6

Financing Your Minimalist Life

Money seems straightforward enough. It’s a numbers game, after all: you either have enough or you don’t. Right? In our experience, money—thinking about it, handling it, managing it—is rarely that simple. There’s more emotional, cultural, and social expectation and stress tied up with finances than most people realize or are willing to admit. The tendency is to assume that more money would solve most problems when, in actuality, more wealth might make your life more complicated.

I’d like to give that version of complicated a try, you’re thinking. We hear you! Who’d turn down an extra zero or two on the bank balance? More money can bring more freedom and choice . . . but only to a point. Once your family’s basic needs are covered, having fewer constraints on your spending can lead to an increasingly overcrowded, overwhelming life, which is the problem we’re trying to solve.

While less isn’t exactly more in the case of money, in this chapter we hope to reframe the conversation about family finances. We aren’t financial experts, but we are—like you—living with the realities and complexities of money. We view managing money as a way to bring you closer to the life you want, and as a skill to teach your children. If what you want is more clarity and less clutter, it’s worth giving some thought to how you’re handling your finances now, and how—once minimalized—you may find that you already have enough money to reach your goals.

“Minimalist” Does Not Mean “Minimal”

We’re not going to tell you to stop buying stuff. Nor are we going to tell you to forgo pedicures and lattes. Minimalist is not the same as minimal.

Conversations about frugality sometimes turn saving money into the end goal. But what are you saving your money for? When we stress the importance of knowing yourself and your family, defining your values takes a decidedly literal turn. As you begin to think about your finances, ask yourself: What do I consider valuable?

If this topic rings a bell, it’s because it echoes our discussion in chapter 2 about time. Both time and money are limited resources, and spending them wisely is a crucial part of Minimalist Parenting. Because of the interrelated nature of time and money (often, when you have more of one, you have less of the other), the question becomes: How do you find balance? How do you use money as a tool to increase and enrich your time?

Deciding What’s Worth Your Money

When you minimalize your finances, the focus shifts from “Do I have enough?” to “What do I care about?” As always, the conversation begins with you and your family—your unique needs, wants, and priorities.

We like buying stuff as much as anyone. Christine adds beauty to her home with art (she likes to support an artist friend who creates beautiful paintings) and to her closet with bold accessories (she otherwise keeps her clothing very simple). Asha’s a cheapskate in many ways (which causes its own problems), but she doesn’t think twice about splurging on travel or a live performance.

All of this costs money, and plenty of it. But the trick is to know the difference between an expense and an investment. An expense is a cost, plain and simple, whereas an investment is something that enriches your life, either by freeing up time to do more important things or by allowing you to experience something you consider a priority. What elevates an expense to an investment is meaning and long-term gain, and this will differ for each family. For example, if your top priority is your family’s health, you’re going to spend more money and time on grocery shopping, meal planning, cooking, and reading about nutrition.

We throw all of our frugal brain cells at reducing expenses so we can funnel money toward investments. Spending isn’t the problem. Spending on stuff that doesn’t matter is. As you evaluate your finances, try to think of your cash flow in terms of expenses versus investments. Ask yourself the following questions:

Do I Need It ?

Need is a shifty character. Do you need an expensive standing mixer? If you don’t enjoy baking, the answer would be no. However, for those (like Christine!) who find baking a source of joy and family time, the answer might be yes. It warrants noting that you may need that standing mixer but your spouse may also need a Dremel. Who gets dibs on the discretionary spending? This is where shared conversations about your family’s values and priorities will pay off (literally).

As you take a critical look at your needs, beware of the “but everyone is buying this” trap. Keep your eye trained on what you consider valuable, not on what the world around you is pressuring you to buy. Is a specialized diaper disposal system functionally necessary? No. Will those videos make your baby smarter? Um, probably not.

Trent of thesimpledollar.com, via the Minimalist Parenting blog: My approach is to look at everything I spend and ask myself if there’s not something I actually want more than that. So, if I’m about to spend $10 on a book, I ask myself if there are things in life that I want more than that book, like owning my own home. Which is really more important to me? In other words, finances come down to values.

