When a $50,000 Salary Can Feel Like Minimum Wage.

How can $50,000 seem like minimum wage? According to the Social Security Administration’s National Average Wage Index, the national average income for the USA in 2011 was $41,673.83. That means that to half the country, $50,000 a year would be a $8,326 raise, and yet this woman says $50,000 feels like minimum wage !

Well, if you read her story it makes a lot of sense.

Basically, she went from working at home to a full time office job and once she totaled the change in her spending she realized she was making about $7.50 per hour.

Here are some of the things she attributes to lowering her effective income:

• Commuting costs – increased wear and tear on her car, the cost of gas, etc…
• Childcare expenses
• Eating out more – less time to prepare meals at home means eating out or buying take out more frequently, which is more expensive.
• Increase in clothing and personal care expenses (i.e. hair and nail care, proper office attire, etc..)
• Coping with stress by spending more on vacations, or entertainment.. buying more wants than needs.

Her change in lifestyle brought about a change in spending with no increase in saving. It happens to a lot of people and it’s not always easy or even possible to fix. She could do some things differently. She probably doesn’t need to spend $40 a week on clothes, and she could plan ahead to prepare more meals at home, but that takes work too.

This is the kind of situation my wife and I work very hard to avoid. We avoid debt whenever possible to keep as much of our income as possible. I work hard to secure a steady income, and she works hard (sometimes harder) to make that income go as far as possible.

She’s the coupon clipper and meal planner. She’s turned comparison shopping into a competitive sport. She scours thrift shops and consignment stores for children’s clothes, and puts a healthy low cost meal on the table every day of every week all year long.

It’s not easy, but it’s cheaper than if she went back to work full time. And we believe it’s better for the family. Living on a single income is not easy, but it is possible and I believe better in most cases for families. The key is twofold: 1) limit expenses as much as possible, and 2) increase income.

It’s really no different than what most people should be trying to do regardless of their employment situation, but as the Yahoo! article makes clear, it’s so much easier to lose control of your spending when both people work out of the house. Those little money leaks turn into an effective loss of income over time.

Related Posts:

• Living on a Single Income: 7 Years and Counting.
• Bottled Water Out, Tap Water In.
• Living on a Single Income – You can do it! Here’s how.
• What To Do With Found Money, or a Windfall.
• 7 Tips for Cutting Spending and Putting Cash Back in your Pocket. (video)

Can a Website Teach Kids About Money (VIDEO).

One thing that seems to be universally agreed upon is that if more people learned how to manage their money at a younger age, the country would be in a far better place as a whole, financially speaking.

How young is “young”, and is there such a thing as “too young” to learn about money?

I personally believe that there is no such thing as “too young”, which is why I wrote about games to teach children about money a while back. That post focuses on the toddler and elementary school age kids, but I don’t think you’re ever too old to learn about money either.

So that post was about role-playing style games to play with your children, but here’s a video about websites that can help your older children to learn money basics like budgeting and delayed gratification.

The video (above) profiles 10-year old Evan Lipset who’s used a site called ThreeJars (Allowance Made Easy) for 10 months. He claims to have saved $500 in allowance over that time. Not bad for a kid who only wanted enough for an iPad.

ThreeJars creates the incentive for the child to prioritize and set financial goals, and allows the parent to approve or deny various goals or money moves. It makes tracking easy, and visually appealing. The downside is that it cost $30 a year.

Two other, similar sites offer free levels of membership. They are FamilyMint (Helping kids appreciate money) and Zefty (Online Allowance and Money Management for Kids & Parents.

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• Games to Teach Children About Money.
• Tax Time: Kiplinger’s “Do It Yourself Pay Raise” (Video).
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• 7 Tips for Cutting Spending and Putting Cash Back in your Pocket. (video)
• Are Rising Rent Prices in 2012 Good for the Housing Market? (Video)

What Would You do With $17,000?

Pop Quiz: You walk up to the ATM to get some fast cash for a burrito, and almost step on a bag of cash – $17k in cash. What do you do?

I’d like to say that I’d find a way to return the money, like Robert Adams did, but I honestly don’t know if I would. $1 million is definitely a game changer, but it’s also easy to decide what to do with (as evidenced by this post). But my wife and I were just discussing the other day about how something as simple as an extra $1,000 a month would change our life significantly. 17 grand would go a long way to easy many of my money worries…

• I could pay off my car loan and still have $10,000 left over…
• I could put that extra $10k in savings for my next car and never need another car loan again…
• I could finish the unfinished room on the 2nd floor of my house, increasing the number of bedrooms…
• I could fully fund my IRA for the year, and have enough left over for the next two years and pocket the interest…
• I could pay off my student loans, and still have enough left over to almost pay off the family car…
• I could take my wife and kids to Disney land…
• I could make a nice donation to my favorite charity…
• I could buy a new home entertainment system….
• I could hire a maid and make my wife’s life a lot easier…

Well, I could go on… but this little dream is moot because I probably would hand the money over. The way I see it, I’d have to sleep sometime and when I did, my conscience would gnaw away at me.

For the record, if I suddenly came into $17,000 I didn’t have previously, I’d probably pay off the family car and bank the rest for my next car since it’s getting a little shaky these days.. then I’d hire a maid.

But what about you?

Would you return the money?

Forgetting about the source of the money for a minute, would an extra $17,000 change your life in any way?

