Inbudget Credit and Finance Advice Control your debt and credit through proper budgeting

A Harvard-issued report says immigrants and their children may comfort rigorous the biggest housing crisis in 60 years — but don’t look a big boost in prices.

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On the one hand, some parents say kids should get an allowance when they are very young so they have an opportunity to start interacting with and managing money.  Other parents think they do a disservice to their kids if they just give the money without making the kids work of for it.  Thus, they wait until the kids are old enough to start earning money.

Photo by theritters via Flickr

When To Start Your Child’s Allowance?
Step #1:  What financial lessons do you want your children to learn?

This might sound like a meaningless process, but every financially savvy family has important things that they want their kids to learn about money.

I’ve adopted a hybrid to the common approach that money can be used for three things – give, save, and spend.  In my case, I’ve added a fourth category: give, save, spend, and live.  In this way, I’ve made a conscientious decision to try and teach my kids that there are two ways to spend — for living and for pleasure.  I believe that is an important distinction for kids.

Associated with these four components, I want to teach my kids how to manage and how to budget money.

Step #2: Develop a children’s allowance and education system that enforces the lessons in #1.

In our case, we’ve tried to set up a system that teaches our kids there is an association between work and money.  As a result, we’ve given our daughter (our only child old enough to participate in the family plan) a simple, extra job that she gets paid to do.  We’re doing our best to teach her that some work is just a regular contribution to family, while there are other extra jobs that we will pay her to complete.

For us, we’ve got three jars with the words — give, save, and spend written on them.  Two days a week she drops one coin into each jar.  On the seventh day, she chooses any jar she wishes.  At this point, it is too early to try to differentiate between spend and live money, so we don’t make any mention about that.  Teaching kids about money doesn’t have to be boring.

Here are three games to help kids learn about money management.

Step #3: Be flexible and re-evaluate based on each child’s need

Each kid has a unique disposition.  What worked for one of your children might not work for another.  What worked when your child was 8 might not work when they are 10.  This parenting journey is all about flexibility and re-evaluation.  I know as parents we are going to make a lot of mistakes along the way.  If, however, we make a mistake, we should do our best to correct the situation in whatever way possible.

How Much Allowance Should A Child Receive?

This answer is dependent on the age of the child and the responsibilities and expectations of the family.

I’ve heard different guidelines.  Some say give a child per week for each year of age (I read this in a post by Silicon Valley Blogger).  Like Silicon Valley blogger, I think this is far too high.  A ten year old getting 10 bucks a week?

Give kids enough that they get to enjoy a few small luxuries, but not enough that they can buy whatever they want.  Instead, I would rather teach my kids to save for bigger items.  Financial sacrifice and delayed gratification are important lessons for kids to learn.

As such, the amount should be completely dependent on your stage in life.  At this point in my life, I can’t see myself giving much more than -30 per month.  When the kids are old enough to want more money, they are old enough to start a summer business.

On the topic of kids and work, it is important that you familiarize yourself with kids Roth IRA requirements so that you can be sure that you don’t use a kid’s allowance as the basis for opening a Roth.  This is the time to start deciding if you will make your kids work for college or pay for it.

Pay Based on Chores or Flat Allowance?

This is the raging debate in children’s allowance circles.

Advantages of chores-based allowances:

Kids learn the close relationship between work and salary.
Kids will be able to manage their own money.
Kids will learn work ethic along with money management.
Giving what you own is more valuable than giving what others gave to you.

Advantages of flat allowance:

Emphasizes the importance of the family unit.  The family is cared for regardless of one’s contribution.
Kids learn the importance of contributing to the affairs of life without expecting any payment in return.
Kids will be able to handle money.
Kids may be able to start investing if they get a big enough allowance.

As a note, I don’t feel comfortable paying my kids based on grades or other superficial forms of performance.  I want to see character, work ethic, passion, integrity, and commitment from my kids.  None of those things can be measured by a school grade.  In our society, there is already plenty of pressure to outperform peers, and I just don’t want my kids to feel like they have to compete like that.

What are your thoughts on the topic of kids and allowances?

Read more about:
budget money, parents, financial lessons, earning money, Roth IRA eligibility, summer job, allowance

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Source: Children’s Allowance: When To Start and How Much to Give? from Moolanomy Personal Finance, written by Craig Ford (Staff Writer).

Copyright © 2007-2010 Pinyo Bhulipongsanon.

