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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.
Rich Dad Poor Dad, written by Robert T. Kiyosaki, is one of those personal finance books that I truly believe everyone should read at least once in their lives.
Here’s the deal...If you are an individual who is neutral about personal finances, in that maybe you are able to control your spending, but not able to save as much as you would like. Or, maybe you have a budget, but are essentially breaking even each month. Or, maybe you are on a different side of the spectrum, in that you are struggling financially and are worried about not making ends meet day-to-day. Well, this book is for all of you! I do not think it will single out any class of people, because the concepts, themes, frames of thought, can at any point in time affect any one of us. Not only will this book be enlightening, it may also enrich your life in ways you never thought imaginable, while instilling in you the desire to take charge of your personal finances.
Frames of Thought from Rich Dad Poor Dad
Kiyosaki generally reasons through two frames of thinking when it comes to personal finances. His belief that financial intelligence should be taught at a young age is a frame of thought strong within the book. His argument is that since financial intelligence is not discussed in schools it has more people drowning in debt, and not earning enough income to cover daily expenses, as well as their future expenses. Modern day marketing amongst our culture nowadays has us thinking certain ways about what our “needs” are (which is not inherently wrong), that is not actually doing us any good nor taking our future into consideration. This frame of thought is actually so strong throughout this book it almost feels repetitive.
His second frame of thought discussed in this book is about creating wealth that replenishes itself. That might not make much sense, but think in terms of investing to create a return for yourself in the future. A strong focus of this frame of thought is real estate investing. That is pretty much all I will say on that theme because you really need to read through it to understand the concepts Kiyosaki talks about. Plus, I am not about to say that I know anything about real estate, *thankfully* there are professionals out there that do!
However . . .
Well, the above stated concepts are not actually the direction I want to take this blog post. What I want to do is focus mostly on one paragraph in this book because of two reasons. First, I am not about to ruin this book for you, because I want you to feel intrigued enough to read it. Secondly, I feel like this paragraph speaks to a lot of us and where we are today, financially. It will make sense in a minute, promise!
This paragraph is from page 57 of the book, head over to that page to read the paragraph in context and its entirety. For now, I will break up the paragraph and walk through each phrase. It is my belief that this is the core of what Kiyosaki’s rich dad is teaching in this book.
"To spend your life living in fear, never exploring your dreams, is cruel."
Have you ever had dreams of doing something incredible, but scared of starting towards that partly because you are not financially secure to move forward with it? I agree with Kiyosaki, that mentality of thinking is very cruel. It is almost debilitating. That is why I have felt the need to travel throughout my life. I am hungry for experiences in other countries and cultures. Some of you may feel this same hunger for experiences, but maybe you are spending your life living in fear. Make a plan. Make sure that plan includes travel. Stick to the plan.
"To work hard for money, thinking that it will buy you things that will make you happy is also cruel."
I think we all know that money does not buy us happiness. So, why do we continue living our lives buying tons of stuff, that we are unable to afford and do not have the budget, that we think will make us happy? If you are stuck in this phase of life, take a step back and try to look at the larger picture. Imagine where you could be in 5 years if you had a budget and plan to go along with it. Imagine the people that you want to be beside you. Remember that living within your means is the most optimal, and we should always strive for it.
"To wake up in the middle of the night terrified about paying bills is a horrible way to live."
Sadly, this is true for many people who lack financial intelligence. For those who are too afraid to talk to a professional for help with creating a budget because they just cannot accept (nor admit to themselves) they do not have an understanding of where their personal finances truly stand. The first step is admitting to yourself the truth. The second step is asking for help. Remember, I am just a phone call or email away!
"To live a life dictated by the size of a paycheck is not really living a life."
If you have ever lived paycheck to paycheck you know EXACTLY what this is talking about. It is almost as if the minute you get paid you are already drowning in too many bills that you just cannot dig yourself out of. In turn, this also means that there is no room for fun... So then we create exceptions to the rules in order for us to “really” feel like we are not missing out on life (FOMO, anyone?). Thus perpetuating the cycle of debt, and continuing to drown in these exceptions to the rules. Try to remember that fun does not have to cost a thing. Instead, seek out memories and moments with a loved one.
