One of my favorite bloggers posted something like this and I got to wondering if I could possible come up with 25 things- well, here you go!
1. My middle name is Peralta,
2. It used to be Martinez.
3. I was a mariachi when I was younger. No, you will never see a picture.
4. I have more dresses than most people have clothes. No, you haven't seen them all.
5. My favorite designers are Kate Spade, Adrianna Pappel, and Eliza J.
6. I will be a millionaire by the time I'm 40.
7. Yes, I have a plan. :)
8. I'm allergic to almost everything! If I ever go down in front of you there is an
epi-pen in my purse.
9. My pet peeve is lazy people.
10. I almost always have a packet of fruit snacks in my purse.
11. My life is a musical- we sing to wake up, go to sleep, eat, go up the stairs, down
the stairs, clean- you get the picture...
12. I'm extremely girly, but I can still use a hammer.
13. My first car was a Toyota.
14. My greatest ideas come in my sleep- usually at 3 am.
15. I sleep with a pen and paper next to me- for that reason.
16. I like my house clean, but my car is almost always dirty.
17. My favorite color is royal blue, followed by plum.
18. I sew, and garden for relaxation- yes, I realize how boring this makes me.
19. Decisions I make are almost always Bible or financially based.
20. I cut every one's hair in my family- including the dogs- this saves us about
$1000/year!
21. I can remember the price of almost anything I have ever bought.
22. I don't remember most of anything else, including what I wore yesterday.
23. I have never had a drink of alcohol, smoked, or done anything questionable much less illegal.
24. I don't think enough people smile so I try to do my part and smile at or compliment
everyone I meet. This drives Kiohud nuts because I end up with admirer's...
25. I LOVE, LOVE, LOVE polka dots!!!
This was surprisingly easy for me to do. I think this is in part because I am such a hermit and don't usually share much about myself with anyone... If anything, hopefully this amused you for a little part of your day! Feel free to comment and tell me something(s) I dont know about you! :)
Tuesday, August 21, 2012
Monday, August 20, 2012
The Auto Refi
One of biggest complaints when leaving the auto lot is you got a good car, bad loan. Auto dealer finance departments know that you are too excited about that new car or the price to worry about the interest, or term of the loan. Before you know it you have a bad loan, with a huge payment and terrible rate! Good news, you can usually do something about that!
Auto Refinance
Auto refinance is simply a loan that pays off your auto loan. The loan has new terms and is usually done to either lower your payment, lower your interest, or both. Refinancing your loan for a lower payment will generally extend your term, (more interest) but can make that car a lot more affordable. Lowering your interest will usually lower not only the amount of interest that you will pay over the life of the loan but lower your payment as well.
DetailsAn auto loan is usually one of the easiest loans you can qualify for, the application can be done over the phone and a qualification can be given as quickly as a few minuets. Auto loan terms are commonly from 36 all the way to 72 months. The lowest amount any company will refinance is generally $7,500 and the most $75,000.
Will there be a fee?
There is generally no fee to refinance your auto IF you are using a reputable company. There may be small fees for example to transfer title but they should be very small in comparison to the amount of money you are saving.
Warnings!!!
The auto refinance is NOT for everyone! A refinance should never be an impulse buy. I recently walked into my bank and my personal banker went into this whole bit about how much money I could save without ever pulling my credit or knowing the specifics of my current auto loan. The truth is personal bankers and tellers are there to make money for the bank. Don't believe me? I used to hire them! With that said, never leave the bank with something you didn't go intentionally go in for. DO YOUR HOMEWORK! Also, only take out the amount you need to pay off your auto loan. Many bankers will try to get you to pay off other debt or give you spending money using the equity you have in your auto. This makes the amount of the loan bigger (more commission for them) but leaves you with a bigger auto loan which equates to more overall interest. I have seen to many people that should have cars paid off in real financial trouble or even lose their cars because of this.
