My wife and I are about to have our first child. What steps do we need to take care of to make sure our baby girl has a good life if something were to happen to her parents?

The second is from Mindy:

Now that my kids are fully grown, I’m looking at redoing my will. I am struggling with what to leave to my children. I am a single widow with no plans to remarry and I don’t have any charities that are near and dear to me. Should I just give them everything equally? What if they have different income levels?

And the last one is from Meg:

I plan to have my estate split equally to fund the college educations of all of my grandchildren and just skip my kids. They all have good jobs and all of them have at least one child.

These three people are in very different stages in life, but they’re all struggling with the same question: if something happens to me, what should happen with my finances in terms of taking care of my family?

First of all, if you are a parent, I think you have a responsibility to have an estate plan in place that will take your children to adulthood. You should have a guardian in place for them as well as either enough assets after debt or enough life insurance to take care of that child’s needs into adulthood. So, for Doug, I would look at a term life insurance policy for both you and your wife, as well as a will that clearly indicates who should be the guardian of your baby girl.

On the other hand, when your children reach adulthood, all bets are off.

There is no single formula that tells you how you should handle your estate with regards to your adult childen. It depends on your own beliefs, your relationship with your children, and, frankly, their relationship with each other. You certainly do not have to leave a dime to any of your children, nor do you have to leave equal amounts to all of them.

What do I plan to do? Well, for right now, we have young children, so we have sizeable life insurance policies and a wonderful couple in place as their guardians in the event of a crisis. That’s taken care of.

When they reach adulthood, my inclination is to tell them that they’re getting nothing at all during most of their financial planning so that they plan for their own financial lives independent of us. If we do choose to leave anything to them, they won’t know it until after we pass away. We want our children to be as independent as possible, and knowledge of an eventual windfall promotes dependence.

Part of our private decision in that regard will probably come down to how they’re living their lives. It’s important to remember that just handing cash to someone in an unstable situation won’t suddenly make that situation stable. An unexpected inheritance only solves problems if that person is already normally solving life problems successfully on their own.

More likely, we’ll give a significant portion of our estate to charities that are solving global problems like hunger, clean water, and basic education.

Again, that’s just our take on the situation. There is no right or wrong answer to this question. You simply have to trust your heart when it comes to your estate and your adult children.

I don’t believe you are required to leave your estate to your children or to anyone else. It’s your estate to do with what you please.

The post Should Your Estate Help Your Children? appeared first on The Simple Dollar.

What would you do if you won the lottery?

Since I don’t play the lottery, I’ll answer this question under the assumption that instead I’m just receiving a very big inheritance from my unknown Uncle Rockefeller and Aunt Vanderbilt.

The first step I’d take is to make absolutely sure all taxes on that income were paid. I would immediately hire a tax attorney to make sure that every single I was dotted and T was crossed so that I could be very, very confident that the money remaining was mine, free and clear.

Once I had cleared all of the taxes out of the way, I would give a one-time gift to several of my family members. I would not give them enough so that they could simply stop working, but I would give them enough to pay off all of their debts and have a significant amount in the bank. I would make sure all taxes on those gifts were fully paid, and I’d encourage them to invest in something that would pay them a steady income. I would be extremely clear that this was a one-time gift, however. There would be no lending of money at any point in the future and I’d make that fact clear as well. That’s how I’d handle family issues with the money.

I would also give some one-time gifts to a few charities that are near to my heart. For example, the community food pantry in my local town is a wonderful charity run by some wonderful people, but they constantly struggle with things like keeping their doors open. I would love to give them enough so that they were endowed to cover their basic expenses in perpetuity.

With the remaining money, I would invest every single dime of it. I would not keep even a dime of the balance for anything fun.

“That sounds boring!” Well, really, it’s not.

Let’s say that I had $20 million left over after taxes and gifts to family and charity, hypothetically. Let’s say I invested all of it in about twenty five different blue chip stocks that paid a 3% annual dividend on average. That simple move would earn me $600,000 a year for the rest of my life in income. I would never have to worry about anything financially ever again. I can’t conceive of my lifestyle expanding to the point where I would even use a majority of that income.

I would diversify more than that, of course, but my focus would be on making sure that I was earning a very healthy investment income that didn’t touch the principal.

What would I do with my life with a large, stable income like that? I’d travel with my family. I would expose my children to the wide world in an incredible way. I’d spend significant periods in several different countries with them. I’d also make sure that my children could go to any institution of higher learning that they wished.

For myself? Honestly, the security of that money would mean more than anything else. Sarah and I would probably buy a piece of land in the country and build a home on it. We’d probably involve ourselves in volunteer work, mostly apolitical but not always. I would love to go back to graduate school in the areas that I studied in college, but be able to do it for the sheer joy of learning and researching and not have a cutthroat push for a job that often exists in the postsecondary science.

