I am so excited.

I am going to take my oldest daughter to the bank and help her open her first savings account!

She’s ten now, having recently celebrated her birthday, and she has some birthday-checks to cash.  One of our local banks offers a no-fee, no-minimum balance required savings account for children under 16.  This type of account will be perfect for my daughter.

Over the past few years, my wife and I have worked hard to teach our kids about saving, spending, and giving.  Last year, we introduced them to the wildly-successful Kids’ Fun Fun.

I want to incorporate trips to the bank into our regular weekly routine.  I want my daughter to be comfortable with the entire process – filling out the deposit slip, endorsing the check, talking to the teller – so that she will never feel “overwhelmed” by the banking experience.

In a few years, when she’s ready for a checking account, she’ll have some grasp of how personal money management works.  Hopefully, by the time she’s ready for college, she’ll be prepared and be able to avoid many of the financial missteps that others often make.

What about you?  How old were you when you or your parents opened your first savings account?  Have you opened one for your son or daughter?  I would love to read your comments.

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Taking My Daughter To The Bank To Open Her First Savings Account

My wife and I have been married for almost thirteen years.  For that entire time, even before we got serious about managing our money, we believed in combining our finances.  Here’s our simple system and what works for us.

Our Combined Finances -

Checking Accounts -

We have one, joint, primary checking account.  My wife and I can both write checks from this account.  We both have debit cards associated with this checking account.  Since I’m the nerd, I keep up with the checkbook balance.  We write less than ten checks per month, mainly to pay for babysitters and daycare.  I reconcile the checkbook once or twice a week, which takes less than five minutes.  We both carry a book of checks, for the sake of convenience.

We have one, joint, online checking account.  We both have debit cards associated with this checking account.  My wife rarely uses this account, which is used primarily for online transactions.

Our expenses are pretty consistent, month after month.  Because we live on a budget, it’s relatively easy to predict when and where we’ll write a check or use a debit card.  We hold on to our receipts, write down check amounts, and then I will enter all transactions in our checkbook register.  I also regularly log-in to our checking accounts, just to make sure that we haven’t forgotten to record a particular transaction.

Cash -

We use the envelope system to manage our cash.  My wife has a set of envelopes.  I have a set of envelopes.  Click here to watch a video describing, in detail, how the envelope system works.

Again, there is a real advantage to living on a budget.  I usually shop for groceries, while my wife usually shops for clothing.  So, she gets the clothing envelope, and I get the grocery envelope.  This works for us, but other couples might need two clothing envelopes or two grocery envelopes, one for each spouse.

Saving Accounts -

We have one, joint, online savings account.  We both have access to this account.

How It Works -

The key to combined finances is open communication.  When we create our monthly budget, we are honest about our expectations.  If I think I’m going to play golf, or my wife thinks she’s going to visit the manicurist, then we talk about those things.  I’ve seen couples struggle to live on a budget – even a budget to which they have both agreed – only to find out that one spouse is hiding certain expenses from another spouse.

We only need one checking account (from which we both write checks) because we are constantly talking about our finances.  And, we have the freedom to talk about our finances (and avoid arguing) because we are both committed to our budget.

I trust my wife.  She trusts me.  We have three children, and we are teaching them to trust us..  Our system for combining our finances works because I know, that all times, my wife is doing what she believes is best for me and for our children – and she knows, that at all times, I’m doing what I believe is best for her and our children.

Inventory of Financial Accounts -

Because I am the finance nerd in our family, I’ve created an inventory of financial accounts for my wife.  I regularly update the inventory, so that she will have quick access to our financial information, should something happen to me.  If you manage your household finances, be sure that your spouse knows where important documents and accounts are located.

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What Works For Me – Combining Our Finances

Way back in March of 2007, I started building a playhouse for my kids.  Two year later, the playhouse is (almost) complete.  (I actually completed most of the playhouse in just a few weeks, but I let the kids play in it for a while without installing sheet-rock.  This past March, my Dad came up, and he helped me finish out the inside.)  The playhouse still needs one more coat of paint and I have a few pieces of trim to install, but my kids are really enjoying playing in it.