My Views
While the auto refinance may be a great option for some, it is not for everyone. Remember to do your research before you make any financial decisions. Compare rates, terms, and fees to make sure you are getting the best deal out there. I am always an advocate for my local credit union which usually has not only the best rates but a real person I can yell at if I need to!
Good luck my friends! :)
Auto Refinance
Auto refinance is simply a loan that pays off your auto loan. The loan has new terms and is usually done to either lower your payment, lower your interest, or both. Refinancing your loan for a lower payment will generally extend your term, (more interest) but can make that car a lot more affordable. Lowering your interest will usually lower not only the amount of interest that you will pay over the life of the loan but lower your payment as well.
DetailsAn auto loan is usually one of the easiest loans you can qualify for, the application can be done over the phone and a qualification can be given as quickly as a few minuets. Auto loan terms are commonly from 36 all the way to 72 months. The lowest amount any company will refinance is generally $7,500 and the most $75,000.
Will there be a fee?
There is generally no fee to refinance your auto IF you are using a reputable company. There may be small fees for example to transfer title but they should be very small in comparison to the amount of money you are saving.
Warnings!!!
The auto refinance is NOT for everyone! A refinance should never be an impulse buy. I recently walked into my bank and my personal banker went into this whole bit about how much money I could save without ever pulling my credit or knowing the specifics of my current auto loan. The truth is personal bankers and tellers are there to make money for the bank. Don't believe me? I used to hire them! With that said, never leave the bank with something you didn't go intentionally go in for. DO YOUR HOMEWORK! Also, only take out the amount you need to pay off your auto loan. Many bankers will try to get you to pay off other debt or give you spending money using the equity you have in your auto. This makes the amount of the loan bigger (more commission for them) but leaves you with a bigger auto loan which equates to more overall interest. I have seen to many people that should have cars paid off in real financial trouble or even lose their cars because of this.
My Views
While the auto refinance may be a great option for some, it is not for everyone. Remember to do your research before you make any financial decisions. Compare rates, terms, and fees to make sure you are getting the best deal out there. I am always an advocate for my local credit union which usually has not only the best rates but a real person I can yell at if I need to!
Good luck my friends! :)
Wednesday, August 15, 2012
Harp 2.0- Is it for you?
One of the many things we have been working on is refinancing our home. We bought this home at just about the worst time, and so our loan to value (amount of your loan vs. the amount the home is worth I will now call this LTV) went from being 80% to about 200%- yes, that is REALLY bad! Anyways, since we make enough to cover the loan that we initially took out our mortgage company is not willing to do any kind of modification. We applied for a modification since we could not do a conventional refinance and were immediately shut done because we are current on our payments and we can afford our home. Home modifications usually include lowering payment, interest, term, or balance, you do have to show some kind of hardship or that you can not afford your payment- we can provide neither. I set out in search of another way, mortgage rates are at a low and I would really like to take advantage of that. What did I find? The Harp 2.0- looks like this may be our answer so maybe this will help you!
What is the Harp 2.0?:
Harp stand for Home Affordable Refinance Program and is a program set up by the government to help people that like us, have no equity in their homes, but would like to refinance.
Do you qualify?:
I found this criteria on HARP's site:
The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
The current loan-to-value (LTV) ratio must be greater than 80%.
The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.
Our process so far:
First, we had to see if our loan was FreddieMac or Fannie Mae. (links provided) It was, this is important because you can not refinance under this program unless you are one or the other. Next, we called out local federal credit union to apply, you can also contact your mortgage provider to see if they offer the Harp 2.0. Application was really quick over the phone and I was pre-approved in about 5 minutes. My loan officer gave me a list of document to fax in; taxes, w2's, pay stubs, home owner's insurance, and bank statements. I was relived to find out that ours could be done without my business income (always a headache), and because of our high credit score we did not need an appraisal. After, they verify that everything matches up in underwriting our loan will be approved. We are set to sign at the end of the month.