I don’t really have expensive dreams. I’d just enjoy the security and lack of stress that such a gift would provide.

Upon my death, I’d leave a small portion of the balance to my children and other descendants, not enough to allow them to live vicariously, but enough so that they could secure a strong financial future for themselves if they work at it. Most of it, however, would go to form a nonprofit foundation with strict directives on how the money should be used.

This is my gameplan if I were to suddenly receive a large gift. It’s not glamorous, but it fulfills everything I want from life.

The post My Plan for Handling a Big Windfall appeared first on The Simple Dollar.

With an aging population and a generation of young adults struggling to achieve financial independence, the burdens and responsibilities of middle-aged Americans are increasing. Nearly half (47%) of adults in their 40s and 50s have a parent age 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older). And about one-in-seven middle-aged adults (15%) is providing financial support to both an aging parent and a child.

Who are these people?

Adults who are part of the sandwich generation—that is, those who have a living parent age 65 or older and are either raising a child under age 18 or supporting a grown child—are pulled in many directions.2 Not only do many provide care and financial support to their parents and their children, but nearly four-in-ten (38%) say both their grown children and their parents rely on them for emotional support.

Who is the sandwich generation? Its members are mostly middle-aged: 71% of this group is ages 40 to 59. An additional 19% are younger than 40 and 10% are age 60 or older. Men and women are equally likely to be members of the sandwich generation. Hispanics are more likely than whites or blacks to be in this situation. Three-in-ten Hispanic adults (31%) have a parent age 65 or older and a dependent child. This compares with 24% of whites and 21% of blacks.

Another interesting factor:

More affluent adults, those with annual household incomes of $100,000 or more, are more likely than less affluent adults to be in the sandwich generation. Among those with incomes of $100,000 or more, 43% have a living parent age 65 or older and a dependent child. This compares with 25% of those making between $30,000 and $100,000 a year and only 17% of those making less than $30,000.

This study really hits home for Sarah and I, as it’s a scenario that we see ourselves potentially facing in the coming years. We’re going to have at least one dependent child for, at a minimum, sixteen more years. In that many years, all of their grandparents will be well into their seventies, and one of them will be in his eighties.

The likelihood is pretty strong that, at some point in the next twenty years, we will have some degree of financial responsibility for some number of our parents as well as some number of children. That’s a scary prospect to face, and it’s a prospect that many people between the ages of 30 and 60 are either facing right now or are going to be facing in the relatively near future.

Given that we know there is at least a one in seven chance of being a part of this “sandwich generation” in the relatively near future, what can we do to prepare for it?

The first step, one that we can take right now, is to have some real conversations with our parents. Do they have enough to retire on? Are they going to be financially secure, no matter what? Or is there a reality in which we’re going to have to help out?

This can be a very difficult conversation to have, but it needs to happen for all of your financial sakes. If there is any chance at all that you will need to provide financial support to a parent in the future, you need to know it as early as possible. If a parent gives false or misleading information to their child and then later needs assistance that contradicts that information, they shouldn’t be shocked to find that their child can’t help them.

Both the parents and the children need to know and understand what the financial situation is and what kind of assistance is actually going to be available as things progress. Not doing that sets both sides up for hard times in the future.

The second step is to research this issue – and the expected health of your parents – thoroughly. Don’t be afraid to use tools like life expectancy calculators to get a bead as to when your parents health may begin failing. Note, of course, that such results are only approximations.

I’ve actually done this with my own parents, as painful as it might sound, and my best estimate is that we have about five to seven years until they’re in a life position where they’re going to need some degree of financial help from us. That gives us a timeline to work with.

The final step is to adequately prepare your own finances for that money crunch. As always, spending less than you earn – preferably significantly less – makes all the difference in the world. If you’re not actively increasing your net worth (either by decreasing debt or increasing savings) each and every year, you’re making a grave financial mistake.

It’s not just a mistake for the sandwich generation, either, though they’re going to have a severe financial crunch in the future. It’s a mistake for everyone who has to fill out an income tax form and mark a dependent on it… or will do so in the next ten years. If anyone in your life – including you – depends on your income or will depend on it, you need to get in the practice of spending less than you earn and saving the leftovers.

If you see any prospect of yourself becoming part of this so-called “sandwich generation,” thinking about it now and even planning for it a bit right now can make an enormous difference when that time comes around.

The post The Sandwich Generation and You appeared first on The Simple Dollar.

Up until January, I had a wonderful job where I handled all of the IT needs for a small company in our area. At the end of last year, the company was sold and the jobs were folded together with another company with the “redundant” jobs being eliminated, and mine was redundant. Since then I have been looking for work without much success and I’ve been working at a local McDonalds.