Another trap: trying to fill holes left from your own childhood. While there may be satisfaction in buying the luxuries your parents couldn’t afford (or didn’t value), this habit falls dangerously close to throwing money at a problem that would be better solved with introspection and acceptance. Take a closer look at your needs and open yourself to how much they’re colored by “want.”

Leslee of cr8zygrrlceramics.etsy.com, via the Minimalist Parenting blog: Teach kids the difference between “want” and “need.” Don’t just preach it; live it. A family disaster required me to completely reevaluate our spending habits. I may not have bought myself any new clothes or shoes in the last three years, but my kids are happy, well cared for, and know they are loved.

Do I Love It ?

We don’t think “want” is a four-letter word! We all want things. It’s perfectly natural, and it’s perfectly okay, as long as you’re clear on the difference between wants and needs.

But there’s also an important distinction between “want” and “love.” Loving something—really, truly loving it—puts a select few items into a special category between “want” and “need.” We all need beauty and joy in our lives, and there are certain items and experiences, small and large, that embody such beauty and joy. Perhaps it’s your saltcellar collection, which reminds you of your grandparents. Or maybe it’s the expensive yarn for your knitting projects. Or a piece of art hanging in the local gallery. When chosen mindfully, items you love are an investment in your life’s joy.

Will I Learn from It ?

Some purchases will change the course of your life. A college education, a vacation, a bicycle that gets you out of your car and exploring your neighborhood, a pet (a hefty investment in money and time, but, for some, a major life changer). You can’t always predict when and where “big stuff” will happen, but check in with your inner bus driver—she’ll often send you a zing when you’re looking at a potentially life-changing opportunity.

I grew up with a thick book of Michelangelo’s artwork sitting on my parents’ coffee table. I admit that during my elementary school years, what fascinated me most were the naked men (you have to admit, the David is pretty hot). But if I really think about what that book added to my life, it was a desire to travel to Italy. I went on to spend several weeks there in college, and to take a year of Italian lessons. And yes, to visit David “in the flesh” at the Galleria dell’Accademia in Florence. We’re currently trying to figure out how we can take the kids to Italy.

Will It Positively Impact My Life in Other Ways?

Though in general one of the best money-saving tactics is to reduce your spending, sometimes, investing in something can minimalize life in ways that are more valuable and meaningful.

For 13 years, Jon and I shared a car. Given that we’ve always lived in urban areas, it wasn’t difficult. It only became a problem when Jon started working at a clinic with an untenable public transit commute. He needed the car most weekdays, but we forged on because I loved being eco-friendly (perhaps a bit smugly so, I regret to admit), and whenever I needed a second set of wheels, I used the car-sharing service Zipcar. Laurel and I walked home from school, which was largely fine, save during the occasional snowstorm or monsoon, and when Violet arrived, we stuck with our little car and it forced us to travel incredibly lightly (good), though it was disappointing when we couldn’t bring things that would add joy to our travels (e.g., Jon’s guitar). The arrangement was okay, except for the times when I had to juggle Zipcar, Laurel, baby Violet, Laurel’s booster seat, Violet’s car seat, a stroller, and all of our bags. Or when playdates weren’t feasible because we didn’t have wheels.

When Violet was about six months old, we found ourselves in a very stressful position. We had hired a sitter instead of sending Violet to day care because it was easier logistically due to our one-car status. At first, things seemed fine, but it soon became clear that we needed to make a (fast) change because of some strange goings-on with our sitter.

Jon and I spent a painful amount of energy trying to resolve the situation, brainstorming different at-home child-care solutions and commuting options. The stress of these basic logistics was compounded by the fact that we needed to fire the sitter and secure a new child-care arrangement immediately.

We finally decided to get over ourselves and buy a second car. I admit that I experienced an internal crisis over this. We would no longer be a one-car family! But really, why was I so attached to that label? We went out, bought a second car (used), and right away many other details clicked into place—new paths emerged and the emotional and logistical clutter began to dissipate. We were able to solve the sitter situation. A spot at Laurel’s former day care opened up just at the right time. Jon and I were able to split drop-off duties so we could both get our workdays going on time and with less stress. We were able to transport Laurel and her friends around and become part of a “village” ride sharing solution with other parents for school, soccer, and playdates. We could fit everyone in our eight-seater when my in-laws came to town.

