1) If your employer allows, participate in a child care flexible spending account. This is a special account that the Internal Revenue Service (IRS) created that allows you to set aside money for child care expenses with pre-tax dollars. You ask your employer to take out a certain amount of money each month from your paycheck and you can use this money tax free for child care related expenses.
2) Inquire to see if your company has partnerships or offers discounts for certain child care provider services. Companies will sometimes negotiate discount plans with local child care providers to help offset child care costs.
3) See if your public school district offers a half day pre-kindergarten program for 4-year-olds. These programs are usually free and by signing your child up, it will reduce your child care needs to a half day from a full day.
4) If your employer allows flex hours, job sharing or telecommuting, you may be able to use these to juggle your schedule and cut your child care costs.
5) If both you and your spouse work, see if it's possible to arrange your work schedules so they overlap as little as possible. This will allow you to reduce the number of hours your child has to spend at child care.
6) See if there is a relative that can help with child care.
7) Consider hiring a nanny and sharing the cost of child care with a few good friends. This will allow you to pay less individually for child care costs and the nanny will make more overall.
Friday, July 25, 2008
YOUR CHILD AND THEIR ALLOWANCE
HOW OLD SHOULD KIDS BE TO GET AN ALLOWANCE?
Start as early as you and your child are comfortable. Kids often develop a very early fascination with money, so they will be very excited to have some money of their own. Kindergarten age is a good time to start -- though some parents begin earlier if the child is ready.
HOW MUCH ALLOWANCE TO GIVE?
How much money should kids get? This depends on your own family budget restrictions and personal situation. One suggestion might be $1 for every year of age. So a five year old would get five dollars, and a ten year old would get ten dollars a week. Or start with a certain dollar amount, and increase it by $1 each year. Though, we would suggest giving an amount that is comfortable with you, based on your own child's spending habits, and your budget. The main point is to give a certain amount on a regular basis.
If your child is older, you might also start by asking you child how much money they wish to receive each week. If they don't know how much, you could ask them to see how much they might spend each week (which is also a good way to get them to think about budgeting). Then adjust that amount to something more appropriate if necessary.
HOW OFTEN SHOULD AN ALLOWANCE BE PAID?
Allowances do not have to always be paid weekly. Some parents pay their kids at the same time they get their own paycheck, which may be every other week. Others give a monthly allowance to encourage better budgeting skills. Though, we suggest a minimum of once per week.
BASIC MONEY MANAGEMENT SKILLS
Allowances help teach basic money management and economic principles. For example, some parents find that their children often ask too often to buy something when they are out shopping. By giving a allowance, then instead of getting pressure to buy something, you can let the kids decide to buy, if they have an allowance. "You get an allowance, so its up to you to use your own money." This way they can begin to learn the concept that money is a limited resource.
CHORES AND ALLOWANCE
Should your child only make an allowance if they do chores? This is one approach that might seem appealing, but it is often considered a mistake.
Having a chore-allowance relationship is not recommended, since it takes away from the money skills that children might otherwise learn. Chores should be considered a family responsibility that should not be associated with money. Also, kids may not do their chores if they only have to give up a small allowance. The purpose of an allowance is to teach money skills, and this may be lost if it is strictly tied to chores, and if the allowance is not regular and consistent.
As a compromise, you may pay a base allowance, and let your child make additional money if they complete additional chores for the week.
SAVING MONEY
Of course, don't let your children buy everything they want immediately if they have the money. An important concept to teach is the concept of saving. By saving money, we can buy something more expensive tomorrow, if we save our money today. However, at the same time the money given as an allowance is now your child's, so you must let them decide how they spend it -- its part of the learning process.
Though, you can still give guidance. For example, when you are shopping, and your child asks to buy something, always ask them if they are sure if that is what they want, and that they could save their money to buy something better.
Along with the allowance, you can establish some restrictions. For example, you should require the child to set aside a certain amount to save. So if the allowance is $3, for example, then perhaps $1 should be placed in a piggy bank for saving, while $2 can be used for spending. You can even set aside a percent for donating as well.
To encourage even longer-term savings, you may want to give your child additional money to allocate to long-term savings. Long-term savings money should then be deposited to a bank account or other financial institution. Long-term savings could be for college or other long-term goals.
CLOTHING ALLOWANCE
For help with budgeting for different items or spending categories, it may be easier to help your child budget his or her money by setting up a special allowance. For example, for clothing you could give a clothing allowance in addition to the normal allowance. Money for the clothing allowance is only to be spent on clothing.