Christmas is coming and we don’t have much money to buy gifts for our kids. Basically, we have almost nothing at all. I have no idea what to do. My Christmases growing up were wonderful. What can I do to make this Christmas wonderful?

This letter really hit home for me.

There’s a family in my life that’s gone through a very similar situation. In this family, the parents were facing unemployment for most of a year while raising two pre-teen girls. They struggled mightily with their finances, but at the end of the year, they still had the things that mattered. Namely, they had a wonderful family where there was obvious mutual love and care.

The first thing to remember is that no family is perfect. There is no such thing as perfection. It is really easy to look back to the past and see the holidays as this perfect time, particularly when you’re re-examining childhood memories.

When I think back to my childhood Christmases, they were wonderful times, but I can also see that they were not perfect. My father was laid off from his job during multiple Christmases and I had a few members of my extended family who consumed excessive alcohol and made the holidays rather … uncomfortable.

Those negative elements did not make my childhood Christmases into a negative experience. What I remember now are all of the good things. I remember time spent with my grandmother and great-grandmother when they were still living (and quite active). I remember the incredible excitement of the time leading up to Christmas and the wonderful feeling of waking up early on Christmas morning.

Here’s the thing: aside from perhaps one present each year, I don’t really remember the presents at all. There are many Christmases where I cannot recall a single gift I received.

Even as a child, I realized on a very deep level that Christmas wasn’t really about the presents at all, and I’m pretty confident given the tone of your email that your children are similarly thoughtful.

As a parent, it’s important to keep in mind that Christmas really, truly isn’t about the presents. If your worry with regards to the “perfect” Christmas involves having great gifts under the tree, that should be pretty low on your priority list.

In fact, if I were in your shoes, I would try out one of these things this Christmas.

One option would be to mutually agree to forego Christmas presents within your family. Talk about this together as a family. (This does not mean that Santa couldn’t leave a gift for each child, but it would mean that there wouldn’t be other presents.) Talk about the abundance of things that you already have and question whether or not you need more things. Make it into a discussion about what Christmas is really all about with your kids.

Hand in hand with that, you could spend Christmas Day voluntering as a family. Look for a soup kitchen or a food pantry to work at. Almost all of these charities are open on Christmas Day because quite a few families actually do this, and they always have things that need done.

You can carry that even further by doing what we call “reverse Christmas-ing.” Instead of getting presents, all you do is give them on Christmas Day. For example, you could spend a few weeks as a family beforehand doing a small canned goods drive and then donate all that you’ve collected on Christmas Day. Thanksgiving is a great time to jump-start such an effort.

Another option (if you truly don’t like the gift-free route) is to make gifts. Simply have everyone in the family make something for everyone else in the family. If you don’t have a skill that you can use here, learn one. It’s okay if the other person knows what you’re making – in fact, it can make for some great family evenings throughout December.

No ideas here? Learn how to knit or crochet so you can make a sweater or a scarf. Learn how to cook so you can make a big batch of someone’s favorite cookies. Work hard on creating a nice piece of art, then frame it so it can be hung in someone’s room (this is a great one for kids to make for parents). The supplies for these items do not cost very much. The real investment here is thought and time.

Yet another option is to select one gift as a family for the whole family to enjoy. Sit down and think about the things you enjoy doing together as a family, then talk about one item that would improve one of those experiences. Then, purchase that item, wrap it up, let the children open it on Christmas morning, then spend part of the day utilizing that item (if possible).

There’s one big thing worth noticing here. Everything on this list involves time spent with your family. In the end, that is what matters about Christmas.

If you’re worried that your kids will be disappointed by fewer presents under the tree (or none at all)… well, they might be. It’s a disappointment that won’t last very long, though, if you are actively spending time together and building a strong bond with them. It’s that bond that will last, not concern about what was or wasn’t under a tree in your living room one morning.

The post Christmas Worries appeared first on The Simple Dollar.

Today, I’m going to talk about my daughter.

In many regards, she’s a pretty typical four year old girl – at least judging by her peers. She likes to play dress-up – in fact, we have a dress-up tub in our basement just for her. Her favorite place on our property is the sandbox, and the part about winter that she hates is that she really can’t play in that sandbox. She loves to sing and dance, and we can rarely drive more than two minutes without her bursting into song in the back seat. Her favorite toys are building blocks, from which she can build giant towers and crazy sculptures. She seems to believe that a day isn’t complete without an art project, preferably one that involves paper and glue and markers and pens and clay.

Of our three children, she’s often the one I have the hardest time relating to. I grew up in a household that held nothing but boys. All I have is brothers, and all of their friends and most of my friends growing up were boys. The only children close to my age that lived near us were boys. I’m used to the “boy” experience and I understand how boys respond to most situations. The behavior of my oldest child and my youngest child – both boys – makes sense to me based on my own experiences.

