Tuesday, February 12, 2008

Money Management by Malia Kesler, CPA

Malia Kesler is a licensed CPA (Certified Public Accountant) with experience at Ernst & Young and other CPA firms. She is currently a full time stay at home Mom. She has a Bachelors and Masters in Accounting from BYU, whose Accounting School was ranked 2nd in the nation when she was there. She says she loves anything coconut...which probably explains a lot about her.

Question: You've studied a lot about budgeting. Could you explain some of the different methods and how they work?
  • One way to budget is called a zero based budget. The idea is that you take all the money you have coming in and decide where it will go out - either spending, saving, or paying off debt. By not leaving a cushion, you make sure to meet your goals. Before I learned about this method, I used to just 'see how much money was left over' and I would just end up spending it. This way, you decide up front how much money to send to your goals and each category and then you stick to it.
  • Another way to budget is just to base everything on previous months numbers. the only problem with this method is that you may not have enough money for something that is different this month than it was last month. you'll be close, but you may get frustrated because you didn't anticipate upcoming expenses.
  • One thing I really like to do, because I don't like surprises that cost money, is to average out my variable costs and save a little each month so that when I go to spend the money, I have the amount I need. So for example, for your back to school shopping, if you were doing the zero based budget, you would budget a large amount of money (say $200) for clothes and school supplies in July and/or August. With this averaging method, you would figure out a good estimate (say $20) to save every month and when August comes around, you have the money saved up to spend. I use this for anything variable, like travel, clothing, gifts, Christmas, insurance premiums, etc.
  • The last budgeting idea I've come across is the cash or envelope method. You would use this for expenses like food and supplies and eating out that can get out of hand if you're not careful. So once a month or once a week, you put your budgeted amount in the food envelope and when it's gone, you're done spending money on food until the next week or month. On the other hand, if you have leftover money you can treat yourself, or save it.
Question: What is the one most important thing you can do to make sure you are financially secure?

I've thought a lot about this question and I have to say I think it is to get and stay out of debt. Commit now to never go into debt again except for a house you can pay off in 15 years or less. This one decision will make all the difference in the world for financial security and wealth building. Every case I have seen or heard of where people get into trouble, have severe stress, and financial problems involved debt. People usually operate in a world of best case scenarios when it comes to large financial decisions. But the problem is that they live in the real world and things can go wrong. Life happens. If you have no debt and an emergency fund, you are well insulated and prepared when life comes at you in unexpected ways. If you don't have any payments, you are very secure. You could save your emergency fund and retirement very quickly if you had no monthly payments. You could lose your job and survive just fine on food storage or a part time job at McDonald's till you found new work. And most of all, you would have peace, knowing that whatever happens, you can keep your car and your house and be just fine.

The vast majority of millionaires operate without debt, and that is exactly how they became millionaires. I think I should add that the way to do this is first to become debt free, and then to save money for things like your next car, remodeling and vacations. If you pay yourself a car payment every month and put it in the bank, you can go buy a car with cash every few years. If you do that with every expense you never have to go into debt again.

Question: What is the best book you've read on money management and why?

The best book I've read on money management is 'The Total Money Makeover' by Dave Ramsey. He teaches truths about money and provides the way and the motivation for getting financially free. He gets to the core problems or challenges that keep people from winning with money. It has changed my life and many other people's lives. Most other books provide good tips on how to save money or how to be frugal, but if you're not doing the important things (staying out of debt, saving for retirement, and funding an emergency fund), those ideas are a drop in the bucket toward peace or wealth. Some other books I've enjoyed were 'The Millionaire Next Door' by Stanley and Danko, 'America's Cheapest Family...' by Steve Economides, and 'The Five Lessons A Millionaire Taught Me' by Richard Paul Evans.

Monday, February 4, 2008

Discipline, Giving Attention, and Family Vacations from a mother of 9

Judy Campbell, my mother-in-law, raised nine children, all of whom went on missions except one daughter, all of whom grew up to get married in the temple and become hard workers in the kingdom of God. She has many wonderful tried and true ideas and much wisdom from her many years of experience.