I couldn’t believe we hadn’t made the decision earlier.

A Minimalist Approach to Money Management

Can you be a responsible steward of your family’s money if you don’t balance your checkbook or follow a budget? Yes! (That realization alone may be worth the price of this book.) Like other things in life, money management isn’t a right/wrong dichotomy but rather a process you create based on where you are right now and what you need going forward.

If you’re doing okay financially—there’s enough money every month to pay the bills and see a movie or two but not much for savings—you’re fine tracking the larger expenses by category and letting go of the details. You’ll be able to gain enough data at that level of insight to shift your spending and make progress toward your savings goals. If, on the other hand, you’re drowning in credit card debt and living paycheck to paycheck, you’ll need to spend more time and attention on budgeting in order to get on top of it. It’s fine. You start where you are and go from there. The best method is the one that works with minimum fuss.

Tracking Your Cash Flow

Money in, money out. That’s cash flow. Before you can improve your financial circumstances, you need information about where you currently stand. With credit and debit card spending, electronically deposited paychecks, automatic bill pay, and all the rest, it can be surprisingly easy to lose sight of reality where your finances are concerned.

The first step is to track your income and spending for a month or two. Yes, it’s a bummer, because you want to jump in and fix the problem RIGHT NOW. But tracking your cash flow will show you where the problems are. Perhaps the problem is too much money spent on takeout. Or cell phone plans. Or groceries. Perhaps you’re a freelancer with multiple sources of income, and one of your jobs doesn’t pay nearly as much per hour as the others. How will you know unless you have ballpark dollar amounts you’re earning and spending?

If all you need is high-level information, you can probably find it by logging in to your bank’s online system. Some banks’ systems include an expense-tracking feature and, because all of your data is already there, it shouldn’t be difficult to figure out.

Cynth via the Minimalist Parenting blog: For those who can’t deal with a lot of data, I have a REALLY simple spreadsheet: I just track the money in and money out of each checking account each month. I get the data when the account statements come (since I have to reconcile my checkbook anyway) and put it in literally once a month for all of the sixty seconds it takes. Then I can tell whether we’re on track to cover spending with revenues or whether we need to make adjustments later in the year.

If you need more detailed information, you can do it manually by categorizing and entering daily receipts, or you can sign up for a service such as Mint.com or Adaptu.com. Both pull data directly from your bank to spare you tiresome data entry.

Most importantly, you need to find the level of detail that makes you feel most comfortable.

Kelly Whalen of thecentsiblelife.com, via the Minimalist Parenting blog: It’s called personal finance for a reason. I think the key to stressing less about money is having a cushion in place, and living well within your means. While automating expenses, bill paying, and savings works for some people, others (myself included) prefer to be more hands on. Spending an hour or so a week focusing on our money actually keeps me tuned in to how much we are spending.

Finally, it’s worth acknowledging the guilt and anxiety you may feel as your financial picture comes into focus. How did we let our finances get to this point? How will we afford to send our kids to college, let alone retire? How will we ever be able to save up an emergency fund? These are all reasonable questions with specific answers. Rather than worrying about leaping the chasm between where you are now and where you want to be, try instead to focus on how brave you are for taking the first step (YAY YOU), and what your next step is going to be. You’re making progress! That’s what matters.

Building Your Financial Foundation

Once you’ve got a decent view of your overall financial picture, you’re ready to adjust your spending so you can build a plan. These are your long-term priorities for a strong financial foundation.

Save for an Emergency

Work toward putting three- to six-months-worth of living expenses in an emergency savings account. We’re talking basic living expenses: mortgage or rent, food, utilities, the necessities. This protects you in case something big knocks you off your income-earning feet for a few months.

Save for Retirement

Once you’ve got an emergency fund set aside, start with whatever monthly retirement savings amount seems doable, and then try to increase it each month. The key point to keep in mind: the more you save sooner, the less you’ll have to save overall. Compound interest is your friend. Try not to worry about whether it’s “enough” for now. Just get started.

Save for College

Yep, retirement first, then college. Because no one’s giving you a scholarship to retire.