My daughter is a bit of a different story. I find myself often watching how she acts more than the other two simply because she often reacts and does things in ways that I don’t expect. She’s a beautiful enigma to me at many times.

After her fourth birthday, we started giving her an allowance, just like her older brother. They both use Money Savvy Pigs and divide up the small weekly allowance (paid in quarters) among the slots.

My oldest son has always taken the “invest” slot in the bank for granted. He puts the minimum amount of quarters into that slot and, although he occasionally asks about it, he actually focuses more on the “save” and “donate” slots. He’s not much of an impulse spender, as he’s already been able to save up for a few very expensive items, and he’s proud to be saving his nickels and dimes for Jump for Joel.

My daughter, on the other hand, was immediately curious about that “invest” slot. What will we do with that money? Will we spend it? What does “I-N-V-E-S-T” mean?

I told her that the money in that slot was for saving for things when she was much older, like college or a car or something like that. We talked a little bit about how many quarters would be in that slot by the time she was sixteen.

Then, I set the hook. “You know, the money in that slot has the power to grow on its own.”

Her eyes lit up. I explained that we could take that money to a bank and put it in a savings account, and for every four quarters she left in there for a while, the bank would give her a penny. I mentioned that there were other things you can invest in where you might even earn more than that, but you might also lose some money, too.

She was fascinated. She wanted to start “invess-TING” right now. Right now.

Before I had a daughter, I didn’t know what to expect. Now I do. This girl is a thoughtful, intelligent, quick-witted, vibrant person who deserves every chance in the world to take it all by storm. She has all the ability in the world and a skill set that is different from but at least equal to that of her siblings.

When I hear that there is still a pay discrepancy between genders, I shudder. She’s growing the passion and skills needed to take on practically any job thrown before her, so why should she not receive equal pay?

When I see that an opportunity discrepancy still exists (whether in fact or in perception), I shake my head. She’s incredibly capable of taking on impressive challenges, even at her young age. Why shouldn’t she get that opportunity as she reaches adulthood?

One of the personal goals that Sarah and I have for our children is to ensure that they can follow any educational path after high school that they wish and they won’t be limited by money or economic opportunity. Part of achieving that goal is to make sure that they have every skill and every piece of knowledge that we can give to them as they grow up. I want every single one of them to swing for the fences, and the biggest thing I hope for is that they’re each judged by and are given opportunities by the level of their skills and the content of their character, not by their gender.

How do we do that? We have well-funded 529s for each of them. We spend a lot of time engaging with them on educational endeavors – a trip to the Science Center of Iowa is a family event, for example, and we’re constantly doing writing activities and math activities and science experiments together as a family. In contrast to a lot of what we see around us, we’re encouraging our children to take control of tasks and projects and assert their independence. For example, our six year old can find his clothes, take a shower, get himself dressed, brush his teeth, pack his backpack, and get out to the bus stop in the morning (I’m around to converse with him, but he does this himself).

This little girl (and her two siblings) deserves every opportunity in the world, and it’s our job to make sure they have every tool we can give them to grab ahold of those opportunities and run wild with them. Doing that is a financial commitment and a time commitment and an energy and patience commitment, but it’s one that has giant rewards: independently functioning and thinking adults who can make a positive impact in the world.

That, to me, is “invess-TING” at its finest.

The post Finances, Opportunity, and the Path of a Little Girl appeared first on The Simple Dollar.

On Friday morning, my oldest son woke up quite ill. We took him to the doctor and he had strep throat. Trip cancelled.

All of us were disappointed, to say the least. My son was fairly miserable on Friday, so we had a quiet day around the house. On Saturday, he felt better and by mid-afternoon he asked us when we were leaving to go to Chicago. When we told him that the trip was off, he broke down in tears, as you might expect from a five year old who just lost a trip he’d been looking forward to for a month.

The first reaction my wife and I had was to do something splurge-y to replace the trip. What sort of big, fun thing could we do to replace the disappointment of losing our trip?

After we thought about it for a bit, though, we realized that what we were missing was the fun of the trip, not the splurge of the trip, so we spent the rest of the weekend with that idea fully in mind.

We had a movie marathon with the lights turned down low and bowls of popcorn for everyone (so that the child with strep wouldn’t be sharing his germs with others).

We got some dyes out of the art kit and made tie-dyed shirts for the entire family.

We hooked up the grass sprinkler to the water hose on a warm afternoon late in the weekend.

We filled up our inflatable kid pool that day, too.

We played several elaborate games.

We made giant castles out of Legos and Magna-Tiles, too.

We made everyone’s favorite meals out of the foods we had on hand (and got everyone except for the sick child involved in the cooking).

