Browse Tag: register

great-allowance-debate

The Great Allowance Debate

Allowances. To give or not to give. It’s a hot topic.

To put it simply, I think there are three main camps:

  • Don’t give it at all. I already feed, clothe and shelter you.
  • Give it unconditionally. Here is some money and it is yours.
  • Give it conditionally, based on desired actions. Here is money for completing X chores, getting Y grades, etc.

And we…

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Tracking Our Spending on an Awesome Weekend Road Trip

Awhile back I came upon a question on Reddit — “What did your family teach you about money and finance?” I love these types of topics (almost as much as I love topics like, “Besides your main job, what additional income streams do you have?”). There is always a wealth of information, and it’s a great opportunity to pick up a new idea to try.

One Redditor mentioned that his family did driving vacations almost exclusively. By the time he and his brother were 10 or so, they were responsible for keeping track of the “trip binder” where they logged expenses into categories and maintained receipts. Their mom wanted them to appreciate how much things cost and think critically about if they felt things were worth the price.

What a great idea! I bookmarked it for the next time we took a trip, which was this past weekend. We went to Brooklyn for a family birthday party and to the Statue of Liberty the next day.

Trip Log

I put together a basic log and organized our preliminary expenses — the Airbnb that we prepaid for as well as the tickets for the Statue of Liberty. I knew we would be traveling on toll roads, so I even tried to research which tolls we’d incur (based on what roads we planned to travel).

All grand plans!

And it didn’t work at all.

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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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National Bank of Mom Short Term Savings Plan

Short-Term Savings Plan

When we first started learning to manage money, we had three envelopes — one for savings, one for spending and one for giving. The savings envelope was for long-term savings — I give J a monthly statement and interest (more on this later). What I didn’t account for, however, was short-term savings — things that he wanted to buy but didn’t immediately have enough money. He’d have to save up.

It was October at the time, and with Christmas coming, we thought it would be perfect to save for Christmas presents.

  • We got a new envelope
  • We made a list of everyone he wanted to buy for, approximately how much he wanted to spend on each person and added to get a total needed
  • We then decided on when he’d like to save the money by (two weeks before Christmas) so that we had time to shop and wrap the presents
  • From there we could calculate how much he had to save per period to meet his goal

In addition to the register, I made a small worksheet that we filled out with the above info.

National Bank of Mom Savings Plan

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National Bank of Mom Savings Envelope with Register

Our Savings Envelope & Register

Up until about six months ago, when my son J would receive money, we’d put it in an old lemonade jar on his dresser. It would sit there until it filled up, at which point we’d head to the bank to deposit it into his savings account.

All was well, but I had this feeling that I could be using this money to teach him some important lessons.

I did some research and came across the Moonjar. The Moonjar is a jar with three compartments — one for saving, one for spending and one for sharing (or giving). I also found the Money Savvy Pig — a piggy bank with four compartments for saving, spending, donating and investing. And for all the crafters out there, there are a TON (and I mean a TON) of DIY posts on blogs and Pinterest about creating your own jars.

These were good ideas, but the idea of lugging around a jar full of money was absurd. Wouldn’t an envelope or wallet be better? You know, like normal people carry? Plus, even more importantly in my mind, I wanted him to know exactly how much was in each “account” at any given point and learn to balance the accounts. (I am one of two people on the planet who actually balances their checkbook. Actually, I found another! Joan on Man vs. Debt!)

With a plan in place, we embarked on our hunt for envelopes and a register.

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