My thoughts:
While not as low as a modification that would be offered for hardships, this really is a great option. For us, our new loan is at the best rate available 3.5 and keeping our same term will reduce our payments $300/month! We also have the ability to keep at the normal payment and pay off about 5 years sooner or for a few hundred more pay off about 10 years sooner! The process has been extremely easy and while we still have quite a balance on our home, this does make me feel that there is an end in site! Most of all, I am pretty excited that we finally qualify for something!!!
So, this is what we have been though so far- I will keep you posted on how it turns out! Hopefully, this information can help you save some money as well! :)
What is the Harp 2.0?:
Harp stand for Home Affordable Refinance Program and is a program set up by the government to help people that like us, have no equity in their homes, but would like to refinance.
Do you qualify?:
I found this criteria on HARP's site:
The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
The current loan-to-value (LTV) ratio must be greater than 80%.
The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.
Our process so far:
First, we had to see if our loan was FreddieMac or Fannie Mae. (links provided) It was, this is important because you can not refinance under this program unless you are one or the other. Next, we called out local federal credit union to apply, you can also contact your mortgage provider to see if they offer the Harp 2.0. Application was really quick over the phone and I was pre-approved in about 5 minutes. My loan officer gave me a list of document to fax in; taxes, w2's, pay stubs, home owner's insurance, and bank statements. I was relived to find out that ours could be done without my business income (always a headache), and because of our high credit score we did not need an appraisal. After, they verify that everything matches up in underwriting our loan will be approved. We are set to sign at the end of the month.
My thoughts:
While not as low as a modification that would be offered for hardships, this really is a great option. For us, our new loan is at the best rate available 3.5 and keeping our same term will reduce our payments $300/month! We also have the ability to keep at the normal payment and pay off about 5 years sooner or for a few hundred more pay off about 10 years sooner! The process has been extremely easy and while we still have quite a balance on our home, this does make me feel that there is an end in site! Most of all, I am pretty excited that we finally qualify for something!!!
So, this is what we have been though so far- I will keep you posted on how it turns out! Hopefully, this information can help you save some money as well! :)
Monday, August 6, 2012
Change is upon us!
I finally found time to blog!!!! Ok, ok, not at the hour I planned but we are still adjusting our new schedule. I've been away from blogging for so long it feels like I have way too much to catch up on- so I'll do my best to summarize!
Summer:
Despite the heat, summer is one of my favorite times of year. The whole family is home and so extra hands plus no commuting makes the work fly by and leaves us with lots of time to play! We got out of town a few times this summer but mostly took advantage of local places for fun, it was really a wonderful break with tons of family bonding!
Back to school:
For some one like myself that hates change- we sure have a lot this school year! To start- this year is the first time that ALL of my children will be in school!!!! Cecelia and Emily were both accepted to ASU Prep. Jacob will be at Faith North at the end of August and Hannah will start at the end of September when she turns 3. This has us on a pretty crazy schedule (keep in mind both schools are downtown about 25 mins away) Everyone goes in at the same time but Jacob and Hannah will get out at noon, Emily at 3:30 and Cecelia 4:10 or 5:45 when she has sports. (See why I love summer!? ) Thank God we have figured out a pretty good carpool system so I may not have to commute as much as last year!
Financial Changes: Business changes, selling properties, changes in leases, and hopefully buying a much needed new car- we have lots we still would like to do this year!!! Once I find the best way to do them I can share it with you and hopefully save you some hard earned cash!
I think that is all for now my friends. I would like to ask you: Many of you have sent me requests for blogs on specific financial topics, please resend your ideas either by comment on the bottom or you can message me- I have no idea what I did but I some how deleted the folder I had them in!
I'll be back soon friends- this time I promise!!! :)
Summer:
Despite the heat, summer is one of my favorite times of year. The whole family is home and so extra hands plus no commuting makes the work fly by and leaves us with lots of time to play! We got out of town a few times this summer but mostly took advantage of local places for fun, it was really a wonderful break with tons of family bonding!
