Teaching our children Basic Financial Planning, Budgeting, and The importance of being frugal.

Trash pile up

Source

Prologue

Financial Planning and Budgeting are basics everyone should learn in their school years. Unfortunately, these basics are seldom taught and many people have no clue how to budget their paychecks.

It is all about teaching our children how to manage their money, sticking to a budget, being frugal, and still live a happy life.

This hub is not just about teaching your children how to budget their money, it is also about being frugal and how important it is to stop excessive wasting of natural resources and food.

This is a country of "throw away" goods. Our society thrives on wasting products.

All manufacturers make their products with a short life span to force us into buying more of their goods.

It is all about greed and higher profits for them. It is the basic premise of capitalism. As regulations are discarded the incidence of greed grows and so does the garbage pile up all around the world.

Where does it all end? Can we, as a species, survive this greed, waste and pollution indefinitely?

It is like a sickness in our society. People are taught that greed is good and capitalism is a better way of life than putting limits on how much "stuff" a person can hoard at the expense of the health and safety of others around them.

Logic and common sense have left us to drown in all this madness.

Excessive waste in the World

Small town USA

Main street small town USA
Main street small town USA

Background history

I grew up in a small town in a very northern New England isolated area. My father did "seasonal" work and we never had a steady "fixed" income. The only budgeting was deciding which bills had the highest priority when money was at hand. Not that we ever lacked for anything. We just had to be frugal.

There were no T.V.s, cell phones, video games, Internet or any of that type of 'luxury' we enjoy today. We certainly could not miss what we never had.

We had no electricity in the house.

Heating in winter was done by wood stoves, or kerosene burning heaters.

Cooking was done on a wood stove that had a water tank on one end of it that we kept full at all times. It was used to supply warm/hot water for cleaning, washing dishes and bathing.

Lighting was supplied by kerosene or natural gas powered lamps and candles.

Water was supplied by a hand pump built into the counter right next to the sink. Instead of turning a faucet, we just pumped the handle for fresh cold water. (All the modern conveniences right at hand).

"Toilet facilities" was an outhouse attached to the back of the house. It provided privacy, but you had to take a portable heater and lamp with you in winter and after dark. For really cold winter days, and night time, we had a portable "commode" in the house that would have to be emptied into the outhouse and cleaned after each use with soap and water to be ready for the next person's use.

I don't think any of today's spoiled rotten kids could ever survive those kinds of everyday 'hardships' that we had to endure on a daily basis. (Of course, they were not really 'hardships' if you never knew any other way of life)

But, i digress. When i was old enough to work, i managed to find a job working for one of the local lumber/saw mills in the area. Along with the job, came a steady income that helped my family make ends meet a little more easily.

When electricity was finally brought to this small town, it was a luxury beyond compare:

  • Electric lights,
  • a refrigerator (to replace the ice box),
  • an automatic washing machine,
  • and best of all, a radio to listen to music and news from around the state and locally.

Wow, we finally discovered that there really WAS a whole world outside of this little sheltered town we grew up in.

Along with all these modern conveniences came the expense of maintaining them. I was very conscious of living expenses and did not want to go backwards because of no, or poor, financial 'planning'.

So, i made a simple list of things that needed paying on a monthly basis, in order of their priority, to stay within my total monthly income.

A penny saved is a penny earned

Source

Starting a family

Source

Teaching my children frugality

When i got married and started having children, it was more imperative to keep track of expenses versus income.

I made my monthly budget out diligently and hauled it out to display to my wife and kids when they wanted something that one of the neighbors bought, that they thought we also needed, and simply could not live without, never mind be able to afford to buy it.

That old "keeping up with the Joneses" mentality didn't take long to gain its foothold in our household.

We managed to survive and grow and progress with the times. My family hated it when i hauled out my monthly budget with every request for purchase of something we really did not need as an essential for survival.

As my kids grew up and married, in spite of their childhood dislike for my monthly budgeting, they found it was an essential element to their own family's survival as well.

That budget of mine was the source of many tales of woe by my wife and kids, but we all managed to survive and thrive in the ever growing and expanding world that was rapidly encroaching upon our private everyday lives.

They still laugh at me today, as i maintain my old habit of handwriting my monthly budget. It is done on any annual basis-month to month planning.