Here are her thoughts on discipline, giving children attention, and family vacations:

Question: You have raised nine children who all turned out to be very hard workers with good self-discipline. What are your philosophies on child discipline?

I believe in the philosophy of High control, High support. You have to teach your children to obey. You do this with love, not anger. Think of yourself as a teacher, instead of someone who criticizes.

Children need to learn to control their bodies so they can control themselves in school for their teachers and in society. Ultimately if they don’t learn to obey you, they won’t be able to obey Heavenly Father’s commandments. You also have to give them lots of love and support. But giving them lots of love without discipline is not love. It won’t help them succeed in society or in the kingdom of God. The best book I ever read on the subject and that sums it all up is No: Why Kids--of All Ages--Need to Hear It and Ways Parents Can Say It by David Walsh, PhD. That is a book every mother should read.

Question: How were you able to make sure each child received the attention he/she needed?

I considered motherhood and homemaking to be a full time job. Although I always had responsible church callings that required time and effort, I didn’t have demanding interests outside the home. I didn’t join the chorale until Gillian (the youngest) was four, and our main social contacts were with extended family.

I made myself available to the children, and related to them as I was working around the house. I certainly read them stories daily, but did not directly play with them very much. Rather I talked to them and listened to them while I was doing the million things there are for a busy mother to do. The little ones followed me around the house talking, and I guess the bigger ones did, too. We told stories, had hugs, discussed problems, sorted out conflicts, exchanged views on the state of the world and everything else, all while performing the normal tasks that keep a household running.

Eating meals together was not just a priority for us, it was a rule, parents included. We set every meal on the table in a formal way, with a place setting for each person, food put in serving dishes, and a prayer that was said before anyone ate anything. I’m not saying that the meals were FORMAL, just that they had form in time and space. That way we parents could direct the conversation, give each child a chance to contribute, and work on family unity. Our children were not allowed to graze in the kitchen. Meals appeared on an a regular schedule, with a specific snack time between meals. That way we all came to the table hungry and were more likely to eat the nourishing food provided. As the children grew older and developed outside interests, this remained a family rule, and outside activities were judged partly on whether they would interfere with family meals. When Tamsin started early morning seminary, we all arose and dressed in time to eat breakfast with her before she left. Gaylon made mush while I got the littlest ones dressed, and our table setter and dishwasher cleaner-outer did their jobs to make this possible. We maintained that schedule through all the years we had kids in seminary.

I have heard mothers say, “My children are my jewels.” That is certainly how I feel about mine. And because they are and were my jewels, I wanted them to look the part. I fixed their hair, provided them with clean, well-fitting, attractive and appropriate clothing and insisted they wear it (and not any old rag they happened to be fond of). I think this care gave them self confidence and let them know how much I valued them. Children who are not well groomed and dressed may be thought of as dull and therefore ignored or not challenged by their teachers. They are not sought after by their peers, either. If they look bright, their teachers and friends are more likely to believe they ARE bright, and will treat them accordingly.

As regards giving children one on one attention, that was not so much planned per se as it was a result of the over-all plan. Both Gaylon and I were focused on the children and on their needs. We were emotionally involved with them and made ourselves available to them. They had jobs and responsibilities and were integrated into the running of the household through the contributions they made. Therefore we attended to one another in a normal way that didn’t require special set-aside time dedicated to that purpose. Our children also developed strong bonds with each other which persist to this day.

Question: I know you had a wonderful tradition of taking family vacations which taught your children and brought them closer together. How did you do it with all those kids?

We have traveled all over the country with all ages of children. Except for going back and forth from Pullman to Utah, our first really long car trip was from Pullman to Augusta Georgia when we had daughters 3 1/2, 1 3/4, and 5 mos. We did this in seven 500 mile days with a couple of days' stopover in Utah, all before the advent of disposable diapers! Since that time, I haven't been afraid of any trip with children. We have taken a long family sightseeing trip nearly every year, as well as traveling often to see relatives in Utah.