Related Posts:

• Harper Family Extreme Makeover: Where Reality TV meets Reality.
• What To Do With Found Money, or a Windfall.
• When a $50,000 Salary Can Feel Like Minimum Wage.
• Older Americans Are 47 Times Richer Than Young – So What Or Injustice?
• Participatory Economics and Why The Occupy Movement Was Destined To Fail From The Start.

Games to Teach Children About Money.

It’s never too early to start learning about money. In fact, the earlier parents begin to teach children about money and money management, the better off everyone would be. Children who learn proper money management skills early in life are less likely to end up as boomerang kids, living in their parent’s basement at 27 years old.

Here are some ideas for games to teach young children about money and basic money skills. best of all, they’re free, interactive and imaginative – no computers, television or board games here!

Let’s get started…

Money Games for Toddlers

Children are naturally inquisitive. Just because they are too young to learn simple math and grasp the beauty of compounding interest doesn’t mean they can’t start to learn about money. Begin with the basics.

Grab a penny, a nickel, a dime and a quarter. Teach your toddler the names of each coin. Engage him in tactile interaction with the coins – get a small piece of Tupperware, or a box and practice taking the coins out and putting them back in. Toddlers LOVE this kind of repetitive activity.

The mind of a toddler is like a sponge. You don’t need to force feed them the names and quiz them, flashcard style. Simply holding up a penny and saying, “Penny” before placing it in the container is often time enough to create that bond between the name of the item and the item itself.

Start small with 1 or 2 coins and work your way up. Ask your toddler to grab the penny or nickel. Make a big deal when he gets it right. It may not seem like much, but it’ll be a fun game for him and the positive reinforcement will encourage him to new heights.

Image by Timeout Kids.

Games for Preschoolers

Once your child has progressed beyond the name and coin recognition stage, and has moved into coloring, drawing and general crayon work, start adding more detail to the coin game. Start teaching the value of the coins, replacing the names with the monetary equivalent. For example, instead of saying “where’s the nickel?” you can say, “Where’s the 5 cent piece” or “Can you find 5 cents?”

While few preschoolers can handle the math required for making change for a dollar, you can start them on the path with simple counting games. Using pennies, you can introduce your child to the concept that 5 pennies equal 1 nickel, and so forth. It’s little more than counting pennies, but it’s a beginning and it’s important.

If your child is a math star, then by all means introduce counting by fives and tens (i.e. nickels and dimes). The point is to start small and work up. You’re not grooming your progeny for MENSA here, but rather laying the ground work for interest in learning and a solid financial background later in life.

Draw a circle for each coin, label it with its cent value and have your child color the circles in with whatever colors they want. Make sure each circle is roughly the right size in relation to the other circles (i.e. the dime should be smaller than the nickel..).

Ask your child to match the coin to the correct circle, using verbal cues. For example: ask, “where does the penny go?”, without pointing.

This will force the child to recognize the penny out of the possible coins laid out before him, and also challenge him to match the coin with the picture he colored.

Games for 5-8 year olds

Play shopkeeper. My middle child is 5 and she loves to play store owner. She takes her stuffed animal collection and spreads it all over the room, and pretends it’s her pet shop.

The rest of the family then takes turns “buying” a pet. It’s great imaginative play, and it provides the opportunity for learning about exchanging money for goods, and making change. It increases money awareness and math skills and best of all – it’s interactive. There is no television or computer to lean on mentally! It’s pure imagination and role play, which then lends itself to discussing and learning about all sorts of things in life – trust me!

This kind of game can be adapted for various levels and interests. Maybe your child isn’t into pets. Maybe it’s superhero action figures, grocery store play food or race cars. Maybe it’s a service, and not a product based store. You can play restaurant – kids love play food and pretend cooking.

You can also adjust the complexity of math and money management skills to the age level. For example, simple whole numbers for the 5 year age set :

Owner: “That pet is $4. ”

Shopper: “Ok, great. Here’s a $5 bill.”

Owner: “Thank you. Here’s a dollar for your change.”

Or for the later ages:

Wait person: “Thank you for dining at Half-Pint Cafe. Here’s your check.” (child provides hand-written lunch check for $12.95)

Diner: “Lunch was wonderful. Thank you.” (parent provides $15 )

Wait person: “Here’s $2.05 change. Please come again.”

Diner: “Oh I will, you can be sure of it!” (parent places $2 on the table for a tip).

So what just happened here? The child learned to make proper change, and practiced his writing skills and manners.

Perhaps the child even learned what a “tip” was. There’s a world of possibilities out there. Mix it up and experiment. What happens when the diner doesn’t give enough money as payment? What happens when you’re the wait person, your child is the diner and you give incorrect change back. See if your child notices, and role play consequences. This is a great opportunity to teach lessons about what’s right and what’s wrong regarding money and how we use it.

Some final thoughts

The earlier you start, the easier it will be to engage your child.

Include the whole family – you might be surprised at what siblings (older and younger) will come up with!

Older siblings can sometimes have an easier time of joining in if they are engaged in the teaching aspect. Get them involved in helping to teach the younger ones and they may learn a thing or two also – or come up with a new variation that may teach something you didn’t think needed to be taught.

Content in this post was inspired by Money Doesn’t Grow On Trees: A Parent’s Guide to Raising Financially Responsible Children

Related Posts:

• Can a Website Teach Kids About Money (VIDEO).
• Minimalism vs. Simplicity – Are You Missing the Point?
• Alternatives To Pet Insurance (Tips For Doing Without Pet Insurance).
• Is Pet Insurance Worth The Cost?
• When a $50,000 Salary Can Feel Like Minimum Wage.