Pssst…When it comes to your family’s finances, why learn from your mistakes, when you can learn from those made by another parent? That’s me, and I’ve got some secrets to share.
By Nadine J. Larder
I’m about to share with you “my secrets,” the ones I usually only share with my closest friends about my…ummm…financial “woes.” I’m just going to put it right out there!
I was living the dream in the early 2000’s. My husband and I worked hard, earned a good and consistent income, and we enjoyed ourselves. You know, “work hard…play hard.” We handled our financial responsibilities, had excellent credit and investments, and we always saved for a rainy day, making what we thought were good financial decisions.
Long story short… Good financial decisions don’t land you in line at the food-bank, which is where I found myself, on more than one occasion to make sure I always had food on the table. It all spiraled out of control in early 2008 when the real estate market crashed. We had a successful real estate business. I also had about $1.5 million in debt and was reluctantly considering bankruptcy as an option. It was a difficult period that I’m not necessarily proud of, but I learned a lot about finances and a lot about myself during that challenging, frustrating time of life’s slapping me around, wondering will it ever end, and knowing bankruptcy was not an option.
My notes on life, family and money
Life is always teaching when the student is ready for class and this was NOT a class I wished to repeat. So I showed up and I took copious notes for all of us! Please use my notes to make sure you don’t end up in this life class. It’s no fun, and I can save you the trip.
1. Save for a rainy day. You never know when the storm is coming; it always arrives without warning. The absolute easiest way to make sure you save is to have money automatically transferred to your savings account every week, without fail. It does not matter how small of a transfer you begin with, it will grow quickly, and watching your savings account grow will inspire you to want to save more.
Pssst…The harder it is to scrimp and save up your nest egg, the more you’ll appreciate it and all the hard work it represents, and the less likely you are to easily part with it. You’ll make wiser financial decisions if you scrimp and save, to scrimp and save.
2. Don’t spend money you don’t have. Credit is a bunch of BS! I was sold on credit. I used credit, and it nearly crushed me. It stressed me out, and it took forever to pay it off. If you’re using credit for something other than a car or house, you can’t afford “it” and therefore should not purchase “it,” whatever “it” is. Especially if it’s something you find in a department store or mall! “Step away from the handbag…”
Generally speaking, people don’t appreciate what they don’t pay for. When purchasing with plastic, you’re not actually paying for it–the bank is– therefore you won’t likely appreciate it as much as if you’d saved for the item. It feels so good to finally purchase something you’ve saved up for, whereas it feels stressful to pay with plastic, knowing you have to figure out a way to pay for it later because you can’t afford it now.
Pssst…Take a “pass” until you can pay cash! Your life will be less complicated, and you’ll have that much more of yourself to offer your family. Only buy what you can actually pay for at the time of purchase–from your debit card, not your credit card. You’ll be so much happier.
3. Teach your children about money. Allow your kids to earn money for a job well done. Children who earn money for chores and handling their responsibilities are better equipped to handle finances as adults. When children go through the “earning process” they’re learning valuable life lessons and it builds their self-esteem. When my kids save up for something they really want, they feel so good about being able to get it because they went through the process of earning it. They experience the life lesson of saving their pennies, understanding where they come from (hard work & contribution) and how to go about getting more. The kids also experience buyer’s remorse, a lesson that only life can teach any of us. The gifts of allowing your children to earn money for the things they want are endless in terms of what they learn.
4. Save for college, it’s never too late to begin. I started my kids’ college fund when they were in high-school, and thank goodness I did! Some people laughed at me because I started so late and wasn’t able to make large contributions at the time. My college fund helped get two kids through school and a third is currently attending from that same fund. For many of us, this is the only way that higher education is affordable without student loans, and you won’t want your kids starting out in the red and in debt. Save now so you don’t have the stress of trying to pay later when your earning potential may not be as high.
5. Set up a “fun account” for yourself and your spouse with equal weekly and affordable contributions. My husband and I never argued about money once we each got “fun accounts.” There were an abundance of fights prior, truuusssst me! This is how it works: A fun account is a “no questions asked” bank account that is automatically deposited into weekly with a budgeted amount. As long as there’s money in the account, we are free to spend it on anything we want. Big-ticket items must be saved-up for, and there is a hard “not to exceed what’s in your account” rule. We are both very selective with our “fun money” and tend to eat-in more often and skip certain things we would have otherwise frivolously enjoyed in the past, because we’re saving up for something. We compare account balances, take turns treating for lunch or dinner and really have fun with it. With as hard as you work to earn your income, don’t you deserve to enjoy a portion of it (that’s reasonable) each week? It’s worked out great for us.
Make good choices with your finances, and your home life will be much happier. Since paying off my last bit of debt I have nothing to feel stressed about, and life is so much easier. Imagine the benefits to your physical, mental, and spiritual health and the health of your relationships if you didn’t invite financial stress in your life.
I’m not living large, but I’m living my dream, and I don’t think it can get any better than this!
Nadine J. Larder is a mother of five children, small business owner, and author of a series of books written to pass on her wealth of secrets learned from the school of hard knocks. The series, “The Secrets I Share With My Friends” is available for purchase on Amazon.