I think success traveling with children depends somewhat on your general way of dealing with your offspring. If you follow a regular routine with defined mealtimes, snack times, nap times, and bed times, adhering to that schedule as far as possible when traveling will make it easier. Also, if the children watch little TV and therefore know how to entertain themselves, this ability will carry over into their travel time.

For very young children, take favorite toys that can be enjoyed in a stationary position such as wind-up music boxes, squeaky toys, things to hang above the car seat, things to chew on, indestructible books, etc. It also helps to hide the things for a week or so before the trip so they can be "new", or to have some truly new things that have been saved for the trip.

For children a bit older, tapes with children's stories or music, stories for you to read aloud to them, picture books according to age level, travel games, coloring and activity books, little cars, etc. are helpful. I often found it beneficial to keep these things myself and bring them out as needed, rather than just handing the kids a box of "stuff".

Children of any age can be distracted with your singing songs, telling stories, or pointing out things of interest along the way. As I’ve grown older, it's been hard for me to get over the habit of noting aloud every horse, cow, sheep, train, etc. as we go along! As our family grew, the older children helped with entertaining and caring for the younger ones.

Since I don't get car sick when reading aloud, I have read many interesting books to the family as we traveled. If at all possible, we choose a book that is set in or deals with the area in which we are traveling, for instance the biography of Jacob Hamblin when we were in southern Utah, Johnny Tremaine for the Boston area, a condensed version of Lorna Doone when we were in Cornwall in England, etc. This really makes the countryside come alive for the whole family, and I have read recently that Pres. and Sr. Hinckley's family did the same thing. Since our children were used to being read to at home, they were attentive doing so while we traveled. Books on tape would also serve this purpose.

We have also worked on things we wanted to memorize, such as the song with the alphabet backwards, the Greek alphabet, state capitols, world capitols, etc. Gaylon will often give geological descriptions of how the landscape through which we are traveling was formed. We have favorite oral travel games, such as dividing into two teams and seeing which can get through the alphabet first, taking the first letters of words on signs on one side of the road. We also play 20 Questions, I Spy, etc. Traveling is also a time when we can discuss important church doctrine, moral issues, political thoughts, etc. with just one child or with the family all together.

Snacks have a place in keeping people happy while on the road, but constant eating is tiresome, satiating, and spoils meals, so I save snacks for a strategic time when they will do the most good.

We have developed an efficient way of travel to minimize the time spent on the way. We start very early, eat dry cereal for breakfast while drinking milk from lidded cups, and also prepare a lunch to eat in the car. If the time schedule allows, we may stop and picnic in a park at lunch time for a rest. Supper is a simple hot meal in the campground, probably out of a can. We carry water for drinks and paper towels for clean-up, and keep potty stops to a minimum, sometimes even carrying a porta-potty in our van for extra efficiency. Some of our little ones suffered from carsickness, so medications for that, plus stuff for cleaning up had to be included.

When we had small children, Gaylon and I traded off driving so each of us could have a rest from dealing with the kids.

In my experience, on long trips there came a time when the baby or toddler would give up and just feel like howling no matter what I did. We are living proof that travel can be borne even under that circumstance, and that no lasting harm resulted when we had to keep going in spite of that loudly stated childish opinion that we should do otherwise.

Now that most of our children are grown, we find that their memories of family trips are very important in their recollections of their growing-up years. All the planning, hassle, effort, (and expense) must have been worth it!

Friday, February 1, 2008

Steve and Annette Economides on Saving Money and Teaching Kids

I was going to try and get an interview with Steve and Annette Economides because their book "Americas Cheapest Family" has helped me so much in teaching my kids about money and how to work. Then I saw that they have already published many interviews and have links to them on their website. Click here for a link to their interview about "saving money with kids" and more. Click here for additional interviews. Click the name of the book above to find out more about their wonderful book.