Back to school:
For some one like myself that hates change- we sure have a lot this school year! To start- this year is the first time that ALL of my children will be in school!!!! Cecelia and Emily were both accepted to ASU Prep. Jacob will be at Faith North at the end of August and Hannah will start at the end of September when she turns 3. This has us on a pretty crazy schedule (keep in mind both schools are downtown about 25 mins away) Everyone goes in at the same time but Jacob and Hannah will get out at noon, Emily at 3:30 and Cecelia 4:10 or 5:45 when she has sports. (See why I love summer!? ) Thank God we have figured out a pretty good carpool system so I may not have to commute as much as last year!
Financial Changes: Business changes, selling properties, changes in leases, and hopefully buying a much needed new car- we have lots we still would like to do this year!!! Once I find the best way to do them I can share it with you and hopefully save you some hard earned cash!
I think that is all for now my friends. I would like to ask you: Many of you have sent me requests for blogs on specific financial topics, please resend your ideas either by comment on the bottom or you can message me- I have no idea what I did but I some how deleted the folder I had them in!
I'll be back soon friends- this time I promise!!! :)
Thursday, June 21, 2012
Vacation! You need it- and you can probably afford it! :)
Well, it's been about a month since the kids have been on summer break and at least that long since I have gotten a break to blog!!! What have we been up to at the Sanderson home? Well, trying to keep 4 kids entertained and from killing each other is no easy feat! I have employed Cecelia and Emily for the summer- in return they get a few outings a week and what they are looking forward to the most- a summer trip! This has turned into a win-win for everyone. It keeps them from being bored, it helps me stay on top of the business and house, and we all get to go on field trips every week! :)
If you live here in Arizona, it is HOT! We all want to get out of town but I keep hearing the same thing- we can't afford a trip this year! If you actually can't afford that little break I can totally understand and we too have postponed a few family trips in order to "get ahead" but if you have a few dollars to spare here are a few tips for making that trip affordable!
Stay-cation!- We went camping about a month ago and it's amazing what a difference that 2 hours out of town makes! Temperature changes, change of scenery, and I have to say that camping- even though I am not an "out-doorsy" girl was the most inexpensive trip I have ever taken my family on! If you don't want to "rough" it just hit some cooler temps and get an inexpensive hotel.
Hotels, hotels, hotels- For any trip, your biggest expense will probably be your hotel- but it doesn't have to be! Sites like hotels.com, priceline.com, hotwire.com (one of my favorites), expedia.com, and many many others have made staying at that hotel pretty inexpensive! Tips: 1. I had always heard to book well in advance, on our last trip I did the opposite and waited to the last second and scored amazing deals! Our 2 star rooms ended up at about $30-$40 per night (unless you're on your honey moon, you probably wouldn't be in there much anyways)! 2. Make sure there are no extra fees! When we stayed in San Fransico and San Diego we had to pay an addition $25/night in parking fees! We now call ahead of time and confirm that there will be no additional fees.
Food- Learn to love the complimentary breakfast! These usually consist of bagels, pastries, cereal, waffles, eggs, and juice, coffee, milk, etc. not all hotels offer this. When you have a family of 7, this saves you about $80/ day for the same food you would be getting at Denny's! Pack food! Not only will this be better for your waistline, packing sandwiches and other to-go food and snack can save you $$ from eating out all of the time! So with breakfast and lunch out of the way- and a little healthier, you can afford to splurge a little on dinner!
Buy tickets online- for your favorite attractions, buying ahead can usually save you a good amount of cash. Extra tip: you can usually find coupons on ebay.com for some extra savings! Yes, eBay really does sell pretty much everything! Also, check your current memberships- you may be able to get free or discounted admissions with them. For example: Our science center membership allows us into museums and science centers in every state for free!
Don't forget to fuel up with your gas points rewards, which by the way now has us paying only $40 to fill up BOTH cars! (Kroger's upped their gasoline promotion to $2 per gallon, AWESOME)!
Hope this helps get you out of town and keeps you from going CRAZY with all of the kids at home! Have FUN! :)
If you live here in Arizona, it is HOT! We all want to get out of town but I keep hearing the same thing- we can't afford a trip this year! If you actually can't afford that little break I can totally understand and we too have postponed a few family trips in order to "get ahead" but if you have a few dollars to spare here are a few tips for making that trip affordable!
