Browse Tag: communication

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Does Your Money Talk Match Your Money Walk?

If you’ve been around awhile, you know that my focus on National Bank of Mom is 1) teaching my son kick-ass money management skills and 2) fostering good communication between us.

I teach him how to balance his savings, spending and giving accounts, how to plan for a large purchase and how to save at least 10% of his income.

The more I thought about it, though, the more I realized that talk will only get me so far.

If I want to instill these skills in my son, I have to make sure I’m walking the talk. I have to look at my own actions and behavior and ask myself, “Is what I’m doing contradicting what I’m saying?”

Ralph Waldo Emerson said:

“What you do speaks so loud that I cannot hear what you say.”

That couldn’t be more true. So much of what we learn is unspoken. We pick things up from our friends, family and society around us — what’s “normal” and expected. How life works.

To that end, ask yourself the following questions and examine your behavior:

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“They Must Be Rich Because They Have a Pool”

Late last year, J took a trip with his dad to visit his cousins. When he got home, he recounted all his adventures and added, “they must be rich because they have a pool.”

A few years ago, I would have agreed with him. His cousins have a very large house, drive fancy cars and take elaborate vacations.

But then I read The Millionaire Next Door. (Here’s the first chapter if you want a preview!)

In it, the author makes the important point that you can’t tell how much people have based on what they buy.

Hearing it now, it makes total sense. But for 30+ years, I can say that that thought never occurred to me.

So we talked about it. I told him that you can’t tell how much people have saved. The pool doesn’t prove that they DO have a lot of money and it also doesn’t prove that they DON’T.

I brought it up again last night. I said, “Do you remember when you said that your cousins must be rich because they have a pool? Does having a pool or a fancy car or big house mean you are rich?” To which he replied no. I asked, “Does it mean that you aren’t rich?” And he also said no. (Woo! He remembered!)

Then I asked, “What does it mean?” Unfortunately, he was hard pressed to explain further.

So I explained again that there was NO WAY to tell how much money someone had saved based on their car or house or vacations. Maybe you can tell how much they spent, but really not even that completely because maybe they got the item at a discount or given to them.

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Important Lessons I Learned From My Parents

A few weeks ago, J and I went out to dinner with my parents. When the check came, my dad asked J to calculate the tip. Luckily we had just talked about this, so he was able to figure it out — but it made me think about all of the other money and finance lessons I’ve learned from my parents.

So far I’ve mentioned that my dad would drill me on the rule of 72 and part of any money I received had to go towards opening savings bonds, but there were many more lessons over the years.

My dad was relentless with the sayings:

  • Don’t put all your eggs in one basket
  • You don’t have to spend it all!
  • Don’t spend more than you make
  • Save some for a rainy day

When I was in middle school, he took me to our local credit union and we opened a checking account. He showed me how to write checks and use an ATM card.

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How National Bank of Mom Rewards Savings

By this time, you already know that we subscribe to a three-envelope system (complete with registers) for savings, spending and giving. At times, we also use an additional envelope for short-term savings — when J is saving for a larger purchase a few months in advance.

The first stop in our banking process (and the reason for the name of this blog) centers around the savings envelope.

Every month on the 9th, I pay interest on the total in J’s savings envelope. To make it enough that he can see a tangible result (and earn more than the few cents he would at a bank), I pay 3% monthly.

I create a bank statement, give him a printout and also email him a copy. He writes the interest amount in his savings register to balance the account.

I developed a spreadsheet to calculate the amount and format a nice-looking statement for him. You can download it here! Fill in the sections in blue on the first sheet. Each month, enter the deposits made in the appropriate section, and the interest and totals will recalculate. Print a copy or save as a PDF and email away.

What is interest?

When borrowing money, interest is the money that you pay on top of what you borrow. Borrow money, pay it back AND extra.

When saving money, interest is the money that you earn. The bank “borrows” money from you and gives you a percentage of that money (for the privilege of using it). Put money in and get that amount back PLUS more.

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Let’s Talk

If you haven’t guessed, I’m a little bit of a perfectionist.

A few weeks ago, I had what I thought was going to be tough conversation with J. Before that, I had stressed about it for weeks — what if he was upset at what I said? What if I didn’t express myself clearly or completely and he was confused? What if I looked like a bumbling idiot? What if it didn’t go perfectly?

The same set of fears manifests before each post I write. What if I can’t get across what I want to say properly? What if it’s confusing, boring, incomplete or worse? What if I sound completely ridiculous or like an amateur? What qualifies me to be able to write about these topics?

I have this idea of how things should be — how our conversations should go, what our relationship should look like, how this blog should read and on and on and on. I measure myself against an impossibly high standard, and I’m always scared of falling short.

Eventually I mustered up the courage to talk to him. I put aside my fears of not being perfect and took action. (I even managed to be calm during our discussion!)

And it couldn’t have gone better.

Because I was calm and talked about things in a friendly, yet matter-of-fact tone, he responded in kind. I set the tone.

Each time I do these things, I’m setting a precedent that our relationship is important to me. It’s one where we can talk about things — things that are difficult, things that are important, things that are on our minds, or even trivial things.

Those things also include talking about money.

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