I’m not exactly sure when parents started giving allowances to their kids.  I wonder if that was around the same time when the tooth fairy started stock piling teeth.  However, somehow kids are introduced to the economics of life when they are just wee little humans. All rights reserved.

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A Harvard-issued report says immigrants and their children may maintenance righteous the biggest housing crisis in 60 years — but don’t look a big boost in prices.

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All rights reserved.

Without a doubt you need to exercise your right to these options and fast. If you discovered that you owe money to the IRS but can’t come up with the money to take care of the debt, understand you have options. The IRS understands that people have a variety of issues and there is no one-size-fits-all solution to helping people pays their back taxes. The process is not an easy one and you’ll need to provide significant documentation proving your hardship situation. Do what you can early to prevent mistakes come the next tax year. But they can not help you with your tax issues if they don’t know what problems you are having that prevent you from settling your debt.

If you do not contact and stay in communication with the tax office, you are subjecting yourself to a lot of legal and financial hassles. The last thing you want to do is avoid the IRS.

Photo by blmurch via Flickr

Owing Up To Your Tax Responsibility

Owning money to the federal government is like no other debt you are responsible for paying. Your payroll representative can help you do the math to ensure you either break even or get a refund. They are an agency that is willing and able to help you make it through your tax problems but can only be of service if you keep them in the loop.

Prepare Better

If you owed taxes for the first time ever, you will need to nip it in the bud and speak with your payroll department at work to change the status on your W-2’s. They are paying you nothing to use your money – money you likely will benefit from greatly if it is put back into your paycheck.

Read more about
hardship status, tax debts, installment agreements, IRS, back taxes

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Source: What To Do When the Tax Bill Is Due But You Don’t Have the Cash from Moolanomy Personal Finance, written by Tisha Tolar (Staff Writer).

Copyright © 2007-2010 Pinyo Bhulipongsanon. If you are eligible, the IRS will check in with you every couple of months to see if your finances have improved enough that you can make payments toward your tax debts.

Offer In Compromise

This method is a tax settlement opportunity for those who are really in financial trouble. The installment agreements differ in the time you have to pay back the money and are also based on the amount of taxes you owe. You never want to owe money to the federal government and by adjusting your withholdings you can avoid owing money each year. Prepare by accounting for your deductions, your expenses, and other information throughout the year and not only in the weeks before tax time.

Word of caution on a refund: You essentially want to aim to break even as getting a refund means you are loaning money to the government for free. Because you can pay much less to settle your debt, the Offer in Compromise is a very popular choice among those who owe the IRS and the government is very particular about who they deem as eligible to settle.

Tax Payment Soon Due

If you pay taxes quarterly and find you cannot afford to make the upcoming payment, get in touch with the tax office immediately to make alternative arrangements. The IRS will need to review your finances and make the hardship determination. If the IRS is made aware of your inability to pay due to medical reasons, job loss, or the other legitimate cause of financial stress, they will open plenty of doors for you to get help. If you let your debt bypass you, you will end up owing way more money than the original balance. If the debt goes unpaid, your wages could be garnished, liens could be placed on your home and property all in pursuit of the debt. Having options to take care of your tax bill is to your advantage. The following is a list of IRS offerings people can utilize for resolving their debts.

Installment Agreements

There are several installment agreements that can be used which allow payments to be made over a period of time, generally in monthly increments based on what the debtor can pay. The IRS has some pretty big guns when it comes to collection practices. You must prove to the IRS that the amount owed will likely never be paid back due to financial concerns. Contact the IRS office or visit the IRS website to determine which agreement suits your needs.

Hardship Status

If you can provide to the IRS that you are in serious dire straits financially, you may be eligible to have your account put on hold temporarily. They can literally freeze your finances and your life until your debt is satisfied. They realize there are different circumstances among different people necessitating a variety of options to get rid of tax debts. Not only will you still be responsible for the original debt, you’ll also amass plenty of fees and penalties for ignoring your debts.

Handling Your Tax Debts

The IRS has set up several options for helping people take care of their tax debts. It allows you to pay back less than the original amount owed in back taxes.

Back in April you might have filed your federal income tax forms only to find you actually owe money to the government instead of breaking even or getting a return. Don’t hide from the IRS for any reason. It can be a trying time for anyone especially in light of the recent recession woes affecting personal finances. The worse thing you can do is not file taxes if you are afraid you cannot pay them.

Communication when you owe taxes is instrumental to staying out of trouble with the federal tax office.

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Here are 10 moguls who rose from adversity. People from backgrounds of hardship — with little to lose — may be deficient afraid to take big risks.