Stay-cation!- We went camping about a month ago and it's amazing what a difference that 2 hours out of town makes! Temperature changes, change of scenery, and I have to say that camping- even though I am not an "out-doorsy" girl was the most inexpensive trip I have ever taken my family on! If you don't want to "rough" it just hit some cooler temps and get an inexpensive hotel.
Hotels, hotels, hotels- For any trip, your biggest expense will probably be your hotel- but it doesn't have to be! Sites like hotels.com, priceline.com, hotwire.com (one of my favorites), expedia.com, and many many others have made staying at that hotel pretty inexpensive! Tips: 1. I had always heard to book well in advance, on our last trip I did the opposite and waited to the last second and scored amazing deals! Our 2 star rooms ended up at about $30-$40 per night (unless you're on your honey moon, you probably wouldn't be in there much anyways)! 2. Make sure there are no extra fees! When we stayed in San Fransico and San Diego we had to pay an addition $25/night in parking fees! We now call ahead of time and confirm that there will be no additional fees.
Food- Learn to love the complimentary breakfast! These usually consist of bagels, pastries, cereal, waffles, eggs, and juice, coffee, milk, etc. not all hotels offer this. When you have a family of 7, this saves you about $80/ day for the same food you would be getting at Denny's! Pack food! Not only will this be better for your waistline, packing sandwiches and other to-go food and snack can save you $$ from eating out all of the time! So with breakfast and lunch out of the way- and a little healthier, you can afford to splurge a little on dinner!
Buy tickets online- for your favorite attractions, buying ahead can usually save you a good amount of cash. Extra tip: you can usually find coupons on ebay.com for some extra savings! Yes, eBay really does sell pretty much everything! Also, check your current memberships- you may be able to get free or discounted admissions with them. For example: Our science center membership allows us into museums and science centers in every state for free!
Don't forget to fuel up with your gas points rewards, which by the way now has us paying only $40 to fill up BOTH cars! (Kroger's upped their gasoline promotion to $2 per gallon, AWESOME)!
Hope this helps get you out of town and keeps you from going CRAZY with all of the kids at home! Have FUN! :)
Wednesday, May 16, 2012
Financially Savvy Children
The National Council on Economic Education conducted a recent survey with high school students. The results were significant. Two-thirds of those tested on basic money skills scored an “F.” Only 3 percent scored an “A.” To me this is a pretty sad fact. Our children are our future and we need them to be financially responsible. Another recent study shows that 10% of all bankruptcies are filed by 18-25 year olds. So what can you do to teach your children about financial responsibility? Here are a few tips:
Start early!: Studies have shown that by age 13 children's spending habits are in place. That means we have to teach our children very early on about finances. Start as soon as possible, and get good habits in place.
Teach them the value of a dollar: Last blog I talked about allowance. Take your children to the store that way he sees what that money can actually get him. DON'T CHIP IN! As parents we generally want to give our children everything but in this case the value of learning that he can't have it all will go much further.
Give them goals: That big-expensive toy in the store every kid "oohhhs" at- make that the goal! You can buy that WHEN you save for it. For Emily, it was the $100 doll house at Costco. She saved and saved and she appreciated it much more when she was finally able to walk in and pay the cashier for her own Barbie Dream House! She had a sense of accomplishment, appreciated that house a lot more, and learned the value of working for what you want.
Teach them to budget allowance: Allowance budget should look like this: 10% tithe 10% saving 10% big "want" 70% to spend. Teaching your children to plan for the future will only help them in the long run. The 10% saving they can use when they are older to help buy a car or bigger purchase. They will appreciate it later- I promise!
Teach them to work for their money: Chores, extra jobs, and even a small business like an old fashioned lemonade stand can help with this task. Emily (usually my example because she is ridiculously good with money) opened an art shop- there was a sign that said "pictures on the left $1, pictures in the right $2, no phony money, no checks!" When I asked she said- well, I work really hard on my art don't YOU think I deserve REAL money? She did deserve real money, and she learned the art of having her first real income earning business!
