Saving Money Tips and Money

It always seems more difficult to save more, and spend less. There always seems to be somewhere else to spend your money — that is why so many people are in debt, and don't save as much as they should.

To help improve your saving money habits, here are some spending and saving tips and advice.

Also, along with saving money, it's important to learn good budgeting skills.

SAVING TIPS

AVOID COMPULSIVE PURCHASES

Don't buy things you really don't need. When shopping, only purchase what you planned on buying. If you find something else you want, hold off on the purchase until the next time. That way, you can have some time to think if the item is really something you need. Also, you can then check if it is within your budget.

PREPARE MEALS AT HOME

Instead of eating breakfast on the way to work, try eating breakfast at home instead. Also, make your own lunch at home and bring it with you to work. It is amazing how much money you will save by preparing your own meals.

Also, instead of drinking soda, drink water instead — it will also help you watch your weight. Snacks are something you can bring from home as well. Choose healthy snacks, such as fruit.

AVOID CONVENIENCE STORES

Try not to spend money on groceries at convenience stores unless it is really necessary.

DO ONLINE PRICE COMPARISON

Check prices online before making any large purchases. Online prices are very competitive, and by checking prices online first, you will know if buying at your local store makes sense or not.

TURN DOWN THE TEMPERATURE

Turn down the temperature in your house in the winter, and raise it during the summer. Also reduce the temperature of your hot water heater.

PAY OFF CREDIT CARD DEBT

Credit card debt has one of the highest rates of interest you can pay. Don't just pay the minimum monthly charge, but try to pay your credit card in full.

KEEP A BUDGET

A great way to help save money is to create a budget, and then stick to it. Even by just tracking where the money is going, you will be more aware of your spending habits, and eliminate unnecessary spending.

SWAP TOYS

If you have kids, instead of buying lots of expensive toys, consider buying less toys, and then swapping toys with friends and family. Kids often lose interest with their toys, but have a greater interest in new toys. By swapping, you can increase the frequency of new toys without spending any additional money.

ALLOWANCES FOR KIDS

An allowance — a certain amount of money given on a regular basis — is a great way to get kids to learn about the value of money while also learning basic money management skills.

Its also a great way to teach responsibility and discipline.

See below for information on giving an allowance to your child. Also, along with giving an allowance, to help encourage saving money see our budgeting section for some helpful lessons.

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 AND 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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