Talk to Kids About Money: How to Teach Your Kid to Buy Stuff

Welcome to The Finance Gym Action Plan for a Better Life with Money Video Series. My name is Stacey Powell, and if you’re ready to not just know better with your money but do better, you’ve come to the right place. Today I’m going to teach you about how to teach your kids about buying stuff.

If you watched the last video, we were talking about how we would probably make better spending decisions as adults if our parents had spent more time on how to better plan for teaching us how to buy stuff when we were kids. I don’t want to make that same mistake. So I didn’t always do it right, but I was very mindful about teaching my daughter when she was growing up, and I want to teach you three of the things that you can do to help teach your kids about buying stuff.

Number one, have a plan for when they ask for something when you’re out shopping. Don’t just buy something right then when they want it. Take them back home. Talk to them about where the money is going to come from. Can they earn it? Do they have an allowance? Do they have a plan for their spending allowance? How much does it cost? Look at some of those kinds of questions that I’ve taught you to ask yourself and have them think about it.

If they weren’t going to buy that one thing with their money, what else would they buy? Go over some of those decisions and even if it’s a $5 toy and I’m completely serious. Talk to them about this $5 toy because what you’re doing is laying the groundwork for when they want to buy a $60 computer game or a $400 smartphone or their first starter car or when they want to buy their college education which they’re probably going to buy partly with you. You want them to have that groundwork of practicing with small things.

The second thing you want to teach your kid is how to put together a spending plan. If you’ve got a vacation coming up, sit down on a family night over ice cream and talk about that vacation and what you’re going to do, where you’re going to go and where you’re going to have to spend money.

If they’re teenagers, they’re old enough to do a bunch of the internet research probably better than you and put that spending plan together. Have them do it. If they’re younger than teenagers, then sit with them and go through parts of it, the simple stuff. How much are tickets to Disneyland? Make it fun. Include your kids in this. Don’t make it dull.

The third thing is there are parts of your spending plan that have everything to do with your kids. I want you to incorporate them in those decisions. If they have a clothing budget every month, let them know how much it is. What I did with my daughter when she was young was around summer camps. We had a set amount of money and summer camps is the kind of thing that you can send thousands of dollars on, and so she had a budget, and she looked at the thing she wanted to do and made some balanced decisions about whether it was going to be horse camp year or tennis year or swimming year. She would choose. We made her an active participant in that, and hopefully she learned something from it.

So those are a few ways that you can teach your kids how to buy stuff. If you want to come chat with me about ideas you have with teaching your kids, come join our Facebook group Team Do Better. It’s a private group where only people that are working on doing better with their money are at. You can also join our weekly newsletter list at www.TheFinanceGym.com and don’t forget to subscribe below to our video series, so you will know when they come out. Now go have a conversation with your kid.

Budgeting Should Start With Dreams and Goals

Welcome to the Finance Gym Action Plan for a Better Life with Money Video Series. My name's Stacey Powell, and if you're ready to not just know better but do better with your money, you've come to the right place.

Today we're going to talk about budgeting, but probably not the kind of budgeting you've ever heard about before. We're going to talk about starting your budgeting with dreams and goals.

I love budgeting. As an accountant, I've done budgeting forever. With other people's money, with other business owners money, lots and lots with my own. It's kinda second nature for me. And it's fun and something I'm really good at.

But back when I was really, really, really struggling with my money and asking other people for help. I was told to do something with my budgeting that seemed absolutely ridiculous to me. I was told to put together an ideal budget. Which I thought was the most ridiculous idea in the whole world. I was just struggling to pay my electricity bill every month, haveing enough money for the absolute necessities. And they wanted me to put together an ideal budget? Like what good was that gonna do?

But if there's one thing I am, it's compliant, and when I'm being coached in an area, I will do what I'm told even if I think I'm smarter than the person coaching me.

So that's what I did. Sat down and put together an ideal budget. Which meant I was budgeting for stuff that I had never budgeted before ... vacations, reserves. I specifically remember getting into an argument about concerts. It's not that I don't like music, I do. But it seemed to me at the time really irresponsible for me to be setting aside money to go to concerts when I wasn't keeping up with my obligations that I already had.

But their point to me was, just do it. Put your ideal life down. Put down what it is you want to be living with. And so I did, you know, and they were right. I like going to concerts.

And there was a lot of other things that I wanted in there. Disneyland went in there. I hadn't taken my daughter to Disneyland for years. And you know, not that you can raise a kid, and it's going to be the end of the world if they don't get to go to Disneyland. But I live in California, it's kind of important, right? And why wouldn't I be, why wouldn't that be a part of my spending plan.