Teach your child to TITHE: Yes, I said it! Most of you may not believe in tithing but it really works! Test God with the 10% and the rest will go further. If you don't believe me- millionaires are usually the biggest givers out there and the tax benefits are bonus! The very first time I taught Emily on tithing and how God had always provided for our needs she emptied the contents of her piggy bank and took it in to Sunday school. (I had no idea she did this) Later that evening my mom asked her to clean the bathroom (a $2 job) and them gave Emily $20. I was pretty upset because I was trying to teach Emily that 1 bathroom equates to $2, so I went to talk to my mom about it. My mom said "Sophia, I don't know why but I was going to give Emily the $2 and I had to give her the $20. When I handed Emily the $20 Emily looked at me amazed and said- my mom was right it does work! She told me that you had taught her to tithe the day before!" Talk about conviction! I don't always know how but I swear it works!
Lead by Example: It's no secret that your children will imitate most things you do and finances are no exception. Handle your finances in a way that is responsible and chances are your children's actions will follow.
My last bit of advice is not for everyone, actually a lot of people will probably disagree with me on this one. Let your children help you balance your family budget. Why am I such a believer in this system? Well, when I was little my mom had problems with her vision so I would help her budget her checkbook. To a kid $1000 looks like $100000 (I think they add a few zeros to everything!) but if they see you have $2000 in your bank account and then they see the $1000 mortgage, auto payments and everything else come out, they will see how fast money does go! This will also teach them that there is no "money tree" and that money that you use from that debit card, you have to put money in first! It's not a 'magic' card. I learned this lesson REALLY early on in life and have been money conscious ever since!
Hope this can help steer you into raising financially fabulous little humans! :)
Proverbs 22:6 “Train up a child in the way he should go: and when he is old, he will not depart from it.”.
Start early!: Studies have shown that by age 13 children's spending habits are in place. That means we have to teach our children very early on about finances. Start as soon as possible, and get good habits in place.
Teach them the value of a dollar: Last blog I talked about allowance. Take your children to the store that way he sees what that money can actually get him. DON'T CHIP IN! As parents we generally want to give our children everything but in this case the value of learning that he can't have it all will go much further.
Give them goals: That big-expensive toy in the store every kid "oohhhs" at- make that the goal! You can buy that WHEN you save for it. For Emily, it was the $100 doll house at Costco. She saved and saved and she appreciated it much more when she was finally able to walk in and pay the cashier for her own Barbie Dream House! She had a sense of accomplishment, appreciated that house a lot more, and learned the value of working for what you want.
Teach them to budget allowance: Allowance budget should look like this: 10% tithe 10% saving 10% big "want" 70% to spend. Teaching your children to plan for the future will only help them in the long run. The 10% saving they can use when they are older to help buy a car or bigger purchase. They will appreciate it later- I promise!
Teach them to work for their money: Chores, extra jobs, and even a small business like an old fashioned lemonade stand can help with this task. Emily (usually my example because she is ridiculously good with money) opened an art shop- there was a sign that said "pictures on the left $1, pictures in the right $2, no phony money, no checks!" When I asked she said- well, I work really hard on my art don't YOU think I deserve REAL money? She did deserve real money, and she learned the art of having her first real income earning business!
Teach your child to TITHE: Yes, I said it! Most of you may not believe in tithing but it really works! Test God with the 10% and the rest will go further. If you don't believe me- millionaires are usually the biggest givers out there and the tax benefits are bonus! The very first time I taught Emily on tithing and how God had always provided for our needs she emptied the contents of her piggy bank and took it in to Sunday school. (I had no idea she did this) Later that evening my mom asked her to clean the bathroom (a $2 job) and them gave Emily $20. I was pretty upset because I was trying to teach Emily that 1 bathroom equates to $2, so I went to talk to my mom about it. My mom said "Sophia, I don't know why but I was going to give Emily the $2 and I had to give her the $20. When I handed Emily the $20 Emily looked at me amazed and said- my mom was right it does work! She told me that you had taught her to tithe the day before!" Talk about conviction! I don't always know how but I swear it works!
