Browse Tag: balance

Making the transition from cash to card - dollar bills and credit card

Making the Transition from Cash to Card

For two years now, J has been using cash, paper and pencil to manage his money. I’ve been paying monthly interest and bi-weekly allowance in cash. I’ve been calculating interest payments in Excel and emailing statements.

My goal was to help him understand cash (and math) by using hands-on, practical examples.

It’s been awesome. J started with $40 in his savings envelope in April 2016 and had over $500 by June 2018. (Pretty good for a kid with no job.)

Time to move on

When he turned 10 a few months ago, I knew it was time to learn something else. Cash is great, but how many of us really use cash and only cash every day? His financial education needed to include the responsible use of cards.

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Bar chart for post on Risky Business of CD Rates

The Risky Business of CD Rates

Last November, J opened a CD at Ally Bank. The idea came from a big conversation we had about making his money work harder.

He invested $500 in a 2-year Raise Your Rate CD at 1.5% at Ally. This type of CD allowed him to increase the rate once during the term. (For reference, his online savings account was earning 1.25%.)

What happened

Fast foward to this spring and I saw the rates going up. And up. And up.

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Header for Pay Day - Our New Favorite Board Game

Pay Day – Our New Favorite Board Game

I don’t normally go out on Black Friday, but my sister and her husband came home this past Thanksgiving, so a trip to Target was in order. While shopping, I stumbled on a magical game called Pay Day.

A quick scan of the box showed that it was a money management game, and I knew I had to have it. Plus it was the “retro” edition, which made it even more desirable. (Why is that?)

I bought the game (for a discount because the Cartwheel price was lower than the in-store price) and we played our first game that weekend.

The Game

The rules are easy. Everyone starts out with $325 (in the retro edition). The board is a month, and before the game starts, you decide how many months you want to play.

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Header image for making your money work harder part 5 keeping track

Having “The Talk” About Making Your Money Work Harder: Part 5 – Net Worth

Welcome back to our five part series on making your money work harder! This series is part of a BIG conversation I had with J where we talked about other ways to invest his money beyond the Bank of Mom.

In part 1, we talked about savings accounts, in part 2 savings bonds, in part 3 CDs, in part 4 stocks and today in part 5 we’ll wrap up our discussion with keeping track of your net worth.

Paying attention

It sounds a little pretentious, doesn’t it? Keeping track of your “net worth.” Like something only rich people do.

But think about this. If you go on a diet, do you log your meals and calories? What about if you’re training for a marathon? Would you write down your runs and workouts? And if you want to cut back on social media? Would you track your time?

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Having “The Talk” About Making Your Money Work Harder: Part 1

I’m really excited to start this post today! J and I had some great conversations this weekend that I will write about in a five-part series on Making Your Money Work Harder.

First, we reviewed how we’ve already started making our money work harder by saving.

If you’ve been around for awhile, you know the drill, but just in case you’re new, here’s the skinny:

  • I pay J 3% interest on the money he puts into his savings envelope every month. I give him a paper statement and email him the same statement each month (posterity!). As he records the interest in his register, we review how the month went and look at how he earned more interest than in previous months. (Read one of our recent summaries here.)
  • A few times each year, we take a trip to our local bank and deposit the money. Bank visits are a great time for conversation, and J always enjoys going because the tellers are often really nice to him. They love to see kids!
  • After that, I keep the minimum in the account to avoid a fee and transfer the rest to an online bank that pays a higher interest rate. Read all about that here.

Today we logged in to the local and online bank accounts. We reviewed the amount in each account and noted the current interest rate. The local bank account has a rate of 0.01% — yikes! The online bank account’s rate is 1.20% — not too bad (comparatively speaking).

We discussed wanting a high interest rate when you’re saving (so you earn more). And when you’re borrowing, you want the interest rate to be low (so it doesn’t cost you as much).

Just a side note, we haven’t really talked about borrowing or debt yet. I’m hoping to get the savings and growth lessons underway to have more TIME on our side. After we talk about saving and investing, start the accounts we want to start and look/talk about them monthly, we’ll move on to borrowing and debt.

I told J that there were OTHER ways of putting his money to work, ways that may pay even more. He was excited! He pulled up a chair and said, “Okay, I want to know those things.”

I’ll cover each topic in depth in the subsequent posts, but as an overview, we dived into:

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