You know what I learned about that ideal plan. The epiphany that I had was that when we create these budgets around our actual expenses, our actual obligations, it's all about constriction and fitting in what we have to do and nothing about our future, our dreams, our goals. When I had this ideal budget sitting there, that was way out of what I was able to do at the time, a couple of different things happened to me...

1. It made me realize I was not living the life I wanted to live. And there was no amount of tightening my budget anymore. My problem was income. And so it really helped me focus on the fact that I didn't need to be looking at those expenses. What I needed to be looking at was growing my income, and so I started working on that.

The other thing it made me realize is that you're going to spend a lot more time focusing on your money if the things you're focusing on are things you're excited about. I was excited about vacations. I was excited about Disneyland. I was even excited about reserves. Not that so much, you get excited about reserves but, I was excited about the idea that next time something serious happened with my car, I was going to have money to pay for it without using a credit card or making a call to the bank of Mom and Dad or where ever I would call.

So that's the thing that happened for me, that was my big epiphany, and I promise you if you sit down and roll your sleeves up and do this ideal budget you're going to have an epiphany about your financial life as well. It'll be different than mine, I don't know what it will be, but I promise you if you do it before you do your actual budget you're going to learn something, and I think it will be something of value.

Now at the end of all of these videos I remind you to please not do it alone. This is kind of a big chunk of work. And so if you have somebody who is all about your future and your dreams, ask that person to sit down with you and do this ideal budget.

If you'd like to join the community where there's other people working on this right along side you there's a few places you can go.

1. Is over at Facebook. We've got Team Do Better Group. It's completely private the only people in there are people who are also working on their money.

You can also sign up for our newsletter at thefinancegym.com.

Or you can subscribe to the YouTube channel.

Thanks for watching.

Telling The Truth

Many experiences in my career explain my evolution to becoming a “Money Wise Woman." My tenure at Coopers & Lybrand (now PwC), my time at the financial helm of CARES, an agency that I helped grow from $500,000 to $3 million in three years, and the past 13 years I’ve advised, coached and counseled hundreds on their business and personal finances at Creating Answers.

But those experiences aren’t why I’m a Money Wise Woman. There was a point in my life that I awoke to the fact that I had placed myself in serious financial trouble, and that’s when I started telling the truth about it.

Even with all I knew, and no matter how hard I tried to get myself out of it, for whatever reason, I couldn’t. That’s when I started seeking more answers. And not just from fellow financial professionals, but from coaches, mentors and counselors. And that’s when I had my big “ah ha” moment, when I realized what keeps so many people stuck in their financial lives.

We don’t tell the truth. We don’t talk about money, so we have no opportunity to tell the truth about it. There are few places to go when you feel stuck with your money and don’t know what to do. When you’re a financial professional, it's even scarier. I was stuck in denial, fear, shame and blame. Having the courage to start telling the truth made all the difference in the world.

For years, I had many clients who didn’t want to take the time to talk to me about their money. I was their accountant, and it just wasn’t a priority for them. Now it’s a cornerstone of my practice that every client talks to us about their finances every month. It makes a marked difference in their financial clarity, and their financial peace.

My advice to those of you who feel stuck in some area of your financial life: Talk to someone consistently and productively. Your bookkeeper, your accountant, a coach, a trusted mentor, a trusted colleague. Draw a circle of support around you, tell the truth, and create some accountability in your financial life. It will make all the difference.

-Stacey Powell

click here for Stacey's blogs on Forbes.com

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups.
We teach. We inspire. We support. We help people change their lives by improving their finances.

15 Days til New Year's Eve...The Time is Now

While everyone else is busy counting days until Christmas, accountants are busy counting days until New Year's Eve. And here’s why:

Do you itemize your deductions? If yes, look at your spending plan for charitable contributions. You have 15 days to maximize your gifts. Plus your favorite nonprofits are busily trying to meet their year-end goals, so gifts that come in during December are hugely appreciated! Have you spent out your Health/Flexible Spending Accounts? Now is the time.

Are you a business owner? If yes (and you file cash basis) then every dollar you spend in the next 15 days saves you in the neighborhood of 25 to 40 cents. Our advice to clients at year end: Any equipment you plan to buy in the next six months, buy it now. Any bills scheduled to pay at the beginning of January? Pay them now. And on the income side, for every dollar you put in the bank, you’ll be sending 25 to 40 cents to the IRS on April 15th. This is the one time of year you ease up on your receivables calls, slow down your invoicing process, walk to the bank very slowly.

And for my nonprofit clients? You have 15 days to maximize contributions for the year. Call one key donor every day until the 31st. You can ask for support, or just wish them a happy holiday and thank them for their support. Craft one last personal email solicitation. People want to give this time of year, and it’s your job to remind them.

Happy New Year!