There are other pieces (e.g., insurance, estate planning) you need as part of a complete financial plan, but why overwhelm yourself right out of the gate? No matter what, this is a great place to start. If you want to explore personal finance further, we share some great resources at the end of this book.

Reducing Your Spending

It’s obvious that spending less will help you save more. But it can be difficult to figure out where to begin, particularly if you’re already living lean. The answer lies in what we discussed earlier in the chapter: being clear about what you consider valuable.

Remember the More and Less List you drew up in chapter 2 to shed light on how you want to spend your time? Apply this same list to money. Look at the data you uncovered during your cash flow tracking and see if you can find where you’re spending on things you don’t really care about. The specifics will be unique to you, but here are some common culprits:

• High-end items, such as a house that’s bigger than you need or car payments/insurance when you don’t really use that extra car

• Premium TV channels, when you barely watch TV

• Long-distance phone service, when you use your cell phone most of the time

• Takeout, when a little bit of attention to meal planning would solve dinnertime dilemmas (see chapter 11 for inspiration)

• Expensive weekend entertainment, when a bike ride, board game, or a free concert in the park would be just as fun

• Big-ticket travel, when a creative staycation could provide ample adventure

Karen of moneysavingenthusiast.com, via the Minimalist Parenting blog: When it comes to being a minimalist parent on a budget, my philosophy is “What would a mom in the ’70s or ’80s do?” I think of all of the things I did as a kid. I try to raise my kids with good old-fashioned fun. We play Wiffle ball, throw footballs, and watch movies at home. We splurge on special occasions and go to baseball games when we have the money. When you pick your priorities and set your budget, you learn how to be creative.

Keep in mind one of the keys of Minimalist Parenting: course correction beats perfection. Make one or two changes to your spending, see how they feel, then make a few more. Reducing your spending can be surprisingly painless when you approach it gradually, with a spirit of experimentation and willingness. It’s empowering to discover that a full, fun life can be had for much less money than you thought.

Increasing Your Income

The other piece of the savings equation is income. If more money is coming in, that’s as good as saving, right? Well, yes, as long as you don’t spend it all. Bigger paychecks have a way of super-sizing “needs,” just as bigger houses tend to fill with more clutter.

The other tricky part about making more money: you’ll have to cut into your available time to do it. Before you commit to a job (or a second job), check with your partner and your inner bus driver to see if that’s a sacrifice you’re willing to make. On the other hand, outside work may be just what you need. If, for example, you’re craving adult interaction and recognition in the outside world, paid work could do wonders for much more than the bottom line.

If you and your family decide that more income is the way to go, and you commit yourself to throwing most of the money you make into your savings, more power to you! Are there some smart investments you can make to exchange money for time? Perhaps a housecleaner would free up enough hours for you to not only pay for the help but to invest in yourself even further.

As for the how-to for making more money, Christine recommends two reflective angles on the process:

Since leaving academia to forge a freelance career, there are two perspectives I have adhered to that have proven immensely beneficial. The first is to set intentions about what you are trying to achieve. Perhaps it sounds a little woo woo, but Jon and I believe strongly in the power of setting intentions (a first cousin of your inner bus driver). It’s incredibly powerful to be specific about how you want your life to shape up. Now, this is not genie in a bottle kind of stuff—saying, “I want to win the lottery tomorrow!” is not going to cut it. Instead, setting intentions involves examining your life, seeing what you have in front of you, and deciding what may be within your reach, and what you deserve/want to make happen.

Intentions don’t always revolve around money, but one year I looked at my skills and the palette of work I was doing and said, “I’m doing pretty well but I really think I deserve to be earning [insert large income jump].” I set this intention, started to plant some seeds to move in this direction, and by the next year, I was where I wanted to be.

The second perspective involves a mantra I picked up from Jon: opportunities can be dangerous. When you’re eager to get ahead, it’s tempting to leap at every opportunity that comes your way. Before you jump, gauge your initial reaction (happy, cringing, disappointed, etc.) and evaluate the time/money tradeoff. If your inner bus driver tells you to step hard on the brakes and say no to that opportunity, listen to her. This won’t be your last opportunity. Hold out for something that will bring both money and joy.