When our sick child was feeling well, we went on a bicycle ride through our neighborhood.

In the evenings, my wife and I stayed up late – not cleaning, as is often the case, but playing games with each other and sitting on the deck together sipping wine using a bottle we’d had in the cupboard for a while.

When we took the children to visit their grandparents late on Monday (as was the plan before the illness – we were going to drop them off in the middle of our return trip from Chicago), we realized that even though we had all missed out on a trip we had been really looking forward to, we still managed to have a very fun weekend anyway without splurging on things to “take the edge off” of our disappointment.

When you miss out on something fun that you’ve been looking forward to, don’t just replace that fun with stuff. Instead, replace that fun with some other flavor of fun. It’s a lot cheaper and makes a lot more sense.

The post Handling the Disappointment appeared first on The Simple Dollar.

At that dinner, the couple asked Sarah and I if they could name us as guardians for their children in their will. We told them that we would have to give the decision some serious thought and discussion, and unsurprisingly it’s been a significant topic of discussion between Sarah and myself over the past few days.

Because this is an issue that other families are sometimes faced with, I thought I’d share some of our thought process with you with regards to this decision. I should point out that we haven’t made a final decision yet.

As is usually the case, we’ve made a list of reasons why we should do this, along with a list of reasons why we shouldn’t do this.

Why We Should Do It
The biggest reason is that their children will really need us if they lose their parents. We may be the best option they have for a stable life that offers some degree of continuity with their life with their parents. To me, this is the biggest reason for us to do this.

There’s also the consideration that it would take a weight off of the minds of our friends right now. As their family has grown, their concerns about child guardianship has grown as well. The simple knowledge that their children would be in a stable home if they were to pass would take some stress off of their shoulders.

We also would not have significant financial concerns, as they have strong life insurance policies and would change them to have us as secondary beneficiaries. According to my math, the amount received would actually exceed the amount needed to continue raising their children in their stead. If we properly used the money received from the insurance, we would be able to provide for the new children fairly well.

Why We Shouldn’t Do It
The big reason against doing this is that we’re unsure of our capacity to raise that many children. This would suddenly add several children on top of the three we already have, and frankly Sarah and I are unsure that we would be able to do this and still give each of those children the love and support they would need.

This really breaks down into three main “sub-concerns.”

First, would we be able to continue to be great parents for our own children? Our time would be spread more thinly and we would have less time for one-on-one interaction with our own children if more were suddenly introduced.

Second, would we be able to also be great parents for the new children? This is similar to the above concern, of course, but it’s also an issue when we compare ourselves to other potential outcomes for these children. With that many children under one roof, are we really the best option for them?

Finally, would we be able to have a functional and satisfying marriage with that many children? There are times where three children puts our marriage under stress. What would we do with several more children?

Clearly, we would have to adjust some significant portions of our life if this occurred. Sarah may return to a stay-at-home mom status, for example, and I may have to find some assistance with maintaining The Simple Dollar.

This is one of those moments in life where there is no clear “right” choice. There are two choices, each with good and bad elements to them, and each with serious consequences. Such decisions should never be taken lightly.

I’ll let you know when we make up our mind.

The post Should We Become Named Guardians for Several Children? appeared first on The Simple Dollar.

I have a single response that I always give to this type of question:

You should only co-sign a loan that you’re perfectly happy paying off yourself.

If you would be unhappy with being forced to pay for the loan yourself, then you should not be cosigning that loan.

Here’s why.

First, the reason a lender wants a cosigner on a loan is because they believe that the person they’re lending to has a high likelihood of not paying back the loan. Usually, a person that needs a co-signer is a person with poor credit or, in some cases, a person with no credit history at all. This means that either they’ve never dealt with the ins and outs of paying a loan back before or they’ve attempted it and failed to pay back their obligations.

Second, if that person who the bank has deemed untrustworthy proves the bank to be correct, you’re left holding the bag. Co-signing isn’t just a way to help a friend. It essentially means that you’re hung with the debt if the primary signer decides not to go through with actually repaying the debt.

Third, when you turn a personal relationship into a financial one, you introduce a lot of strain in the personal relationship. If they default on this loan, what will that do to your relationship? It will be very, very hard for the two of you to be as close as you once were.

These three things together make for a dangerous mix. They put your finances at significant risk without any direct benefit to you. You’re betting that someone is reliable when someone else who is not involved has looked at the evidence without emotions clouding their judgment and came to the opposite conclusion.

To put it simply, you’re saying, “Sure, I’ll take on more risk than the bank.” You know, those paragons of financial stability who were quite willing to hand out adjustable rate mortgages like candy and almost tanked the United States economy.

“But I really want to help!” This is often the reason that people use to talk themselves into such large amounts of risk. The person asking for their help is someone who they genuinely want to help and so they let their emotions cloud their judgment and sign away.