Here’s a pic of the playhouse, as it stands today -

Don’t you love the bright blue!  My kids picked it out.  The color definitely makes the playhouse easy to find in our backyard.  As you can see, there’s a piece of trim up top that still needs painting, and, tomorrow, an electrician is coming to run some electricity to the playhouse, so that the kids can have some lights and run a fan.

I also have a new “playhouse”.  Actually, I have a new shed / workshop.  I purchased it last week, and I got a really good deal on it.  I’ve been looking for a shed for almost a year, but I never really found one that I liked (at a price we could afford).  Two weeks ago, I was driving by a local dealership that sells prefabricated sheds, and I noticed that there were three slightly older-looking sheds near the back of the dealership.  I pulled in and asked the guy who was running the dealership about the three sheds in the back.  Lucky for me, they were “returns” – and I was able to buy a 2007 model for several hundred dollars less than the 2009 model.

Here are a few pictures of my shed / workshop -

I spent some time today wiring the shed with an overhead light and two receptacles.  I’ve also added some pegboards, and I even re-purposed an old shelving unit that I found at the dump.  I simply cut off it’s back two legs, slid it in-between two studs, and the screwed it into place.  Now, I have a nice little place to store various things for my lawnmower.  Oh, the shed is at just the right height.  All I have to do is put down two car ramps, and I can easily back the lawnmower in or out of the shed.

When he gets here tomorrow, I’ll also have the electrician run power to the shed.  Now, I have a (much-needed) place to store our stuff, and a place to work on future projects.  I’m super-happy with my purchase.

I realize that this post has very little to do about personal finance, but after a week away with a kidney stone, I really missed you guys.  I hope that you are all doing well, that you are living on budget, and that you are moving forward with your debt reduction!

I was just about to hit publish and then I had a thought.  Tomorrow, I’ll write about the financial side of my purchase, and let you guys in on my thought-process- how I decided between buying/building a shed, whether to purchase new/used, and what other financial impact the new shed might have.  Stay Tuned!

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The New Shed And The Playhouse

Our family recently returned from a week of vacation, and I’m proud to report that the Kids’ Fun Fund that I mentioned a few months ago worked just as I had hoped.  Throughout 2009, my kids have been doing little chores around the house, chores for which they can earn a little money.  A portion of this money gets deposited into the Kids’ Fun Fund – just a plastic square container decorated with their names and labeled Kids’ Fun Fund.

The purpose for our Kids’ Fun Fund was pretty specific.  Our kids love to go to an arcade – a very specific arcade – located about fifteen minutes from where we go on vacation.  This arcade is really more than just an arcade, it’s more like a small-scale amusement park, complete with miniature golf course and go-carts.  My kids, for some reason, just really like to this particular arcade.

Last January, when we started to plan for our vacation, I asked my kids what they thought about creating a Fun Fund, so that they could save up a big pile of coins to use at the arcade.  They really took to the idea an the Kids’ Fun Fund was born.  You can click this link to read more details about the Kids’ Fun Fund.

The Kids’ Fun Fund really worked.  Our kids worked hard – and worked hard together – to earn money for the Fun Fund.  They were both so proud, when we were preparing for vacation, to pack their big jar of coins.  When we arrived at the arcade, we all stuffed our pockets with quarters, and headed inside.  The kids had a blast and it was great to see them enjoy the reward for their labors.

It’s cool to note that the kids could have spent every penny in their Fun Fund, but they chose not to do so.  In fact, they used just a small portion of the money that they had saved.  Now, they are in the process of deciding exactly what to do with the rest of the Fun Fund.  I’ll guide them as they make the decision, but I’ll leave the final choice up to them.  Whatever they do, I’m super-proud of my kids.  They set a goal, worked hard to achieve it, and then had a blast at the arcade.  Success!

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The Success Of The Kids’ Fun Fund

I’m on vacation with my wife and our kids.  The weather is glorious – 85 degrees, sunny, slight breeze.  The beach is beautiful and the kids are really enjoying the pool.