(The accountant’s disclaimer: this is clearly generalized advice. It's something to be discussed with your trusted advisor. If you don’t have a trusted advisor, we know some great ones!)

2011: Is your plan in place?

Winter is a time of reflection, both personally and for our businesses. How did this past year go? Did I meet my goals? Um, did I have goals? What do I want next year to look like? What do I have to do to get there?

At Creating Answers, it is the time of year we are busy working with all of our clients on 2011 goals and budgets. It is one of my favorite times of the year because you get to do two really fun things: analyze how last year went, and draw the financial road map to follow next year. It's financial art at its most fun.

If you think of this work as a chore, I invite you to reframe your beliefs about planning and numbers. I invite you to think of it as a game, or a puzzle. Make it a date with yourself. Go to your favorite coffee house, or pour yourself a bottle of fine wine. And then...start asking yourself questions.

What percentage of your total income goal did you reach this year? 120%? Great! 85%? Not so great. What do you need to do differently in 2011? What amount of marketing dollars would have closed that 15% gap? Do you need to increase your networking time? Upsell existing clients? Raise your prices?

“If you think of this work as a chore, I invite you to reframe your beliefs about planning and numbers.”

Take a look at your discretionary areas of spending? How much did you spend on marketing and advertising? What were the financial results? Professional development? Results? Equipment? Results?

How much did you spend on staffing and/or outside consultants? Did they work at capacity? Did you generate revenue from your staff? How much? A great rule of thumb to start with is three times their cost.

While it is difficult to assign numbers to each of those questions, the exercise of trying will create answers. What if you spent nothing in each of those areas? What if you spent three times as much?

Most importantly, don’t overdo the process. It’s more effective to do a really thorough look at your 15 most critical spending areas consistently than it is to look at all 60 of the expense accounts you have in Quickbooks. (And if you have 60 expense accounts in Quickbooks, you should give us a call!)

Find out more about what we do at http://CreatingAnswers.com.

Here's to a prosperous new year full of financial clarity!

Holiday Financial Clarity

Want financial clarity for the holidays?

Entertaining, stocking stuffers, extra travel expenses, cookies for the neighbors, decorations, office holiday party gifts, holiday grocery shopping and of course, presents… these are just a smattering of expenses that are about to edge their way into your spending plan over the next several weeks.

Whether you’ve been saving all year, plan to squeeze it into your regular monthly spending, plan to not partake in any of it, or have a credit card you use for the holidays, now is a good time to make a plan. Even if you don’t stick to your plan completely, just spending the time to fill out this handy holiday plan will provide you a road map for the trip you are about to take.

What are your priorities? What are your limits? What are your expectations?  How do you feel about the money you’ve spent during past holidays?  What could you do differently? And a favorite question from our Financial Boot Camps, what would your hero do?

 Print the “Manage Your Holiday Spending” guide from the AFSA Education Foundation. Take a walk, think it over, journal the above questions if you’d like, then get a pencil and a calculator and make your plan!

And… enjoy the season.

Stories Are Gifts... Share!

Starbucks has a new tagline on their holiday cups: Stories are gifts…..share. What a great reminder that sometimes the most meaningful gifts don’t cost money. As we near the season of gift giving, I hope that this sentiment is taken to heart.

What if we all gave the gift of a story this year?

I heard that stores are opening not just at 5am on Black Friday, but on Thanksgiving Day itself. One more step toward the commercialization of what is meant to be a time of family, friendship, and for many, faith.

When people talk to me about the holidays, they often talk about the season with a sense of financial dread, or disappointment in themselves that they didn’t set aside a holiday fund…again, or about the credit card bill they know will be coming in January. They talk about not wanting to disappoint their children, about the expectations placed on them in their workplace, or about “this is how my family has always done it.”

If you hear yourself in any of the above, make a commitment to do it differently this year. Completely different, or just a little different. Here are some ideas:

• Give the gift of a story: the day your child was born; a fun experience with a good friend; how a coworker has inspired you.


• Give the gift of an experience, rather than a thing: a walk along the river; a Sunday morning brunch; a drive to the mountains.


• Give the gift of memories: old family pictures; old family movies; old family recipes. (One of my most treasured gifts is a recipe book from my mother of favorite recipes and notes with each one about which family friend first introduced us to the recipe.)


• Get your family to draw names. Or better yet, my unique neighbors instituted a family tradition of CrapMas. They each scour their homes for items that they no longer use, but know that someone else might find of value, and then do a sort of live auction based on who declares they need it or want it the most. They have great, great fun with it.


• Give the gift of service: spend the holiday serving others at a homeless shelter.


• Give the gift of self-esteem. I asked some important people in my daughter’s life to share a word or a sentence about how people see her, and then I compiled them in a book. $8 at ritz.com and….priceless.

What ideas do you have?

 -Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

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