Epilogue

I am attaching a sample of that original budget (which of course was actually handwritten), and the new and revised current version of it to reflect "fixed" monthly payments, those that can be paid by "electronic transfer of funds" (EFT), and those that i have to physically (remember) to pay to avoid late payment penalties.

Things today are much more complicated and yet simpler with the computer, and income being electronically transferred into your personal checking account by your employer (or your retirement checks - when you reach my age).

All in all, my kids are as diligent as i was (still am) in regards to obligations to creditors and family member to ensure that they will be taken care of in the best and easiest way possible.

I never leaned about investment brokers, or investment portfolios, or those other terms that you call someone else that manages your money for you. I can't say i ever trusted that to happen - allowing someone else to control my finances.

Over the past few years, seeing companies go under with the CEOs walking away with millions (heck- billions) of dollars in their personal bank accounts and leaving their employees losing everything (job, incomes, plus their retirement funds), i am darned glad that i never put my trust in those crooks and neither have any of my children.

They learned never to place all their eggs in one basket, so to speak, so that if their employer goes down the tubes, it will not be totally devastating to their families.

Sometimes the old ways are the best ways. I would not have changed any of it, even if i could have.

Life was simpler then, and we were closer and happier as a family than folks are today.

Even though i still remain frugal in a lot of ways, i am far from conservative in my beliefs and family values.

Our society is ever growing and changing and we must learn to adapt to the times. We accept all other folks for what, and who, they are without prejudices, hatred or intolerance, and my grandchildren are being taught those same basic and decent values.

We respect ourselves and others and belong to no specific religion and harbor no guilt, fear or anything else that main stream religious cults teach their flocks.

We all still believe that there is one creator; and that respect, love, compassion, and helping each other, are the only values that our creators actually care about.

by: d.william 01/21/11

Original budget

Bills
January 1943
Feb. 1943
March 1943
April 1943
Heating fuel
variable
 
 
 
Electricity
"
 
 
 
Food
"
 
 
 
Clothing
"
 
 
 
 
 
 
 
 
Total expenses
$ (variable)
 
 
 
Total income
$ (variable)
 
 
 

Sample monthly budget in order of priority

Account names
January 2011
February 2011
March 2011 thru December ------->
 
1. Mrtg/Rent - EFT - due on 1st
$ fixed amount - (paid)
 
 
 
2. Auto - fixed - EFT - due on 12th
$ fixed amount - (paid)
 
 
 
3. Home Ins. - EFT- due on 1st
$ fixed amount - (paid)
 
 
 
5. Electric - EFT - due on 15th
$ alloted (variable) -(Pd)
 
 
 
6. Internet /land line phone - due 15th
$ fixed amount - EFT (paid)
 
 
 
7. Credit card #1 - EFT - due on 7th
$minimum + some on principle-(Pd)
 
 
 
8. Credit dard #2 -EFT-due on 7th
$minimum + some on principle(Pd)
 
 
 
9. TV cable/sat -EFT- due 25th
$ fixed amount - (paid)
 
 
 
10. Gas for auto Estimated
$ alloted (variable)
 
 
 
11. Food - Average
$ alloted (variable)
 
 
 
12. clothing/travel exp
$ alloted (variable)
 
 
 
13. Home taxes (estimated)
$100.00 --> to savings = 1/12 fixed
 
 
 
 
annual tax total
 
 
 
 
 
 
 
 
total expenses per month ----------->
$(variable)
 
 
 
 
 
 
 
 
total net income per month---------->
$ (fixed)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Sold my Soul to the Company Store

© 2011 d.william

More by this Author


Comments 10 comments

always exploring profile image

always exploring 5 years ago from Southern Illinois

This rings a bell so loud and clear. I was the last of twelve children born in poverty. Since i was the last,i don't remember how really bad it was, but am told that it was very much like yours. I remember listening to a battery radio, which was so wonderful to me. You are so exact when you said that kids today have no idea and sometimes, i wonder if they could survive as we did. Thank you for sharing your story.