Here’s the thing: you can usually help quite a lot without signing on the dotted line.

Offer resources that you can give them. If you want to financially help someone, don’t do it in a way that puts you at risk and don’t enter into a financial arrangement with them that could damage your relationship. Instead, make it a gift. Give them some cash to buy a beater to get back and forth to work or to put a deposit on an apartment. Let them live in your spare room for a few months. If they want to pay you back, let them, but make it clear that you don’t expect repayment.

Offer intangibles. Invest your time in them by driving them to job interviews or taking them around to buy a car. Invest your contacts in them by calling someone you know who can help them get a job. Listen to what they’re talking about and going through and offer your advice and whatever else you can offer.

In other words, offer all the help you can without introducing unnecessary risk into your life. Don’t co-sign, but offer help in every other way you can.

From my perspective, there is one exception to this. I think that the intangibles related to a parent co-signing on a student loan for their freshly graduated child likely add up to more than the risk of signing such loans. In that case, a parent is often a fairly good judge of the situation and if they view the risk of co-signing in this situation as acceptable, it seems to me to simply be an extension of the risks of parenthood.

The post Never Cosign a Loan Unless You Want to Pay It Yourself appeared first on The Simple Dollar.

How do you do it? You write tons and tons of stuff for The Simple Dollar, your wife works a full time job, you seem to have tons of time available for your kids, you read quite a bit, and you also seem to have a somewhat active social life. How do you do it? Do you not sleep?

There are a handful of tricks to making this all work. I’ll outline several, but I’ll start with the big one.

The line between work and family is pretty blurry at our house.
As I’ve mentioned before, I set aside a block of time each day to spend with the kids – and my wife does the same. This block usually goes from about 5:30 in the evening until 8:30 in the evening, with the last half-hour or so involving one of us putting the kids to bed while the other one does something else.

Outside of that, the lines between work and family are really blurry at our home. We’ll engage in family activities and in the middle, I’ll yank out my pocket notebook and jot down some notes. I’ll read books for review for The Simple Dollar in the late evenings when my wife is enjoying a piece of meaty fiction. My wife (who is a teacher) will grade papers on the way to an activity while I’m driving, or I’ll gather notes while she’s driving. Sometimes she even helps out with background tasks for The Simple Dollar, brainstorming ideas, correcting posts, and even helping with writing tasks here and there.

It’s not uncommon for us to spend a rainy Saturday afternoon watching a movie in the family room. The kids will choose a Pixar movie we’ve seen a dozen times and my wife and I will fire up our laptops, hers to record some grades and mine to answer some emails.

It doesn’t feel intrusive – at least not to me – because I enjoy the work so much. I love to write. I love to communicate with readers (in fact, I love it so much that I often get behind simply because I want to respond to as many emails as I can). It just feels – most of the time – like just another enjoyable thing to do in my life.

During the school year, the kids do go to daycare, a decision we put a lot of thought into before we chose it. The biggest reason, actually, was for the kids themselves – there are cognitive benefits and health benefits to such attendance. That doesn’t mean that we dump them at the door and run – I often spend days with them, taking them to the Science Center of Iowa or to the library or to the park – but I do try to maximize the time they’re at daycare, doing tasks that they can’t participate in (my work) or would greatly hinder.

The end result of all of this is that my children get my undivided attention vastly more than they did when I was working a full time job. When I had work intruding on my life then, I was either out of the house or mentally distracted when I should have been spending time with them. Now, when they need me and something work-related is on my mind, I have the freedom to slam the door on work whenever I choose. Plus, because I enjoy my work, I also have the freedom to pick it up whenever time allows without hating how it’s interfering with what I want to do – it is what I want to do.

We own one television – and it’s rarely on.
In the last month, the television’s primary use has been twofold. It’s kept us up to date with local storm coverage (since we’ve had some awful weather as of late) and it’s provided the source of our “family movie night,” where all four of us (once a week or so) watch a movie together. Other than that, I think it’s been on roughly two hours (to watch True Blood).

That’s it. The only television we own is down in the basement, and we simply don’t go down there that often. We’re too busy doing other things that we enjoy – activities that often involve active interaction with our children (like drawing pictures or building a giant model railroad).

We do lots of household chores together as a family.
We cook meals together. We clean together. We work on art projects together. We wrap presents together. We do dishes together.

Virtually any task that the children can possibly participate in is done in a social fashion. Everyone gets more out of it if we work together. Sure, there might be minor setbacks when the children get involved, but they offer a lot of help, too. Even our twenty one month old daughter can scrape plates and put them in the dishwasher (seriously) and our three year old loves stirring cookie batter.