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They have lives freer of medical predicaments and financial worries, even though several aren’t well-off. Those who hit the 100-year milestone don’t lawful have longer lives.

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Put theme ideas contributed by all family members into a bowl at the start of summer. Just because money is tight doesn’t mean ‘big fun’ is totally out of the picture. Choose to celebrate the theme day on a Saturday (or any free day when everyone can be involved) and just run with it. Think back to your own childhood memories. You can purchase a few canisters of drink mix, a bag of ice, and help your kids set up a neighborhood stand. There are camps, recreational programs, swimming activities, and many other services provided free to kids throughout the summer. Help kids make grass skirts out of newspaper, palm trees from construction paper, visit the farmer’s market for fresh fruit, and spend time dancing in the yard.

Inspire a Little Entrepreneur

On a hot day, a glass of cold lemonade is best. Not everyone is running as hard to keep up with the Jones’ in light of the foreclosures and debt problems families are still facing. These cool places typically cost a lot of money in admission fees and food prices. In fact, the one thing that can make for great family time is actually free.

Photo by moonjazz via Flickr

Creativity doesn’t cost a thing. But lack of funds doesn’t necessarily dictate a hum-drum summer. Research ticket prices and the overall cost of spending a day there with the whole family, then sit down with the family and think of ways to save cash toward the day out. Guarantee that all proceeds be used as per the kids’ wishes, whether it be for a bit of summer fun or even as a donation to the less fortunate.

Invest in Volunteering

A bunch of ungrateful kids complaining about nothing to do all summer can quickly burn out the nerves of even the strongest parent. Every community is different and programs vary but even the smallest towns likely have some resource that will not drain your wallet. Tip: For older teens who may not be as inclined to participate, host a similar idea once a month but include their friends too. Beats hanging out at the mall.

THEME IDEA: Host a Hawaiian luau theme. Stay in ‘character’ as it relates to theme, eat food that relates, and make the most of your family time. Take a poll as to where the kids would love to spend a day. A few hours of giving can make a world of difference in gratitude amongst your children and has a huge impact on your community as a whole. VolunteerMatch.com offers information about the different kinds of opportunities available in your area.

Save for Big Fun

Wherever you live, there is likely some kind of ‘big fun’ within driving distance where the kids would love to visit – an amusement park, the beach, kid-sized adventureland. Teaching your kids to have a work ethic is priceless. They will be less traveling and likely more whines of boredom when money concerns limit parents and their fun-ability. Take the kids to an age-appropriate day of volunteering. Every Sunday, draw a theme slip from the bowl. Work with them over the week to create posters and handcrafted fliers to promote the event. All rights reserved.

With proper planning, anything is possible and now is a good time to teach the kids about savings and planning. While frugal is much less of a curse word now that it has been in the past, many still overlook the free activities in their own neighborhood. By cutting back on extras with a goal in mind, kids may be much more willing to forgo ice cream in favor of saving. Allow each member of the family to come up with ideas of how to celebrate the theme at the end of the week and put them to task at coming up with decorations, food items, and other related items you already have around the house. Younger kids don’t need a complicated financial lesson but teaching them about working hard for something they really want is an incredible lesson at any age.

Free In the Community

Some families that were hit hard by the recession were not previously used to cutting back so abruptly on expenses still find a stigma associated with ‘free’ things.

School is about to close its doors and release kids into an extended summer vacation but with money tight for so many families around the country, many parents are fretting about what to do with the kids at home. A little imagination can go a long way and there is no need to spend money.

Getting back to basics is becoming more common and more acceptable. It keeps the kids interested and busy during the week. With a little research and a phone call or two, you can discover a wonderful world of ‘free’ children will actually enjoy. A family of four can spend close to 0 for a single day outing. Animal shelters, children’s hospitals, homeless kitchens, and elderly care homes all are in need of assistance on any given day. So get your mind working and try one of these five things to get your mind motivated to make your own fun:

Plan a Theme Day

Kids love something new. If your area doesn’t offer compatible activities of an age-appropriate nature, start your own amongst the other parents in your area. Isn’t it true that some of the best times you spent as a kid where not the times your parents spent tons of dollars to entertain you but rather the times they spent tons of time with you.

Read more about
teens, money concerns, saving money, free activities, frugal families, summer

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Source: 5 Nearly Free Things To Do With Your Kids This Summer from Moolanomy Personal Finance, written by Tisha Tolar (Staff Writer).

Copyright © 2007-2010 Pinyo Bhulipongsanon.

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