So...here is Session Three of Financial Peace...I really enjoyed today's lesson. Very, very good information.
Topic #1: Men & Women Relate to Money Differently
You all know this is true, right? Men want to get good deals by negotiating...women want to get good deals by hunting for the best bargain. Men want to get into a store and get what is needed and get out...women want to stop at every store and touch everything. To men, money represents self-esteem and is more of a scorecard. To women, money is security. These differences, of course, mean that we deal with money in different ways. With an agreed upon cash flow plan, both sides can get what they need. Knowing that the sexes relate to money in such different ways makes it a little easier to understand a partner.
Topic #2: Nerds & Free Spirits Balance Each Other Out
Usually in a relationship, one person loves forms and budgets and planning (the NERD), and the other person doesn't like to plan, and feels controlled by a budget and the nerd (the FREE SPIRIT). Here's what Dave Ramsey suggests having a "Budget Committee Meeting"...when figuring out your cash flow plan, the Nerd does a first draft. The Nerd is the one that enjoys doing this sort of thing anyway, so they get the majority done in the draft. Does it as they think it should be done, and then presents it to the Free Spirit. At this point, the Free Spirit speaks their mind and their wishes for the budget. The couple compromises and works the budget to best meet the needs of both people. The budget becomes "our" budget, something shared.
Topic #3: Teaching Children About Money
Teaching kids about money is YOUR responsibility. Most high school seniors graduate without even knowing how to balance a checkbook. So it is our responsibility as parents to make sure they are learning these things. Here are some things he recommends:
:: Allowance: set up a system where there are certain chores the child has to do each week. Have a chart that they can mark off as they do them. At the end of the week, pay out only for those chores that were completed. Pay out in single dollar bills so that...
:: Your child can set up a 3-envelope system. One for savings, one for spending, one for giving. Out of $5, for example, the child puts $1 in giving, $2 in savings, $2 in spending. This is a good system for kids 5-12 years old. They decide what causes to give to, they decide how to spend their money, and you take them to the bank to put their savings in an account every so often. This needs to be done CONSISTENTLY. Allowance GIVEN consistently, savings deposited consistently, etc. My personal plan is to withdraw money when we get paid, at the same time that I plan to withdraw my Blow money and Chris' Blow money. The Blow categories will be our envelope system, that's the money we can spend on whatever we want, and when it's gone, we're done for the month. So at the same time, I plan to get all of the monthly allowance money out, and have it ready to give to Aspen each Sunday after reviewing the chore chart. I know it takes consistency, and I will make that happen.
:: Children ages 13-15, Dave recommends opening a checking account for them to handle. You would deposit the money into this account that you would normally spend on the child each month, for clothes, for extra fun food, for toys, etc. The child (or teenager) buys their stuff out of this account, with your guidance. This step should really teach them that there is only so much money each month, and that they need to spend wisely so they can get the most for their money. You help them balance the checkbook each month. It's a joint, learning effort.
:: A great savings exercise for a teenager is to purchase their first car. A good plan is to offer to MATCH whatever they save for the car. He recommends that you should never just give a teenager a car. This does not teach the child anything. And when purchasing a car, the teenager should pay cash. No debt, no debt!!!!
I hope these things are helpful for you to read. Did any of you fill out a Cash Flow Plan for June? How's your progress going as we progress through the month? I've had to adjust a few things already, but I truly think that in a few months, we'll have it down. I hope you guys are having some success with it...