Saturday, January 20, 2007

If Your Teen Can't Save - Do it for Her

I highly recommend requiring that your teen save a percentage of all money he or she gets. Once a kid becomes a teenager, there are going to be savings goals. It's a built-in fact of life.

All teenagers are going to be looking forward to something expensive. Whether it's that big end-of-school-year trip, a car, or prom clothes, you can bet something big is on the horizon.

If your teen gets money, he or she should be responsible for, at least, some part of those expenses. This is a prime opportunity to teach them money management skills.

Saving for a goal is a major part of money management. So, don't let the opportunity pass by.

But, saving money can be tough for a teen. If it's hard for adults to save money, imagine how much more difficult it is for someone who has very little experience curtailing that temptation to spend.

So, if you find that some portion of your teen's money is not being saved, you may have to save it for them.

I take
5% - 10% from all money my daughter receives (gift checks, odd jobs, etc.) and transfer it into her ING account, then give her the rest. I even deduct 5% of what I plan to spend on her for birthdays and Christmas and put it in her savings account.

This way she is not tempted to spend it because she never has the money in her hand.

My teenager gets a tremendous feeling of satisfaction from watching her savings grow, even though I'm making her save.

Your teen may balk at a requirement to save at first, but once he or she sees the money growing I don't think you will have any more problems. You might even be surprised by having your teen bring her last bit of change to you and asking you to put it in her savings account. How sweet is that!

Wednesday, January 17, 2007

Time to Increase 401(k) for Retirement

It's time. I've been thinking about increasing my 401(k) contributions, but I've been putting it off.

I have other goals - goals that I want to accomplish as quickly as possible - so it's been easy to ignore retirement savings since we are decades from retiring.

Everyone wants to think about the "now" not the "later". It's human nature, and I'm no different than anyone else when it comes to that.

But, when I think of the lost opportunity of NOT taking advantage of saving
Pre-Tax dollars, my frugal heart skips a beat. That's a lot of money we are letting slip through our fingers, folks.

For example, let's say you make $20,000 a year before taxes. *That puts you in the 15% tax bracket. You want to save 10% of your income for retirement. In pre-tax dollars you will save $2000 each year.

But, if you don't put that money in a tax deferred account like a 401(k), you will only save $1700.

You've just lost $300 - plus all the interest it would have generated.

It's gone forever.

It belongs to the government now.

Are you happy with that? Three hundred dollars is a lot of money to just give away, don't you think? Especially when it's going to the government. They already have enough of our money.

So, I am going to just bite the bullet and increase my 401(k) deductions. In take home pay, it will only decrease our income by a few dollars a week.

How about you? Are you ready to stop letting the government take such a big mouthful, and keep more of your own hard-earned money?

*These tax calculations have been simplified. For a more detailed explanation of your tax bracket, I recommend Moneychimp

Monday, January 15, 2007

Bowling Update

We went bowling Saturday evening. It was fairly fun, but I thought it was a bit expensive. Only two of us bowled, so it cost $17 to bowl two games. Well, one dollar was for a can of diet Pepsi, so it really cost $16 for those two games.

Since only two of us bowled, the games went quickly. The first game lasted close to an hour. I think that was because it had been so long since anyone had bowled. We had also forgotten how to keep score and had to go ask the employees of the bowling alley. The second game only lasted about 20 minutes.

The cost broke down like this: $2 per person to rent shoes, $3 per person per game. So, the first game cost $10 for two people. The second game was $6 (since the shoes had already been paid for, the second game was cheaper).

So, for $17 we got approximately an hour and a half of entertainment. I guess if you really like to bowl, that's not too bad. But, if you are a real Tightwad like me you probably think that was too much.

We will probably go bowling again. Kim really liked it, and it was a good place to take the kids. Although they sold beer by the can ($2.25 each), I don't think anyone was drinking much. I certainly wasn't about to pay a markup of 300% just to have a beer.

If you haven't been bowling in a while, be prepared to be a little sore the next day. Those bowling balls are heavy and it works your arms, shoulders, and legs to toss them down the alley.