Managing Money 101

They say leading by example is one of the most important ways to teach your child about money management. So I’ve already put my kids behind the curve, I guess.

Managing money is not my strong suit, probably because a) I don’t like math, b) I’m a teacher, and it’s hard to manage what you don’t really have, and c) I have this blind spot where all my wants really do seem like needs.

My kids are now on the brink of adulthood, and my son is currently living with my brother and his family in Canada while completing his senior year. He just moved there in September and is looking for a part-time job to save for university and buy comic books, so we decided to spend part of the Christmas break learning more about budgeting.

Let me tell you something about my son. First of all, he is smart. He does very well in his studies and remembers EVERYTHING he learns. When we play table games, he remembers the rules for games we haven’t played since last Christmas. I sort of feel sorry for him because that means he has to re-explain the rules to the rest of the family because his dad and I do not retain anything in our long-term memories, and his sister doesn’t care enough about table games to remember.

He is in pre-calculus in his senior year, and while he doesn’t really enjoy it, he is actually passing the course. There has to be a recessive gene for math somewhere in there.

But when it comes to money, he is just starting out. He is into computers, so he has ‘needs’ for hardware that don’t necessarily match up to his influx of cash. He also feels strongly about daily coffee at Tim Horton’s and was surprised to learn that a $2.50 coffee per school day added up to $12.50 a week (yes, he is passing pre-cal).

Here are some interesting things we have learned.

  1. He is also not quite clear on wants vs needs (that’s a dominant gene trait, I guess). The book we read said that “needs are things you can’t live without,” which hasn’t cleared up the confusion very much. I can’t argue that coffee is not a need. I just can’t.
  2. You should try to have an emergency fund of at least three months’ worth of expenses, according to what we read. That was a concerning number, I’d say.
  3. I think I needed the crash course just as much as he did. Once I got over the panic created by the emergency fund advice, I realized I could easily implement some of these budgeting tips.

One of the budgeting methods we liked was the envelope method. If you label envelopes with your monthly expenses and separate your paycheck into each envelope, you’ll ensure that you are living within your means.

Once you have your expenses divided up, you can save one portion that’s left and spend the other on leisure items; comic books for the boy and ice cream for his mother.

Another one was the 50-30-20 method. You allocate 50% of your income to needs, 30% to wants, and 20% to savings. We tried this one out so we could practice separating wants and needs. We got nowhere because sometimes my child forgets his lunch at home and then ‘needs’ to buy falafel near his school. Also, Tim Horton’s never budged from the needs column. It threw off the numbers.

Well, it’s a start for him and me anyway. Next, we’ll find out how to distinguish a real emergency so we know when to dip into our fund.


  • Leza Warkentin

    I have been living and teaching in Puerto Vallarta, Mexico, since the turn of the century. I am a Canadian with a musician-Mexican husband and two Mexican-Canadian patas saladas who are growing up way too fast.

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