Simplifying Your Financial Setup

Another place to minimalize your finances is in the infrastructure: the bank accounts, savings accounts, credit cards, and bill paying and how they all work together. The less time you spend tinkering with the mechanics of your financial system, the less it will feel like a chore, and the more it will work for you.

It’s easier to keep track of the daily spending when there are fewer moving parts. Some families pay nondiscretionary bills (mortgage, insurance, etc.) with the checking account while confining discretionary spending to a single credit card. One of our blog readers came up with this simple and low-tech solution:

Jessica of thedebtprincess.com, via the Minimalist Parenting blog: On the first of the month, I pull out the cash and place it into each envelope for the month. I don’t even carry my debit card with me, just my envelopes in an organizer. This way I am guaranteed to stay within my VERY SMALL budget.

If the idea of carrying around that much cash seems inconvenient, a clever Parent Hacks reader modified the system by using gift cards.

Automating Spending, Saving, and Bill Paying

There are two trains of thought when it comes to automating your finances. The first says that the less you think about it, the more you’re likely to follow through with your savings plans. The second says that autopilot = taking your eye off the ball, which is part of the problem.

Only you can decide whether automation will help or hinder your progress toward your financial goals. We’re fans of automation simply because it frees brain cells for other pursuits. Convert paper paychecks to direct deposit. Familiarize yourself with your bank’s online banking system to see what kinds of automation you can set up (e.g., bill pay, between-account transfers).

Kim @observacious, via the Minimalist Parenting blog: My mother always told me to “pay yourself first.” That’s become even easier with the world of direct deposit and automatic transfers. Our money automatically gets [split up and] dispersed into long-term savings (for unspecified purposes), short-term savings (for upcoming expenditures, usually for the house), into “play” accounts for my husband and me, and into our joint checking account. Although I always try to keep some money in the main checking account as a buffer, for the most part we manage the balance. If the balance is already low by midmonth we know we’ll need to be a bit more austere in the remaining weeks. Because the account splits happen up front I know that even in months when we push the limits of our checking account we have also managed to save a bit.

Adrienne of babytoolkit.com, via the Minimalist Parenting blog: We set up a separate account that we think of as an escrow account for big (boring) annual expenses: property taxes, insurance premiums, auto licensing, etc. Annually, I total the last year’s fees and divide by the number of pay periods (twelve for us, because our income is monthly). We direct deposit that amount plus a small cushion to cover rate changes (maybe $150 per year). When the big bills hit, there’s no scramble to assemble the funds needed.

Again, start small. If the idea of transfers among multiple accounts makes your head explode, start with a monthly $50 transfer to your savings account. As you get comfortable working with your money, you’ll quickly find more ways to save time and effort.

Hiring Professional Help

You appreciate the minimalist mantra, but the whole money thing still freaks you out. If so, hiring financial help (an accountant, financial planner, bookkeeper, etc.) may be a good investment in your financial and mental health.

Let us reassure you: the basics of a good personal financial plan are simple and straightforward for anyone to learn. Even a little bit of reading on the topic will give you a leg up on the average consumer (see the resources section at the end of the book for recommendations). A little education is in order even if you do decide to work with a professional, if only to help you ask more intelligent questions. Impartial advice can also help you make the leap from thinking to doing.

Stacie of hometownperch.com, via the Minimalist Parenting blog: My husband and I had tried every approach in the book and we were still living paycheck to paycheck. What works for others just did not work for us. But what did work for us finally was going through Financial Peace University (FPU). We started the class a few months ago and it has honestly changed our lives forever.

Teaching Kids About Money Management

No matter the state of your family finances, you can teach your kids basic money skills and how their dollars can be spent, whether on themselves or others. Here are some ideas for how to get started.

Inbound Money

The first phase of learning about money management involves understanding where money comes from (i.e., not from trees). Whether your kids receive a gift or payment for a job, income is the first step in learning about the mechanics of saving money and prioritizing purchases.

Allowance

You may decide to give your kids an allowance so they can start learning how to manage their money. Your allowance system doesn’t need to be complicated; simply decide on a reasonable weekly amount, and be consistent. As for when to begin, we think it makes sense to start during the early elementary years, when math and numbers are a daily topic of conversation—say, when your child is about seven or eight.

