it. But there’s plenty of time for convenience in the future. First I need to help her learn the value of the actual money that comes and goes, especially since it rarely feels real anymore. I love being able to scan my Apple Watch at Starbucks or Venmo a hired musician as soon as the paper check I had to wait for clears. But I’m not doing Ryley any favors if I don’t help her learn how to be responsible for her choices. Same goes with household responsibilities, cooking from scratch, time management, commitments to others, etc.
That’s what parenting is about! I could throw her at the world at 18 and hope she doesn’t have to learn everything the hard way, become someone else’s unknowing burden, or even end up my responsibility again. Or I can attempt to build a foundation of independence and show her steps toward becoming a successful adult. Yes, she’ll still make mistakes (and boy do I constantly make them too!), but it’s still better than the alternative. Our kids need us to be their parents. They learn how to live, love, and help others by watching us. Let’s give them the best chance we can at having a bright, fruitful future in which they benefit society in some way. I’m cheering you on, yay parents, we got this! Now excuse me while I go order from postmates because I’m way too tired to cook tonight. . .
This post contains affiliate links. See full disclosure here.
November tends to set the tone for the holiday season for me. You bet I already started watching Christmas movies! Some of my favorite Christmas movies include Elf, The Polar Express, How The Grinch Stole Christmas, and any other Holiday movie available on Netflix! Enjoying a cozy night in during the Holiday season helps with budget relief too. I do not have to worry about spending money going out to the movies, or eating out, because all of that can be done in the comfort of my home. I started my holiday baking too; by finding ingredients in my cupboard, searching those ingredients into Google, and making it my own by adjusting according to what I have on-hand.
November Goal 1: Cheap and Healthy
For the most part this goal really worked for me. Throughout the month of November I felt myself become more conscious about each purchase. I made sure that if I was going to buy something, even if it was a budgeted item, that it would be the cheapest I could find it. I had to rearrange a few things that I did order to make sure it was the cheapest and healthiest. But overall, this goal came fairly easy to me.
Once you become more conscious about how and when you spend money it brings more awareness to bad spending habits. Being more aware and mindful about spending every day is truly eye-opening. I mean, there were still many days where I felt tempted to spend money outside of my budget. But, the simple fact of sticking to this goal was helpful for me in becoming more aware and conscious of my spending habits.
November Goal 3: Stick to Black Friday Budget
I did my research, planning, and price checking before I even went in to Black Friday shopping on Thanksgiving Day. I had planned months in advance for the items that I was planning on buying. Since I had my list for what I was to buy on Amazon, all I needed to do was go into my cart and click on purchase! In fact, I had budgeted to buy a plane ticket for a trip I am taking next year. However, when I looked through my inbox at all the deals and sales the airlines were having, no matter what the deal, it still did not fit into the budget I had planned to spend. So, I decided to pass on buying the plane ticket during the Black Friday weekend and set up some Google alerts on plane tickets, so I will get notified once the price drops. This way, once I see the price fall into my budget then I will click on purchase. My trip is still a few months away, and I think I have the time and flexibility to do this.
Let me take a moment to mention how important it is to plan purchases out, especially if it is going to be a large purchase. If I was not being mindful about my specific budgeted amount for that plane ticket it is very likely I could have spent a hundred dollars more than I am actually willing to spend. Oftentimes, we have a tendency to get caught up in the busyness of the work day, and end up not being mindful about what happens once we leave work. For me, my weakness lies in thinking there is no harm in driving through Del Taco or In-N-Out for dinner after work. The thing is, each time I do that it adds more and more to my dining out budget line that was unplanned for. Which means the potential of that budget line increasing each month is high. This is why I am such an advocate of meal planning. Meal and grocery planning can save hundreds per month if you do it right!
One common thing I often overhear people talking about is when someone sees an item they would like to purchase, say In-N-Out on the way home from work, then that person tries to figure out how to fit that one item that they want into their budget. But that type of thinking is backwards. It should actually be the other way around. The budget and planning should have already been done prior to going into the store. If it is not in the budget at that moment, then perhaps it can be added to your budget later on if it is something you really want. So, the idea is that you would plan for it instead of making an impulse buy. My hope in saying this is so that we can be self aware and make conscious decisions rather than snap decisions. It honestly feels like it is a trap that we get pulled into of the need to overspend and over-indulge. May we all be a little more mindful this holiday season on purchases that we make and the food we choose to eat.
Would you know the answer to the question: Do you live below your means?
Earlier this week I was listening to a podcast where they were talking about how it is culturally acceptable to spend, spend, spend! Buy that new widescreen/flat screen/3D Screen TV! Buy the newest car! Buy that new piece of electronics! Buy the latest and greatest fashion line! Living within this culture where we are conditioned to overspend beyond our means, will allow us to do just that with seemingly no repercussions. I truly believe it becomes very hard to live below your means when you are immersed in a society and culture where it is acceptable to live beyond your means.