Lead by Example: It's no secret that your children will imitate most things you do and finances are no exception. Handle your finances in a way that is responsible and chances are your children's actions will follow.
My last bit of advice is not for everyone, actually a lot of people will probably disagree with me on this one. Let your children help you balance your family budget. Why am I such a believer in this system? Well, when I was little my mom had problems with her vision so I would help her budget her checkbook. To a kid $1000 looks like $100000 (I think they add a few zeros to everything!) but if they see you have $2000 in your bank account and then they see the $1000 mortgage, auto payments and everything else come out, they will see how fast money does go! This will also teach them that there is no "money tree" and that money that you use from that debit card, you have to put money in first! It's not a 'magic' card. I learned this lesson REALLY early on in life and have been money conscious ever since!
Hope this can help steer you into raising financially fabulous little humans! :)
Proverbs 22:6 “Train up a child in the way he should go: and when he is old, he will not depart from it.”.
Thursday, May 10, 2012
Children and Money- How Should You Pay Allowance?
This is a question, I have heard over and over... Should you give your children a flat rate allowance or should they be paid based on the chores they do? Well, let's look at both sides of this debate:
Flat Rate Allowance:
Flat rate is a set amount of money given every week or month with nothing expected from the child in return. Why would you go for this method? Well, this is purely a way of teaching money management. Advocates for this method also argue that it teaches children to help and not have to expect anything in return.
The Chores Based Method:
The chores based allowance is either a set amount of money you give a week/month that is paid only if chores are done OR paying allowance only for specific tasks. Why would you chose this method? Well, supporters of this method will tell you that it teaches the relationship of working for what you earn. If you chose this method you should be clear about what chores are that way you do not raise a child that expects payment for EVERYTHING he/she does.
What method do we use?
In the Sanderson home we have a chores-based allowance system. Our children have their regular chores- keep their rooms and bathrooms clean, and kitchen clean-up. Those are done free- as I tell them because you live here and in this family everyone contributes, and because I am not your slave! However, we always have "extra chores" that can be done for payment. Toilet cleaning for example can be done for $2/toilet. When you have 3 in the house that can add up quickly! They can also always ask- is there anything else I can do for extra money? This method for us has eliminated the "I'll do it but how much do I get?" question that annoys me every time I hear it and also shows them them that initiative and hard work can pay off!
Stay tuned- In my next blog I will teach you how to teach your children the value of a dollar. :)
Flat Rate Allowance:
Flat rate is a set amount of money given every week or month with nothing expected from the child in return. Why would you go for this method? Well, this is purely a way of teaching money management. Advocates for this method also argue that it teaches children to help and not have to expect anything in return.
The Chores Based Method:
The chores based allowance is either a set amount of money you give a week/month that is paid only if chores are done OR paying allowance only for specific tasks. Why would you chose this method? Well, supporters of this method will tell you that it teaches the relationship of working for what you earn. If you chose this method you should be clear about what chores are that way you do not raise a child that expects payment for EVERYTHING he/she does.
What method do we use?
In the Sanderson home we have a chores-based allowance system. Our children have their regular chores- keep their rooms and bathrooms clean, and kitchen clean-up. Those are done free- as I tell them because you live here and in this family everyone contributes, and because I am not your slave! However, we always have "extra chores" that can be done for payment. Toilet cleaning for example can be done for $2/toilet. When you have 3 in the house that can add up quickly! They can also always ask- is there anything else I can do for extra money? This method for us has eliminated the "I'll do it but how much do I get?" question that annoys me every time I hear it and also shows them them that initiative and hard work can pay off!
Stay tuned- In my next blog I will teach you how to teach your children the value of a dollar. :)
Subscribe to:
Posts (Atom)