As for amounts, it’s really up to you and the system you create. One rule of thumb suggests $1 per year of age, but that may be too much if allowance is more of a token payment, or not enough if you expect your kids to take on more buying responsibility.

Rael and I found that we never had enough cash on allowance day, which reduced the effectiveness of the whole exercise. So we started using the mobile app-based “debit” system KiddyBank, which automatically adds a weekly allowance to each kid’s ledger. When someone wants to make a purchase, we deduct the price from his or her total spending money. The beauty of this system: everyone knows how much spending money is available.

Payment for Chores

Chores teach kids how to build everyday skills and function as part of a household, and also help reduce your load. Though some families believe that kids should not receive payment for chores, others use payment as a way to motivate kids to get chores done and learn about the work-for-money exchange. It’s also worth noting that there’s a meeting ground between the two approaches.

My siblings and I worked hard when we were kids. Very hard. We worked both around the house and at my parents’ market, where we all put in time after school, during the evenings, and on weekends (I started working in elementary school). We were not paid for any of this work (until much later, when I was in high school), and I don’t recall any of us grousing about it. It was just part of our family system and livelihood.

Consequently, I am one of those parents who bristles at the thought of paying for chores that reflect everyday helping activities. That said, I realize that Laurel is an accommodating and helpful kid—we don’t have to coerce her to help, which is a common reason payment gets hinged to chores.

Last year Jon and I came upon a middle ground. We give Laurel a weekly allowance ($3) which she can use to experiment with saving and spending. Everyday helping chores (e.g., laundry, tidying up) are expected and not hinged to payment. However, if an unusual, more involved job comes up and we feel the situation warrants, we’ll offer a small payment and it’s up to her whether she wants to take us up on it.

And the funny thing? Sometimes Laurel turns down the payment or offers to do it for less. One time we offered her a couple of dollars to help us wash the car and afterwards, she said, “You know, Mom, how about just one dollar? Because that was a pretty fun job for me, too.”

Gifts

At some point, your child will start receiving cash gifts. Whatever the bill size, it’s probably going to be a big deal when your child receives a lump sum, and it will provide a good opportunity to talk about saving and spending.

Paid Work

Kids gain skills and self-esteem from doing real, useful, challenging work. As they get older, there will be more and more options for what they can do. Encourage them on the journey; you’ll be amazed by what they learn.

I still vividly remember the day I talked to my mom on the phone from my freshman dorm room and she told me that she and my dad could no longer provide financial support for college. The call was not mean spirited; it was purely pragmatic given that I was the sixth child to go through college. As we ended our my mom said, “Anyway, Christine, we’re not worried about you. You always find a way to make things happen.”

And though I don’t wish that level of stress on anyone (I did some serious ugly crying at my college’s financial aid office), it is 100 percent true that this situation helped me develop the work ethic and confidence that is the cornerstone of everything I do today. I learned about time management and budgeting. I learned how to find jobs and operate in professional environments. I learned that you could pretty much learn any work skill on the fly if you needed to. I learned that you can push yourself to work incredibly hard if the result is meaningful to you (every summer I worked an office job during the day then took the bus to my evening job at a local ice cream store . . . yes, it was exhausting). During college, I never missed a class unless I was deathly ill because the privilege of sitting in those classes was directly linked to my long summer working hours.

Perhaps most important of all, I grew a new appreciation for my parents and their struggles around money. One day my mom called me in tears, after having opened an envelope from me, asking me why I was sending her money. It turned out that between my summer and winter breaks, I earned enough to pay my tuition not covered by financial aid. I knew she and my dad were still struggling so it made sense to me to send these checks home. In retrospect, they were such small, piddly checks (I think I earned something like $4.65 an hour at the college library) but I suspect it felt like a million bucks to my mom.

With time, your kids’ money pile will grow and at some point you will want to shift from “under the mattress” to a bank. Christine found that Laurel felt so excited and grown up when she and Jon opened her bank account. It’s a big day when a child realizes that her savings officially have a home.

Outbound Money

On the other side of the money spectrum is spending. As you know, we are big advocates of spending wisely on things that matter. And the good news is that, as you work toward this goal, it will be easier to help your kids get there, too. The approach to kids’ spending is simple: they will think longer and harder about whether or not to spend if they are the ones who have to pay for it.