The more things like this that we do together as a family, the tighter we bond and the more real world skills our kids have. Doing things this way turns household chores into opportunities for family bonding – and often gets things done just as fast, if not faster.

Many of our friends are also parents.
If you’re friends with parents that have children of a similar age, they’re much more understanding about things like taking kids to the bathroom or washing their hands. They’re also much more likely to be helpful when you need a hand, and you have a lot of experiences and advice worth sharing.

Here’s a perfect example. My wife had four bridesmaids at our wedding – two of them were her sisters and the other two were long-time friends. Today, one of those friends has a son that’s literally one day younger than our own, while the other has a daughter in between the ages of our kids and an infant son. The children have become part of the social bonds tying them all together.

Thus, our roles as parents and as social creatures overlap.

We choose enriching things for our relaxation time.
So when do we relax? Almost every evening, my wife and I spend some time unwinding. That time, though, is often spent reading or playing a game that requires some thinking. Last night, we both read for an hour and a half, side by side, before bed. The night before that, we played Dominion over a bottle of wine.

In short, we make an effort to keep our minds “on” as much as possible during the day.

Turning my mind “off” is done in a very focused way.
Obviously, though, being “on” all the time isn’t the best thing, so I have what I think of as an extremely focused “off” time each day. I meditate/pray for about twenty minutes – I clear my mind and do a few very basic relaxation techniques. Often, if I do this later in the day, I find myself hugely mentally refreshed for the evening instead of burnt out after a lot of work.

I used to try to do something like this during my commute, but it never really worked well, so eventually I settled on meditating/praying right when I got home. It’s a late afternoon tradition for me that I’ve used ever since – and it makes a huge difference in my energy and alertness in the evenings.

Doing these things – blending work and parenting and play, meditating, socializing with other parents, and engaging in activities that are usually mentally enriching – has been invaluable for juggling all the roles we have without needing to shell out the cash to bring in extra help (like a housecleaner, for example).

The post Blending Work and Family: How We Do It appeared first on The Simple Dollar.

First, there’s the celebrate your mother camp – the people who feel that Mother’s Day is a perfect opportunity to show your mother that you care for her, either through action or through a gift. On the other side of that coin is the Mother’s Day is a day invented by the greeting card industry group, those who feel that the entire concept of a “mother’s day” is just an excuse for consumerism.

To tell the truth, I agree with both sides of the issue. Mother’s Day may be a contrived invention, but the reason behind it is one I wholeheartedly agree with – it’s always worthwhile to celebrate our mothers.

The solution is simple: the best way to celebrate your mother isn’t by waiting until a particular day and celebrating it with consumerism. Instead, find ways to show your mother that you truly care – and those ways rarely involve heading to the store and buying greeting cards and other things. Here are eight things to try, whether or not you’re waiting until May 10 to celebrate it or you want to treat every day as Mother’s Day.

Apologize. If there is a rift between you and your mother, there is simply nothing better you can do than apologize. Before you do, though, take to heart what it means to truly apologize. Spend some time really reflecting on the rift that has grown between you and look for your own faults. What did you do wrong? Sure, it’s often easy to blame the other person for the problems, but let yourself go beyond that – you’ll grow as a person and open yourself up to repairing a painful rift if you do.

Write a letter. Sit down, put a pen to paper, and actually write a letter to your mother. This is a perfect opportunity to let her how what she has meant to you over the years. If you’re not sure what to write, just tell stories. Write about the memories you have of her that have really influenced you – and then mention why they influenced you. This written letter will mean far more than any card ever would.

Make a phone call. You can do much the same thing over the phone if you wish, but it’s often just good to place a long phone call to your mother and just talk about everything. Put some time aside for the call so that you can focus on what your mother is actually saying – especially between the lines – and also relate openly about the things you’re feeling and thinking.

Pay a visit. Spend an afternoon with your mother. Watch a movie together. Have a conversation. Eat a meal together. Let the conversation flow. Time spent together is the most valuable gift you can give.

Do a favor. There’s almost always a task that your mother needs done around her home. Perhaps a room needs repainted. Maybe the car needs detailed. Maybe the shrubs need trimmed. One spectacular gift is to simply do that task, no questions asked. Just take care of it, so that the weight of the task is removed from her mind.

Prepare a meal. Visit your mother’s house, sit her down in the kitchen with you, then prepare a meal while conversing with her. Set the table, serve the meal, then clean up all the dishes and appropriately pack away the leftovers. Leave the house just as you arrived (except with perhaps some food in the refrigerator) and you’ll leave a parent that knows that you care.

Make a video. Take a video of the important things in your life. For me, it would be filled with my children and my home. I’d take clips of my kids playing in the yard, our garden beginning to emerge, and so on. Edit this together into a short film and include a bit at the end that tells your mother how much you care.