When I’m on vacation, I’m ON vacation.  I try not to check my email or worry about work.  Instead, I focus on hanging out with the kids and enjoying the week off.  The past few months – years really – I have been very, very busy.  (You have probably noticed a drop off in the number of articles here on the blog.)  The truth is, I need this vacation.  The rest of this summer is jam-packed with work, much of it stress-inducing, so this week is a time to relax, unwind, and recharge for the months to come.

This is the only week of the year where I ignore the frugal part of my brain.  Throughout the year, we budget for our vacation, but when we are on vacation, we just enjoy ourselves.  I don’t pinch pennies and I don’t worry (too much) about the high cost of vacation fun.  Instead, I try to just go with the flow.  Put another way – I’m frugal 51 weeks a year so that I can be free not to be frugal 1 week a year.

I hope you all are having a great week.  I’ll check in soon, and let you guys know how the vacation is going.

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Frugal 51 Weeks A Year

I have some awesome news that I want to share with you  guys.

My parents are debt free!

I just got off the phone with my Dad, and he was so excited.  For more than two years, my Dad has been focused on paying off his mortgage.  Month after month, he made his regular payments, and then used every, extra available dollar to reduce his principal.  Today, he was able to walk into his credit union, hand them a check, and pay off his mortgage!

I cannot explain to you how happy I am for my Mom and my Dad.  I asked Dad for permission to write a bit about their story, and he was happy to share with you guys.  Basically, after reading some of the articles here at No Credit Needed, Dad decided to get out of debt and pay off his mortgage.  After just a few months, he was able to rid himself of his consumer debt, and then he began to focus on ridding himself of a mortgage payment.  Through hard work, sacrifice, and determination, he paid off a 15 year note in less than 7 years, with the majority of the payments coming in the past 2 years!  How cool is that?!?

I love it when I hear about people who are debt free, even people that I don’t know.  Can you imagine how cool it is for me to hear that my parents are debt free?  I’m very close to my Mom and my Dad and I can’t wait to see what their debt free future holds for them.

For those thinking about debt reduction, consider reading – Debt Reduction 101 – and begin your journey towards being debt free.

Mom and Dad – you rock!

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Great News – My Parents Are Debt Free!

I’ve snuck away for a few minutes.  My wife and I are going through our house, room by room, and doing a major spring cleaning.  We are looking for three things – items to sell on eBay, items to put into storage, and items to throw away.  As of this morning, we have thirty items to sell on eBay, several items for storage, and two bags of junk.  It feels good to get rid of the stuff we simply do not need!  (Isn’t it amazing just how quickly we accumulate stuff?!?)

Alright, I’ve got to get back to work.  We have the momentum, and I don’t want to interrupt our progress.  I’ll let you know how things are going – and if we make mad cash from selling our unused stuff.

*Update – Oh, yeah, we also found some stuff that we will donate to a local “clothes closet”.

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The Great eBay Purge Begins!

I thought you guys might get a kick out of hearing from my wife – Mrs. NCN.

NCN – So, what’s it like being married to a geek like me who likes to write about personal finance.

Mrs. NCN – It certainly makes life interesting!  It is pretty cool that you handle all of the boring day-to-day stuff and I don’t have to deal with it.

NCN – Do you feel like you are left out of the decision making?

Mrs. NCN – No.  If it’s a major decision or whatever, we talk about it, but you enjoy all the facts and figures.

NCN – How did you used to feel, back when we were in debt?

Mrs. NCN – Weighed down.  Nervous.

NCN – And now?  How does it feel to be debt free?

Mrs. NCN – Amazing.  It’s just a great feeling to know that we are debt free.

NCN – What do you think is the most important thing that a couple can do if they want to be debt free?

Mrs. NCN – Talk about it and then get in the right mindset.  Make out a budget – and then go for it!

NCN – Where do you think we could stand to improve?

Mrs. NCN – We still spend too much money on junk!  Our lives are so hectic, we still eat out more than I’d like.

NCN – Do you miss your credit cards?

Mrs. NCN – No.  I honestly never even think about them.  We have our budget, I use cash or debit.

NCN – How often do you read the site and what do you think about it?

Mrs. NCN – Every other day or so.  I enjoy seeing what you write, and I think it’s awesome when people comment and say that you have helped them.