My kids spend their own money on anything that isn’t a necessity or a gift (extra clothes, video games, toys, etc.). As such, their allowance is high enough to put saving for a $40 item into a reasonable time frame. When the kids are in complete control of their spending money, they learn much more about budgeting and assigning value.

 

One area where my practical upbringing wouldn’t budge—overcompensation issues be damned—was American Girl (AG) dolls. When Laurel asked for one, I told her I simply would not spend $105 on a doll. We were close to Christmas, though, so I suggested that if my family asked about a wish list, she could ask for small (e.g., $5-10) contributions to a doll fund.

At Christmas, Laurel received almost the entire amount for a doll in cash gifts. She put in $10 of her own money and Jon and I chipped in the tax (generous, I know). Jon also offered to take Laurel to the store, which I thought was probably worth $500 of parent-sanity currency, given that I’d directed him to the wrong shopping mall and the correct mall was forty-five minutes away (never mind that a doll store is probably the last place Jon would want to spend an afternoon). They persevered and purchased the doll, and Laurel has played with it an impressive amount. I think part of this had to do with having thought so long and hard about the acquisition, having directed all of her Christmas requests to this one item, and having contributed to buying it.

Now, one might think the story ends here, but a month after Christmas, Laurel received a late gift—a generous $50 gift certificate to the AG store. Laurel perused the AG website and decided that she wanted another doll (for playdate purposes). I groaned a little. Okay, a lot. We told Laurel that if she wanted to buy another doll, she would need to pay the entire difference plus tax and shipping (because neither Jon nor I were willing to go to the store, even though we knew where it was this time around). She looked troubled, as withdrawing $70 to $80 from her bank account was clearly not something she wanted to do. I suggested selling some of her high-value, rarely used toys and that since I was always happy to get unused things out of the house, I would help her list items on Craigslist.

Laurel proceeded to pick items from her toy collection to sell, we listed them, I managed the e-mails and appointments, and within a couple of days she had enough money to pay for the balance, tax, and shipping for her second AG doll. I helped her order online and she was proud of the purchase and even had some money left over to put into her savings.

After I closed my laptop I figured we were done with the AG conversation. And then I felt a tug on my sleeve. Laurel had one more question: “Mom, you really should get something for helping me sell those toys and order the doll. Does an ice cream + $5 seem like a fair payment?” I couldn’t stop smiling.

Charitable Giving

Finally, charitable giving is worth mentioning, as it teaches your kids about the wider world. If including a charitable component in your kids’ financial setup feels overwhelming at first, feel free to hold off for now. But, for many families, charitable giving completes the spending/saving picture by showing kids that their money can make a difference in the world.

After learning about rainforest endangerment at school, Laurel kicked off a summer-long rainforest fund-raising drive via lemonade stands, puppet shows, and jewelry sales.

You also can frame conversations about charitable giving with your kids through general family gifts.

My Kids’ Mom of pookandbug.blogspot.com, via the Minimalist Parenting blog: My husband and I get requests for money from charities almost every day. We set up a monthly budget for charity. Each year we choose eleven charities. We try to choose a variety that reflect our values and are diverse so we don’t load up one type, such as all environmental. Then, each month we send the same amount of money out as a donation. Each charity gets one month, our budget stays even, and we have a simple answer to get off the phone (“Sorry, we didn’t choose you this year, but we will consider your cause next year”). You may notice that we only give to eleven charities in a twelve-month year. We know that friends, family, and coworkers will come up with something and the final open month gives us the chance to be more spontaneous.

Money typically is a topic that inspires anxiety and dread. But you’re now taking the steps to decide what’s worth your spending, gather data, and work out systems and practices that work for you. Yes, it takes an investment in time to wade through the emotional and practical budgetary details, but once you get to the other side, you’ll unlock energy (and possibly more money) for the important things in your life.