Cheers


d.william profile image

d.william 5 years ago from Somewhere in the south Author

http://hubpages.com/profile/always+exploring

You are so welcome. And thanks for taking the time to read it and comment. That means a lot to me. dw


MyAtm 5 years ago

That was some story, people can get a thing or two by reading your article. You stayed on top of everything, specially the monthly budgeting. You also involved all the members in your family, which is very important if you want their cooperation. Great article, very touching as well. thanks for posting, more power.


d.william profile image

d.william 5 years ago from Somewhere in the south Author

http://au.finance.yahoo.com/q/hp?s=MYA.AX

Thanks you for reading and commenting. Your comments are appreciated.


Spirit Whisperer profile image

Spirit Whisperer 5 years ago from Isle of Man

This is a great illustration of living within our means and is something few do nowadays and why so many find themselves with such financial problems. This should be a subject in schools but corporate America thrives on people living beyond their means so this would never fly with the education boards! Living with a "ceiling on desires" is what I call it and I have tried to practice this in my life and with my own family but perhaps not as diligently as you. I have succumbed and many times given my children things they did not need but I don't make it a habit. Thank you for another great hub.


d.william profile image

d.william 5 years ago from Somewhere in the south Author

http://hubpages.com/profile/Spirit+Whisperer.

Thanks for reading. I have always had the sense of knowing that there would not be anyone in this world that i could rely, or depend on, so it was imperative that i live within my means to insure independence as much as possible. I never wanted to be a burden on anyone.

To reinforce this concept i had a brother who was just the opposite. He was self indulgent, and took everything he could from anyone who would give it. And often at the expense of hurting others by his selfishness, and attitude that the world somehow owed him a living.

I was blessed throughout my life with a good career, a good income, and the peace of mind that comes with independence from ever asking for anything, or expecting anything from others.

You are also correct about corporate America enticing and luring everyone into debt prisons they can never escape from. Sad commentary of our "culture" isn't it?


Spirit Whisperer profile image

Spirit Whisperer 5 years ago from Isle of Man

Yes, it is a sad commentary of our culture.

By the way how did you get on with your brother? And why do you think that you were both so different. Were you brought up differently? Was there a big age difference?


d.william profile image

d.william 5 years ago from Somewhere in the south Author

http://hubpages.com/profile/Spirit+Whisperer.

Your question makes me look back on those days with different eyes than i did when they were being lived. That brother (i have 5 of them) was 2 years older, but he learned young that by being 'needy' he got all the attention from our parents, so he soon became their 'favorite' and certainly took advantage of that fact.

He was totally obnoxious, mean spirited, and thought nothing about doing bad things and telling our parents that i did them. So, he got away with things, then laughed at me and them behind our backs, because he saw this as being superior. He did a lot of mean, hurtful, and hateful things to me and others his whole life. I can honestly say, i do not like him, and have not spoken to him for many, many years. I always tell people, that if someone hurts you, and you do not like them, it is OK to exclude them from your life. So i practice what i preach. Without any reservations or regret. Some people just do not deserve to be called 'friend', or 'relative'. Everyone has gone their own ways, live in different parts of the country, made their own lives, and sort of abandoned the rest of the family.

OK, now i am depressed. L.O.L.

There was such a wide age range (there were ll pregnancies) that the younger ones never really knew the older ones, and vice versa.

Now i feel like a patient in psychotherapy. Do you charge for long distance counseling? L.O.L.


tamarawilhite profile image

tamarawilhite 5 years ago from Fort Worth, Texas

Junior Achievement is a life skills / business skills course written for middle and high school students. Their workbooks on incomes for different jobs and budgeting for different life styles (living at home or in a big apartment by yourself, brown bag versus eating out) were an eye opener for my daughter.


d.william profile image

d.william 5 years ago from Somewhere in the south Author

http://hubpages.com/@tamarawilhite

thanks for reading and commenting. Sorry for the delay, when they switched things around here on hub pages, i missed a lot of comments that i am now running across, such as yours.

When i was in school (way too many years ago for my comfort) we had no formal teaching about budgeting, how the government works, or how to start a business, and more..

Our education in this country is severely lacking in teaching just the basic skills for survival in this world. My biggest fear is that kids of the future will learn only how to use a computer, and every other gadget available to them, without ever learning the basics of what they represent, or even how to count from 1 to 100.

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