As I see it, there are a few options available to you in order to start living below and within your means. Here are five ways you can choose today to start living below your means:
1. Stop spending money
First off, it is easier said than done, but just stop spending your money altogether. Stop going out to eat. Stop buying the latest and greatest car/electronic/clothing. Even if we stopped here, at this point, you could be on track for living below your means. With the pressure of this current culture, being status quo is seems to be no longer enough. Everyone wants to be the first person who, when it comes to their Instagram account, is posting about their greatest experiences, or the newest restaurant in town, or whatever new piece of electronics they recently got. It especially makes me nervous when people talk about always spending money. I always want to interject, and ask if they have a budget, or if they are saving for retirement. . .
2. Increase your income
If you have done everything you can to cut your spending, then the next step is to figure out a way increase your income! This may include asking for a raise from your employer. But, seriously, when was the last time you had a raise? I am sure you are a great employee that goes above and beyond. Build your case, and request the meeting with your boss. It could be as easy as that!
Increasing your income could also mean you are working a side hustle. Did you know that if you started a blog, you could eventually start making money off the blog? Increasing your income could also include going through your house and purging items that are no longer useful for you. Instead of donating those items to Goodwill use Facebook Marketplace to sell them; or, apps like Poshmark (download the app and use my code for a $5 credit: EDRINAJENETTE). Another option is to drive for Uber or Lyft on the weekends, instead of watching Netflix. These are just a few ideas and options available to you.
3. Create a budget
What it really comes down to, in my opinion, the true problem lies within not having a budget and sticking to it. When it comes to living below my means, my number one takeaway that ensures I am living within my means is my budget! So, simple, right? Well, come to find out, many people do not use a budget! Which is entirely unfortunate for them because this is the number one way to ensure you are living within your means! At the very core of creating a budget is the fact that you will need to start tracking every single transaction from your bank accounts and credit cards. Making sure you are comparing what you spend to the amount of income that you are bringing in for that time period (whether it be per pay period or per month). So that at the end of that time period you will be able to identify where the bulk of your spending is going, and perhaps even drill down into a potential spending problem. That is when you should really focus and hone in on what your next steps will be.
It is no longer enough to just have a conversation about a budget. You really need to put pen to paper and work through the numbers yourself. Heck, even let a professional do that for you! I remember when I was first going to college and I was writing down every expense that I had and all of my income to figure out how to make ends meet. I remember feeling like I did not have enough income to make a meaningful budget. This left me feeling a little defeated and I did not want to continue working on my budget. But I pressed on anyway, because that is what you have to do. You have to press on in order to meet your goals.
4. Make sacrifices
When all is said and done, living below your means will certainly take some sacrifices. For myself, I have made a point to not eat out all the time. I have made a point to stick to my grocery budget as much as possible during the month. But, also, there is zero shame in shopping at the Dollar Tree! Every month, I make a point to go to the Dollar Tree for my everyday items. This saves me SO much money. Lastly, I have made a point to stay in the apartment that I am living in. This third point is probably the hardest for me right now. I have been wanting to move into a two bedroom apartment so that I can have a dedicated office space, but it does not make sense to me financially right now. Rent these days is a little ridiculous and I cannot imagine myself paying as much as they are asking for a two-bedroom. I have given myself a limit as to what I feel is acceptable to spend on my housing each month, and everything that I have seen over the past year would mean that I would be living beyond my means!
These sacrifices that we make in order to live below our means may not be easy. The way my office space is currently sitting is in my living room, which pretty much cramps my living room space. For almost half the year, I have had my couch in front of a closet because if I had it any other way there would be no room to walk! But, it is these sacrifices that I deal with so that I can live below my means. These sacrifices are conscious decisions that I have to make every single day.
5. Enlist an accountability partner
If you already know that you are not the greatest when it comes to numbers, then find someone who knows the numbers and can help. It does not even have to be a professional. Perhaps you have a trusted friend that can offer insight with an outsider’s perspective. Enlist them to be your budget accountability partner. Offer to cook them dinner and have a budget check-in session together. I have known plenty people who are very smart and capable, but also want that extra set of eyes, or a perspective of an accounting professional that they do not have. I completely and entirely respect that in them, because whether or not we want to admit it we are all human and can also make mistakes. All that to say, I am certainly not perfect and am still on this journey alongside you.
So, together, we can make living below our means socially and culturally acceptable! Who’s with me?!
In the frugal spirit of the upcoming holidays, I wanted to interrupt nonprofit blog series, to bring you insights from my one and only mother! Around the holidays I just absolutely love love love all of the deals and discounts available. In my thoughtful nature, I am already thinking of my family when I am shopping, but, I can't help but get heart eyes when I walk past the new styles and wonderful store sales. I have been known to buy myself a Christmas present (or two) every year as it seems that I convince myself that another discount or offer will not arise! Which, by the way, is absolutely not true. Deals and discounts come around OFTEN!
My mom grew up with FIVE other siblings, three sisters and two brothers. Needless to say they did not have a lot of resources to go around. My grandparents basically had to figure out how to make ends meet, so they became creative. For this reason, I thought what better way to set our expectations and mindset ahead of the holidays than with my mom's 5 frugal living tips! Which by the way are not all necessarily about being frugal, or spending. 3 out of the 5 tips are about side hustling (sound familiar?).
Here's her tips!