"Thinking that a job makes you secure is lying to yourself…”
When I was in undergrad and started my very first office job, I will never forget the advice of a colleague; "every job is replaceable" she said to me. I think perhaps she really meant it as an encouragement to validate that I did not need to stay dedicated to that workplace after I graduate. In fact, there is actually no guarantee that our jobs will be there the next day, or week. Companies can quickly decide to close their doors. Unions can quickly decide to go on a strike. Please, please, please create a backup strategy plan for your nine-to-five job. Always keep your resume updated. Your backup strategy can be as simple as saving up three months of living expenses, or maybe it is starting your own side hustle! It does not matter the strategy, as long as there is a strategy in place.
"Please don't let money run your life."
I would love to hear your thoughts and feedback if you have read this book. Even if you have not read the book, and something in this blog post sparked your interest. Comment below, or send me a message!
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?!).
As we head into the holiday season (CRAZY, RIGHT?), now is the perfect time to think about charitable giving for 2018. This is the second post in my series of blog posts where I am featuring nonprofit organizations that I love, in the Los Angeles area! The next organization that I am featuring is Elizabeth House.
From their website, “Elizabeth House is the only 501(c)(3) non-profit organization in the San Gabriel Valley that specifically addresses the needs of pregnant women who also have small children and who lack adequate shelter and prenatal care.” The 501(c)(3) designation is specific to charitable organizations -- and the good news is, your cash donation is tax deductible.
Who is Elizabeth House?
Before this year I had never heard of Elizabeth House. In fact, when I started my research on them I realized their office was a place I had walked by on a number of occasions. Elizabeth House serves the Pasadena community as a residential shelter program for adult pregnant women and their children, for their own health and wellness.
A key factor is their programming. Elizabeth House accommodates six women and four children, and clients may stay between four to six months after their babies are born. “Each woman who enters Elizabeth House participates in our main programs: Case Management, Parent Education, Health Education, Financial Management, Job Skills Training, Therapeutic Services (individual counseling and group classes), and Spiritual/Emotional Health.”
How did I find out about them?
I was connected with Elizabeth House earlier this year, and I will speak more on that connection in a later blog post. Essentially, I have been working with Elizabeth House for the past several months as a financial consultant (skill-based volunteer). Since my professional expertise lies in the area of nonprofit organizations, I am partnering with the President and Director of Development to be their business partner in providing professional financial advice. I am honored and fortunate to be included in these conversations, to come alongside this organization during their season of growth, and knowing how much good they do makes things that much easier.
What do I like about them?
Teaming up with the leaders at Elizabeth House breathes life into me! They are the most gracious and loving humans to work with, which brings me hope. I know that their impact is far and wide, even though I am not directly involved with day-to-day operations. The beautiful thing that captures my attention about Elizabeth House is the mission of the organization, and their goal to house single women who are pregnant, and to provide an education for them during their time of need. Their office is a beautiful craftsman home in Pasadena that has a very welcoming environment.
How do I get involved?
Elizabeth House loves their volunteers, and have a wide variety of areas for you to volunteer. From office assistance, to childcare and babysitting, to transportation. Volunteers are needed for events as well as home repairs. If you decide that you would like to spend time with them in skills-based volunteering or hands-on in different areas that they have available, know that it will bless your heart. Some areas have specific requirements or prerequisites, so make sure to read the website thoroughly first before proceeding. They accept donations in various forms as well, like furniture and home decor. I would recommend connecting with Elizabeth House to understand what needs they have before donating any new items.
Additionally, if you would like to financially support them that would be the very best way you can help. This year is coming to a close rather quickly and to help meet their budget goals a monetary donation is of the utmost importance.
Additionally, they are having an annual fundraiser coming up! The Garden Party is October 21st. Visit Elizabeth House’s Facebook page to watch the video highlights from last year’s garden party. It looked like such a lovely time!
My thoughts on numbers, spreadsheets, money, spending, forecasting, budgeting, and everything in between. Read on!
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