NCN – If you had advice for couples who are tying to communicate about money, what would it be?

Mrs. NCN – Be honest with each other.  Listen to each other.  Compromise.

NCN – Would you feel comfortable taking over the day-to-day management of our finances, at this point?  Paying bills, transferring money between accounts, etc.?

Mrs. NCN – That’s a hard question.  I feel comfortable, due to the fact that our financial house is in order, but I really dislike handling those tasks.  So, yes, if push came to shove, I could do it and I know how to do, but I prefer that you do it.  We make a great team!

NCN – What is the most important financial lesson that you hope to teach our kids?

Mrs. NCN – Never spend more than you make – and value people over things.

At this point in the interview, I opened the floor for questions from Twitter -

FrugalForLife – Do you feel NCN spends more time on the computer than with you?

Mrs. NCN  – He spends a LOT of time on the computer, but he loves writing.  I’m proud of his work, and he still manages to have plenty of time for his family.  Plus, he’s a bit of a geek, so if he didn’t have his computers, he’d have some other geeky hobby.

Now, I’ll go back to asking questions –

NCN – Do you ever miss our old borrow money – we can make the payments – lifestyle?

Mrs. NCN – Not really.  I guess I miss buying brand new cars and just buying whatever I might want, without thinking about the consequences.  Honestly though, having those more expensive things and going on those shopping sprees simply cannot compare to the freedom we now have.

A couple of more questions via Twitter pals -

BigHonkin – Has you ever gotten frustrated with NCN over finances?

Mrs. NCN – He does tend to worry more than I do, but that’s because he cares so much.  Honestly, he’s the most laid back guy in the world, except when it comes to managing our finances or working with our kids.  Then, he’s super intense.  So, yes, it is difficult when we are out shopping, and he’s calculating, to the penny, how much each item will cost, but that’s just NCN being NCN.

FiveCentNickel – How do you feel about NCN’s No Credit Needed stance?  Agree or disagree?

Mrs. NCN – I completely agree.  It has fundamentally changed the way we manage our finances.  Now, instead of worrying about credit card payments, we save up for future purchases.  It just makes things easier.

BudgetsAreSexy – Do you get irritated hearing the words “blog” and “finances” 100 times a day?

Mrs. NCN – Haha.  Well, I didn’t even know what a “blog” was when you started, and I’m amazed that so many people are doing this now.  Let’s just say, I’ve learned to nod my head a lot when you go on and on about stats and stuff.

I hope you guys enjoyed this interview.  My wife is the greatest, as proven by the fact that she puts up with me!  It was super fun to talk to her, and get a little insight into what she thinks about the site and about our finances.  So many couples struggle – trying to figure out how to talk to each other about money.  We have learned, over time, to simply be honest, and real with each other.  We’ve also learned how to compromise, and we’ve learned how to focus on our own strengths.

Mrs. NCN – You rock!  And, I love you.

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Talking With My Spouse About Money – An Interview With Mrs. NCN

Each summer, my wife an I take our kids to the beach for vacation.  One of our kids’ favorite places to go, while on vacation, is the “fun park” where they can ride go-carts and play video games.  I think they enjoy the “fun park” more than they do the pool!

A few months ago, in an effort to teach our kids a bit about money and responsibility, I created The Kids’ Fun Fund.  Throughout the year, the kids are earning extra money, and they are planning to spend that money when we go on vacation.  Here’s how The Kids’ Fund Fund works -

Instead of giving our kids an allowance, we reward our kids for doing chores around the house.  Our daughter is 9, so she can help with folding clothes, taking care of the baby, cleaning her room, and straightening up the den.  Our son, now 5, can make his bed, put away folded clothes, straighten up the bathroom, and pick up his toys.

Taking into consideration their differing ages, I created a list of 10 age appropriate chores for each of our kids.  I then posted the list of those chores, along with how much Mommy and Daddy will pay upon completion of  each of those chores, on a bulletin board near our refrigerator.  (By the way, the bulletin board is a life-saver.  It keeps papers off of the front of the refrigerator, and with a few pushpins, makes organization a snap.)