1. Frugal Clothing
As a young child we could not afford to buy new clothes, so clothes were given to me. They were mostly hand-me-downs from my sister, or clothes from friends or family. At an early age my mom taught me how to sew. This came in handy when I received the hand-me-down clothes! I would take apart the old dresses that were given to me and then custom design the skirts or dresses to fit me and my style. In this sense it taught me to change things for the better. I felt very creative and self-sufficient in my ability to be practical. Moving forward, I figured out how to make my clothes last for many years because of the skills that I learned growing up. This also is attributable to my weight being pretty consistent through the years, reducing the need to buy new clothes constantly. Also, I do not worry about keeping up with the current trends or styles from other people, because I know my style, and know how to make things look good by accessorizing each outfit.
3. Side Hustle: Hairstylist
I was a hairstylist right out of high school. I worked full time at the salon and also made extra money at home doing hair for family and friends. I made the time enjoyable in that we had a pool and my clients (family and friends) would go for a swim after their haircut. The extra money I earned from the side hustle would pay for utilities, gas, and spending money. I also instilled this work ethic in my daughters’ lives.
4. Side Hustle: Piano Teacher
I took piano lessons at an early age. So, when I became a young mother I taught piano lessons at my home in order to earn extra income for my family. Playing the piano brings me joy and is one of my favorite pastimes. I stopped teaching piano lessons, and now I volunteer my time playing for my dad's retirement home and Senior Center. This is such a fun time for me, and for them as well. I love bringing the gift of music and happiness to those listening.
5. Side Hustle: House Cleaner
When I was pregnant [with you], I helped my mom clean houses. I learned from my mom what a side hustle was because having so many siblings we needed all the extra income we could get! My mom would iron clothes for others at home, and charge per item. Then she would also clean houses to help make ends meet. She taught me how to do this work and I would go with her in order to earn extra income. She instilled these values within me so that I could also be resourceful and frugal.
It was during this point in the conversation where my mom and I had this light bulb moment on how my grandma instilled within both my and my mother's generation the values of resourcefulness, earning extra income on the side, and being frugal.
In fact, I believe what it comes down to is this; the number one thing that my mom has taught me growing up was creativity. I was a very picky eater and did not necessarily like all of the food that was offered to me when I was growing up. My mom basically empowered me, and showed me that I needed to be creative to figure out what I liked so that I could create it myself. Being on a mission, my seven-year-old self would open the fridge and throw together a few items, make up a name for it, and enjoy the fruits of my labor. (Granted, not all my recipes were/are delicious!) The idea that I needed to use what I had on hand, and then go from there is the most very basic Frugal Living tip we could all go by.
This holiday season, I challenge you to first take a good hard look at what you already have on-hand before you make any purchases at the store. Here's my case in point; I literally found a brand new frame in a drawer in my hallway closet. You bet I am going to make that into a present for someone at Christmas! The funny thing is, I have a feeling I am not the only one who has brand new items hanging out in their home. Try your best to take the extra time and save yourself some money (and maybe your sanity too?!).
I want to share a secret with you all.
Here it is.
I absolutely LOVE excel.
It is one of the best things that has happened to me. I live, sleep, eat, and breathe excel.
You may think that I am crazy. Or strange. But, Excel is so versatile I use it almost every minute of every day. Okay, that may be a slight exaggeration.... If you have been shying away from using excel this is your chance to learn the most basic formulas!
Simply type into any cell below: =sum() and then click and drag your cursor so it captures the entire column, and voila! The sum formula will return the total of the cells in a specific range:
The next two formulas have a few variables and may seem complex, but they are pretty easy once you understand what it is used for. For the first formula start typing the formula into any given cell based off a set of data.
Let's say for example this data set has a list of dates and then numbers in the corresponding column. This could be significant for the total amount of expenses for any particular day. So, if we wanted to drill down into one particular date in this data set. Type in =sumif( and then the first part of this formula is going to be the range of dates in the column (or row). Next click and drag your mouse over that column that has the dates.
The second part is to point your formula to the date that you want the value to return. For example, if I only wanted to drill down on the expenses that happened on May 15th I would type in May 15th into one cell, and then have this formula point into that cell. See examples below.
I hope that was super helpful for you all! Excel can be *your* friend too!
I also wanted to prove that it is possible to be a beginner in Excel and be able to use my budget spreadsheets. My current budget spreadsheets are in Google Sheets -- which is very similar to excel, but you can access it anywhere you have access to Google Drive. For example, I have my checkbook register on my Google drive (google sheets) and I can access it at any given point in time on my cell phone. This way I know the exact balance of my bank accounts without having to log onto my bank. This saves me time, which essentially also saves me money.
Stay tuned, friends… I do plan to publish more spreadsheets in the very near future for purchase at an affordable cost! So, if you have not already seen my google sheet budget spreadsheet, you are missing out! Or, you can just go check it out in my blog here. Make sure to read the blog for the special link!
As always, if you find yourself in a bind or are having difficulty with the formulas above do feel free to reach out to me by email or comment below.
My thoughts on numbers, spreadsheets, money, spending, forecasting, budgeting, and everything in between. Read on!
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