Beating Broke

It’s O.K. If Your Kids Are Bored This Summer

June 1, 2016 By MelissaB 4 Comments

Ah, summer. A time of relaxation, heat, and. . .boredom?

Yep, boredom. When I was a child, the big activity for the summer was to go to Vacation Bible School one week of the summer. The rest of the time, well, my days stretched wide open before me.

I might read a good book, or run through the sprinkler, or eat a popsicle, or lay on the grass looking at the clouds floating by or go bike riding with my friend or play on the swing set or play with Barbies.

Those were the days of summer.

I loved every minute that I was out of school, but by mid-July, after the excitement of the 4^th of July holiday wore off and I’d been on summer break for several weeks, I often found myself bored. I mean b.o.r.e.d.

Kids are Bored this Summer — Org. Img.: Bored by Marcus Nelson on Flickr

I was actually excited and ready to go back to school.

Do kids today feel that anymore?

The answer, typically, is no, but it’s O.K. if your kids are bored this summer!

Summer Can Hit Your Wallet Hard

If you want to keep your kid busy all summer long, you can expect to spend quite a bit of money doing so. I have a friend who is paying over $1,000 for her seven year old to attend summer day camp for a few weeks. And that is just one child!

Of course, families with two working parents must find ways to make sure that their kids are cared for, so that is part of the reason why kids are overbooked. But my friend whose paying for her daughter’s summer camp is a stay-at-home mom.

Boredom Is Not a Bad Thing

However, if the parents are in a situation where they can let their kids get bored, i.e. one parent stays home to take care of the kids, boredom might not be such a bad thing. Nancy Darling, a professor of Psychology at Oberlin College, states, “From a developmental perspective, kids have very little experience learning to find things to do FOR THEMSELVES. They have been PASSIVE. Adults shape their activities. When they get to the point where they are too old for that—or there just aren’t adults to do it—the kids are at a loss. They might know what they like to do—or what they don’t—but they have little experience figuring out how to make good things happen. Boredom is okay” (Psychology Today).

Think about times when you were bored as a kid. Those times obviously didn’t last forever. You found something to do. You may have compromised and played a board game with your younger brother even though you really didn’t like playing with him, but anything was better than boredom! You may have written a story, or created a Lego invention, or made a new imaginary game.

Alyson Jones, who is a counselor, states, “Boredom is not the enemy to be conquered by action and another planned activity. Boredom can be a vehicle to creative thinking, self-awareness, empathy and compassion. When we are bored we are often alone with our thoughts—this is a great way for children to get to know themselves” (The Huffington Post).

If you have the flexibility in your schedule, why not give the kids some time to be bored this summer? Your wallet will thank you, and someday your kids might, too.

What do your kids do for the summer? Do you give them time to be bored or are they scheduled?

To Grow Wealthy, Stay Where You Are

May 27, 2016 By MelissaB 1 Comment

When I was little, I devoured the Little House on the Prairie series. I felt bad then for Ma and Pa. I felt bad for the way they struggled financially, facing setback after setback. I felt bad that they always had to move just as soon as they were settled.

But then I read the books again as an adult. Then I read them one more time to my daughters. Now I realize, as much as Pa was a loving father, he was responsible for a lot of his family’s financial hardships.

Life in Wisconsin was good for them. But once Pa got the itch to go west, his family never had a stable environment. They never got more than a few years into getting settled and making a life for themselves before they moved again.

Does Moving Now Cause the Same Financial Difficulties?

Most people would argue that life was different then, and moving around now doesn’t cause as much financial hardship, but as someone who recently completed a 2,000-mile move, I would disagree.

My husband and I had lived in Chicago for 14 years before we made the move last July to Tucson, Arizona. We went for my husband’s work and because the move would give us a lower cost of living and a pay raise for my husband. On paper, everything looked good.

We foolishly thought we’d stay for two to four years. Now, I’m not sure we should move so soon if we want to prosper financially.

Even though my husband’s employer paid for the move, we still had many expenses like setting up the utilities and paying deposits on them, buying a few new pieces of furniture, etc.

Breaking Even and Getting Ahead Takes Years

We bought a house when we moved here, knowing that we weren’t sure how long we’d stay. We’ve had our mortgage for 15 months now, and in that time, we’ve paid down $4,300 on principal. Our home has increased just $1,100 in value during that time. That gives us a cushion of about $5,400, but I’m guessing if we were to sell our house next year (which would be two years that we’ve lived here), we’d be losing money thanks to realtor fees.

We’ve also just reached the point where we’ve started to discover ways to save money in our new city. Now I know where the cheapest places are to buy groceries, secondhand clothes, etc. Our first few months here we spent much more than we normally do on groceries because I didn’t know which stores offered the best deals.

We also have finally found decent doctors and dentists. Our first few months here, we found out my daughter need 6(!) cavities filled. We had to go to four different dentists before we found one that we liked and could trust. All of those different visits cost us a little less than $200 out of pocket, and that was before her cavities were even filled.

Of course, I’m not saying never to move. In our case, the decrease in cost of living and my husband’s raise made it possible for us to own a house, which we couldn’t afford to do during our 14 years living in Chicago. However, the whole story isn’t just on paper. When you move, there are many incidentals that add up. Moving repeatedly can cause you to struggle financially.

It’s no surprise to me that the only time in life when Pa and Ma flourished financially was after Ma put her foot down and refused to move from DeSmet, North Dakota. Without the constant moves, they could finally get established and become comfortable financially.

How often do you move? Do you agree that frequent moves are detrimental to your finances?

Beating Broke Rules: Certificate of Deposit

April 28, 2016 By Shane Ede 1 Comment

What is a Certificate of Deposit? Certificate of Deposit (commonly called CDs) are basically a savings account that pays a set rate over a set term. The rate tends to be higher than a normal savings account rate because the money is locked into the CD for a set term. If you choose to withdraw your money before the term ends, you pay a penalty. The penalty is usually a preset number of months interest on the CD. At the end of the term, you can renew for another term at another set rate or keep your money.

Rules: Certificate of Deposit — Safe and Stable Investments

CDs are a very stable investment. They are also a very liquid investment. As such, they make for rather poor returns on the long term and they carry a penalty for withdrawal before the “maturity”. However, there are several uses that can make them a valuable part of your financial portfolio.

6 and 12 month CDs can be a great place to keep your emergency fund. Chances are you won’t need the money, so you might as well invest it. The key here is that the CD is a safe, stable, and easily accessible form of investment. You’ll still get the higher interest rates that you would expect from a high-yield savings and, depending on the term length, sometimes better.

As you get older, CDs can play an important role in your retirement accounts as a small percentage of your portfolio. Again, the stability and reliability of the nature of CDs makes is the key. As you age, a growing portion of your retirement portfolio should be in stable cash investments. Many will recommend something like a money market account or a high yield savings, but CDs are in that same group. And with a retirement account, you can usually tie the money up a little longer and get better returns. Look for something in the 2-5 year range for maturity.

As I mentioned before, one of the major drawbacks to CDs is the early withdrawal penalty. In most cases (consult your CD paperwork) the penalty is 3 months interest. So, if you were to withdrawal the money after only three months, you would only be able to withdrawal the original amount. If you withdrawal the money at only one month, you would get less than the original amount. Anytime after 3 months and you get the original amount plus any interest above the three months penalty.

While the penalty can be bad if you need the money early in the term, if you need the money for an emergency, it can be overlooked pretty easily.

Beating Broke Rule: CDs can be an important part of your investment portfolio