SIX WAYS TO SAVE HUNDREDS A YEAR

Saving money can be easier—and sometimes more fun—than you think. We asked the ever-stylish bargain hunter Melissa Massello, “Stealfinder in Chief” at Shoestring Magazine (shoestringmag.com), to share some of her favorite, most innovative ways to save money:

DIY versus Buy

Instead of running around town to various stores, burning gas and precious time in search of the best deal, consider making favorite staples (whatever those might be for your family) from scratch. DIY projects such as homemade play dough or granola are a great way to get kids and parents working together, learning new skills, spending quality time together, and contributing to family needs, providing a sense of accomplishment and lasting memories/habits that kids will (hopefully) take into adulthood. And not only can DIY save you money, it allows you to control what goes into the things your family consumes—keeping toxic or questionable ingredients out of your home (and growing bodies). Pinterest was made for finding countless DIY ideas for anything you might like to try from scratch.

Marble Jar Money Lessons

My best friend from childhood now has three beautiful kids (ages three, five, and eight), and she and her husband have made certain things like consuming fresh, organic fruits and vegetables a priority for their family—and their budget. Each time their kids ask to go out for a meal, they ask the kids what they would order. If, for example, it’s chicken, broccoli, and ziti, they note that there’s chicken, broccoli, and ziti already in the fridge, and ask whether they’d really like to use that money for a meal out or if they’d rather save it for something fun, like going out for ice cream or to the movies. Each time the kids make the savings decision, a colorful marble goes into a mason jar on the kitchen windowsill. When the jar is full, they do something really fun as a family, whether it’s something inexpensive like a picnic followed by a trip to the local ice cream store or something a little more splurge-y such as a Red Sox game. The kids quickly learned about the benefits of saving for something special.

Move It to Savings

For adults, it’s one thing to say that we’re “saving” by not spending, but when that money is just sitting in our checking accounts it’s A) likely to just be spent on something later and B) not gaining valuable interest. Any time you employ savings tactics like DIY-ing something from scratch or saving with your kids through the marble jar method, use a tool like ImpulseSave or SmartyPig to quickly and efficiently estimate the amount you saved and actually move that money into your savings account, where it will grow in value. During a two-month experiment, I saved $259.90 plus forty-five cents in interest, without even really trying. This. Works.

Meal Planning and Food Priorities

In September of 2008, two San Diego public school teachers named Christopher Greenslate and Kerri Leonard decided to try an experiment: Could they each live on just $1 per day for food, the global average? (They subsequently attempted to each live on $4.13 per day, or $462 per month, the food stamp allotment for a family of four in the United States.) Their resulting blog-to-book, On a Dollar a Day, is a must-read for anyone trying to budget, and also brings up dozens of food source and food justice issues for families to consider and learn from. The number one takeaway: by simply prioritizing ingredients, buying in bulk, and planning each week’s meals in advance, families can save hundreds of dollars per month on food alone.

Budgets Are Sexy

Make budgeting a fun weekly activity by motivating yourself, your partner, or your family with a small indulgence after the budget has been updated each week, like a make-your-own ice cream sundae bar (or a post-dinner glass of a favorite wine for the adults) and a recent-release movie On Demand at home. Sunday nights are generally the best time to do the weekly budget, because everyone is preparing for the week and is more likely to remember upcoming expenses like field trips, club/team dues, classes, birthdays, and so on. “J. Money” of the aptly named blog budgetsaresexy.com has collected hundreds of tools, tips, and resources to help you get started and stay on budget while having a laugh, if not a blast.

Embrace Secondhand Style

Between the states of the economy and the environment, buying secondhand really has become part of many peoples’ everyday lives. As cofounder of The Swapaholics, I’ve gotten to participate in the “collaborative consumption” movement—also known as good, old-fashioned sharing and common-sense resourcefulness. By borrowing, renting, sharing, swapping, and thrifting the things we need for the time we need them—versus owning them forever—families can save thousands of dollars per year. Tech startups like Netflix (movies) and Zipcar (transportation) paved the way for a worldwide sharing movement that now includes everything from renting houses (Airbnb) to cocktail dresses (Rent the Runway). Swapping clothes, kids’ gear, sporting goods, books, games, even food, through swap events like ours or those held by organizations like Peace, Love, Swap, or through websites like swapmamas.com will help families turn what they already own into what they need and save thousands of dollars per year in the process. There’s a swapping or sharing community for practically anything you might need, from power tools to hockey goals. Plus, often the items you find at swaps or Goodwill are brand new!