KIDS BANK
Some parents find it difficult to always be carrying around their child's money when shopping. In that case, it may be easier to start a kids bank. With a kids bank, the weekly allowance is 'deposited' into a simulated bank account. Then, your child can write a check when making a 'withdrawal', and you can directly give them the money.
An extra benefit of this approach is that your child can learn basic checking skills, and practice math.
TRIAL AN ERROR
Remember, kids will learn by trial and error. Don't be too afraid that your children will not spend their money wisely. Its much better that they make mistakes now, when they are young, rather than later in life -- that's what an allowance is for.
Money skills are unfortunately not taught extensively in school, so its up to you to help your kids learn about money and the value of savings!
Start as early as you and your child are comfortable. Kids often develop a very early fascination with money, so they will be very excited to have some money of their own. Kindergarten age is a good time to start -- though some parents begin earlier if the child is ready.
HOW MUCH ALLOWANCE TO GIVE?
How much money should kids get? This depends on your own family budget restrictions and personal situation. One suggestion might be $1 for every year of age. So a five year old would get five dollars, and a ten year old would get ten dollars a week. Or start with a certain dollar amount, and increase it by $1 each year. Though, we would suggest giving an amount that is comfortable with you, based on your own child's spending habits, and your budget. The main point is to give a certain amount on a regular basis.
If your child is older, you might also start by asking you child how much money they wish to receive each week. If they don't know how much, you could ask them to see how much they might spend each week (which is also a good way to get them to think about budgeting). Then adjust that amount to something more appropriate if necessary.
HOW OFTEN SHOULD AN ALLOWANCE BE PAID?
Allowances do not have to always be paid weekly. Some parents pay their kids at the same time they get their own paycheck, which may be every other week. Others give a monthly allowance to encourage better budgeting skills. Though, we suggest a minimum of once per week.
BASIC MONEY MANAGEMENT SKILLS
Allowances help teach basic money management and economic principles. For example, some parents find that their children often ask too often to buy something when they are out shopping. By giving a allowance, then instead of getting pressure to buy something, you can let the kids decide to buy, if they have an allowance. "You get an allowance, so its up to you to use your own money." This way they can begin to learn the concept that money is a limited resource.
CHORES AND ALLOWANCE
Should your child only make an allowance if they do chores? This is one approach that might seem appealing, but it is often considered a mistake.
Having a chore-allowance relationship is not recommended, since it takes away from the money skills that children might otherwise learn. Chores should be considered a family responsibility that should not be associated with money. Also, kids may not do their chores if they only have to give up a small allowance. The purpose of an allowance is to teach money skills, and this may be lost if it is strictly tied to chores, and if the allowance is not regular and consistent.
As a compromise, you may pay a base allowance, and let your child make additional money if they complete additional chores for the week.
SAVING MONEY
Of course, don't let your children buy everything they want immediately if they have the money. An important concept to teach is the concept of saving. By saving money, we can buy something more expensive tomorrow, if we save our money today. However, at the same time the money given as an allowance is now your child's, so you must let them decide how they spend it -- its part of the learning process.
Though, you can still give guidance. For example, when you are shopping, and your child asks to buy something, always ask them if they are sure if that is what they want, and that they could save their money to buy something better.
Along with the allowance, you can establish some restrictions. For example, you should require the child to set aside a certain amount to save. So if the allowance is $3, for example, then perhaps $1 should be placed in a piggy bank for saving, while $2 can be used for spending. You can even set aside a percent for donating as well.
To encourage even longer-term savings, you may want to give your child additional money to allocate to long-term savings. Long-term savings money should then be deposited to a bank account or other financial institution. Long-term savings could be for college or other long-term goals.
CLOTHING ALLOWANCE
For help with budgeting for different items or spending categories, it may be easier to help your child budget his or her money by setting up a special allowance. For example, for clothing you could give a clothing allowance in addition to the normal allowance. Money for the clothing allowance is only to be spent on clothing.
KIDS BANK
Some parents find it difficult to always be carrying around their child's money when shopping. In that case, it may be easier to start a kids bank. With a kids bank, the weekly allowance is 'deposited' into a simulated bank account. Then, your child can write a check when making a 'withdrawal', and you can directly give them the money.
An extra benefit of this approach is that your child can learn basic checking skills, and practice math.
TRIAL AN ERROR
Remember, kids will learn by trial and error. Don't be too afraid that your children will not spend their money wisely. Its much better that they make mistakes now, when they are young, rather than later in life -- that's what an allowance is for.
Money skills are unfortunately not taught extensively in school, so its up to you to help your kids learn about money and the value of savings!
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