Each morning our kids go through their list of chores, and as they do them, they receive their “salaries” – usually a dime or a quarter per chore, depending on the chore’s complexity.  My wife and I also have the flexibility to add bonus chores, something we do pretty often, especially if the house needs a quick clean up.

One cool thing about The Kids’ Fun Fund – all of the money goes into a single jar.  It’s actually a square plastic container with a label that says “The Kids’ Fun Fun”.  I made it from a jar of fancy peanuts.  The kids have been earning money for several months, and neither one of them have commented on the “fairness” of putting all of the money into a single jar.  In fact, from time to time, they’ll take all of the money out of the jar, count it, and determine what their “half” of the money is.

We have tried other systems for teaching them about money, but this one really seems to work.  Clearly, our oldest is doing more work and could make much more money, but she seems very content to share whatever we give her with our son.  And he loves nothing more than to dump the money onto the floor and organize the coins by type.

I’m not sure if this system will always work, but for right now, it’s a good way to teach them about work, how to share, the power of working together, and the joy of achieving a common goal.  It’s going to be very interesting this summer at the beach.  I really can’t wait to see if they spend all of their money at the “fun park”, or if they choose to save a bit for other adventures.  Whatever they do, I’m sure there will be plenty of teachable moments along the way.

A couple of final thoughts – Our kids give a portion of what they earn to our local church.  We believe it is important to teach them to be givers.  Also, they save a portion, because we also believe it is important to save.  Also, there are some chores that our kids are expected to do, for which they will not receive any financial reward.  And, there are times when we just give them money, for no other reason than that we want to.  We want them to learn that family members do for family members, not for gain, but out of love.  Finally, I have found that the amount we give the kids is almost irrelevant to them.  For now, they just really dig watching those shiny coins pile up.

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The Kids’ Fun Fund – Our Alternative To Allowance

I have decided to do the majority of my Christmas shopping online this year.  In fact, even though I like bargains, I am going to forgoe going to any stores on Black Friday.  I might, however, take a peak or two at Amazon’s Black Friday page and see what I can find for my family and friends.

I would like to have all of my shopping wrapped up (pun intended) by the first week of December.  Across the board, I think that I will spend a little less this Christmas than in the past.  One positive thing to come from the recent economic situation, people are finally learning to tell the difference between needs and wants.  Most of the things we buy as Christmas gifts are wants, not needs.

I will confess, Christmas is the one time of year when I like to splurge.  I really enjoy buying gifts for my kids and my wife.  This year, I am going to be a little more frugal, but I’ll still buy them some fun things.

For the most part, I will take my own advice, and stay away from the mall.  I might go once, just to pick out a few things for my wife, but I think it best to stay out of any atmosphere which promotes reckless spending.  Even after years of living on a budget, I am still susceptible, like most people, to the occasional impulse purchase.  Staying away from the mall, and shopping online, allows me to research products, take my time, and really think before I buy.

Also, when I shop online, I can shop through Upromise and earn cash back for my kids’ college savings.  When saving, every penny counts, and since I don’t use credit cards, I look for bonus rewards from wherever I can get them.  With Upromise, I just registered my debit card, I shop with it online, and I get cash back.

By the way, for those worried about shopping with a debit card online for security reasons, here’s my setup.  I use the debit card associated with my ING Direct Electric Orange checking account, instead of a credit card.  The amount in the account is limited, and I regularly check my balance.  I’ve been using my debit card online for several years and I have never had a problem, but you might want to contact you financial institution and ask them about how they handle identity theft and debt card fraud.

I love Christmas, but back when I was getting out of debt, I didn’t have a lot of spare cash for buying Christmas presents.  I have written down a few ideas for a debt-free Christmas.  I hope that these ideas will help you save a bit of money and get out of debt.

I don’t know if I will have time to write much over the next few days, so I wanted to take this opportunity to wish each of you a very happy Thanksgiving.  Each day, I am amazed by the number of folks who take the time to read my site, leave comments, and connect with me.  The last three plus years have been amazing, and I just can’t wait to see what’s around the corner.  You guys rock!

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Skipping The Long Lines And Shopping Online