How do you budget for "milestone" events?

I just read in The Wall Street Journal that times are tough for the Tooth Fairy. The short piece reported that the latest figures are in: "The average gift from the Tooth Fairy dropped to $2.10 last year, down 42 cents from $2.52 in 2010".

My first thought was, "There's a Tooth Fairy poll? Really?"

My next thought was, "I wonder if people budget for such things." I'm sure there are some Type-A personalities that budget every single dollar, which is great. But most of us probably wouldn't budget specifically for this, would we?

The current Tooth Fairy poll is so 1998. It's time to come out of beta and move into Tooth Fairy Poll 2.0, one even more relevant to our new, financially-refocused mentalities. So here's the question: How many of you budget specifically for "milestone" events? Graduations (elementary, middle school, high school, and beyond), first home run, baptism, dance recital, wedding gift, housewarming gift, first communion, a new baby, and yes, even a lost tooth. Do you combine these into your "Gift" budget? Maybe it falls into "Miscellaneous Expense" category? Or some of you might have a "Holiday" category which would also include Valentine's cards and candy, 4th of July fireworks, or Halloween costumes. Maybe milestone events get lumped in there?

My guess is that if you budget for it at all, the Tooth Fairy would go in the gifts category. But I could be surprised, just like I was when I learned that a Tooth Fairy poll existed.

Inflation History: The Rise and Fall of the U.S. Dollar

Posted by Matthew at 3:27 PM | Comments (2) | TrackBack
Category(s): Family Finances
Tag(s): budget, family finances, save money

Email this post

Share |

Save big money by timing your purchases

Let's say you're a diligent shopper already. Maybe you're practicing one of the three easy ways to save 15% or more. Better yet, maybe you're practicing all three! And if you're that diligent, you're likely already saving for your purchases instead of buying them on impulse. If so, that's fantastic. You're probably in the elite 1% of people who do so.

But there's another practice you can incorporate into your buying decisions that will take your savings status to "super elite". That is the practice of timing of your purchases. I've talked about this before, but not in the context of combining it with our cost-saving measures.

We already know this works for reserving hotels, cars, and plane tickets, using a service like Yapta. But I'm talking about physical goods (beyond year-end car purchases). I'm talking bikes, major appliances, clothes, housewares, luggage, furniture, even chocolate.

My current example of this practice revolves around our search for a replacement vacuum cleaner. Our old 400 lb behemoth could have been replaced a while ago. But we decided this would be the year. So we've researched the model we want.

The next step was to find out when it would likely go on sale. How do you do this? There are a number of guides out there, but here are a couple worth looking at: The Best Times to Buy Anything and The Best Time to Buy Guide for 101 Products. You'll notice the two guides are similar in their projections. For my example, they both show that April and May are the best time to buy vacuums. Early June is typically when new models roll out, so they're clearing house immediately prior to that time.

Combining the three easy ways to save 15% with this purchase timing idea can be a little tricky, particularly since you usually don't know for sure a vendor will put any specific model on sale. But if you're willing to risk it (and I am), the process for the vacuum purchase would look like this:

1. Buy used gift cards in an amount less than the vacuum's current price
2. Buy coupon off ebay
3. Wait until April or May
4. Use cash back site like eBates to link to merchant
5. Purchase vacuum on sale using the coupon and the used gift cards.

You've now layered savings from used gift cards, on top of savings from coupon, on top of savings from cash back site, on top of savings from the sale. An onion has fewer layers!

At SMI, we frequently talk about having an investing plan and sticking to it regardless of market conditions. You can do a similar thing with many consumer purchases. While you can't predict when the market will go up or down, you can (to at least some extent) with consumer goods. It's worth factoring timing into your spending game plan. Be intentional about your larger purchases and see how much money you can save.

Inflation History: The Rise and Fall of the U.S. Dollar

Posted by Matthew at 11:04 AM | Comments (0) | TrackBack
Category(s): Family Finances
Tag(s): budget, family finances, save money

Email this post

Share |

Teach your children about money

At the start of the year, my church began offering Dave Ramsey's Financial Peace University. Our church has offered many of the Crown/Compass studies (including the one we're featuring in SMI this year) in the past and it was time for something new. Especially appealing was the fact that someone other than me was going to lead it! I was enthusiastically on board with the idea and signed up to participate, as I've never actually gone through Financial Peace (though I've seen Dave at a live event and am generally familiar with their stuff).

One of the main topics last night was how to raise financially smart kids. Dave isn't big on paying kids an allowance. Instead, he feels kids should be paid for work they do. His emphasis is on tying work and money closely together in those impressionable brains. He does mention that there should be some things expected of the kids that they don't get paid for — that they do just because they're part of the family. But it's pretty clear he falls on the "pay for work" side of that divide.

This was interesting to me, as Austin used largely the opposite approach with his kids. They were brought up understanding that you help with work around the house because you're part of the family, and as part of the family you also are cared for, in part, by receiving an allowance. There were some jobs that were paid extra, but most were expected as being part of the family.

There are definitely pros and cons to both approaches, I've opted more for the "allowance and you work because you're part of the family" approach with my kids. But I do find some of Ramsey's arguments persuasive as well. I think there's something different for a kid when they've specifically earned money — it feels different and they treat it differently. And instilling the idea that if you want to have money, you need to work for it seems like a good idea (although I've not worried too much about that, as I fully expect my kids to work at jobs outside the house when they're old enough to do so).

I'm leaning towards introducing more of a hybrid system at our house, where certain chores are expected but other paid job opportunities are available as well. But I haven't come up with anything specific yet and I'm a little leery of every new job being met with a question of whether they're going to get paid.

Anyway, I'm curious to hear your experiences with this issue. What have you tried that worked well, or didn't work so well? Please share via the comments link below.

Inflation History: The Rise and Fall of the U.S. Dollar

Posted by Mark at 10:42 AM | Comments (9) | TrackBack
Category(s): Family Finances
Tag(s): budget, children, family finances

Email this post

Share |