Involve yourself in something your mother cares about. Attend a service at her church. Show up at her bridge club meeting. Spend a Saturday at Habitat for Humanity. Most importantly, do these things without reservation – put your heart into it, even if personally you aren’t involved in it. Let her introduce you to her friends and take a bit of pride in you. At the same time, show her that she matters to you – and the things she values are important to you, too.

What’s the common theme in all of these ideas? Time. Not money. Time is the gift that has real value when you’re showing someone that you truly care.

This Mother’s Day, don’t worry about spending your money on a card or a fancy gift. Instead, start now on something that’s an investment of your time. That’s a gift that will really matter.

The post The Mother’s Day Debate – And Eight Sensible Ways to Solve It appeared first on The Simple Dollar.

When she passed away, the initial shock was difficult, but it was actually much harder after the funeral, when I tried to get back into my normal routine. To put it simply, I didn’t want to write. I felt down. I kept thinking about Grandma – and also about how my mother was dealing with things. Memories kept popping into my head. The last thing I wanted to do was to write or do research. I mostly just wanted to hide under a blanket somewhere.

Then I realized something. If Grandma saw me sitting around feeling that sorry for myself, she would let into me like no one’s business. She constantly expected great things from me, more than other people, and she told me why once – because she knew that I was capable of it.

So I spent some time putting myself in a better psychological place – and it really helped. Here are some of the things that really worked.

Let it out The quicker you let it all uncork, the better off you’ll be. I spent some time thinking about the happiest memories I had with Grandma and, before long, the tears came, hot and hard. I cried for a bit, then I felt much better about things.

Exercise I went on a three mile walk, then I did a little bit of interval training (basically, I ran as fast as I could for a block, then stopped until I caught my breath, then did it again, repeating several times). Endorphins do wonders for lifting your mood and making you feel better, even if it’s just a nice walk.

The outdoors After my walk, I sat outside in the grass for a bit. It was pretty cold (winter has been trying to fight back against spring here in Iowa over the last few days), but the fresh air, the sunshine on my skin, and the sound of birds in the trees brought me a steady and happy inner peace. I wound up tinkering around in the garden for a bit, enjoying the outdoors and being refreshed by the sweet spring air.

Simple meditation A period of simple meditation can help clear any troubled mind. Here’s a very basic one that works well for me. I get in a comfortable chair with my feet up. I close my eyes, then I focus on nothing but breathing. I breathe in for a four count, then breathe out for a four count. Once that becomes easy and natural, I focus on each part of my body, starting at my toes. I try to focus on making them go completely still. I move up my body, until I’m to my head, and I’m usually pretty close to sleep (but not quite). Then I go in reverse, back down my body, imagining those pieces coming back to life. It takes about twenty minutes and always makes me feel relaxed and more at peace with the world.

YouTube I have a big collection of YouTube bookmarks that simply lift my mood. They usually take me back to moments in my life that really made me happy, and each one usually gives me goose bumps. Here are a few of them.

Conversation I’ve talked to countless friends and family members over the last few days. Each conversation has helped. A simple phone call does the trick … and a good friend always listens and has something helpful to say.

Children I’ve spent a ton of time playing with my children. A child at play subtly convinces you to let go of the concerns in your life and simply revel in what’s happening at the moment. Rolling around on the floor with my daughter, playing Memory with my son, and having a dance party in the basement with them helped cure a lot of what I was feeling.

Love Just now, as I was writing this, my wife came into the office, put her arms around me, and gave me a big hug. Her constant, unyielding love helps with moments like this. She’s a constant source of support and conversation, and when I’m facing a difficult moment like this, she’s there for me in every way.

The post Lifting Your Spirits For Free appeared first on The Simple Dollar.

It shocked me, to say the least. Here are some of the things the last few days have taught me.

The grieving process is different for everyone. After I received the call, I cried a bit. I sat in a daze for a while, thinking about my grandmother. I then threw myself into doing something, calling a few distant relatives, then cleaning out the pantry in order to give my mind and body something simple to work on.

That time gave me what I needed to be emotionally strong for the funeral and the family events before and after.

Other family members dealt with things in different ways: tears, humor, solitude, eating, cooking, cleaning, and so on. Some wanted to talk about Grandma. Some wanted to talk about anything else. Some wanted to talk about nothing at all.

The best thing you can do is take a deep breath and realize that everyone around you is dealing with the same painful thing you are, in their own way. Be there when others want to talk, back off when they don’t want to, and feel fine giving yourself the room you need.

Times like this are what emergency funds are for. Obviously, the news meant our weekend was filled with an unplanned trip to spend a lot of time with people who weren’t expecting us to visit. This meant a lot of unexpected expenses – a long road trip, food, flowers, and so on.

If we were back in our paycheck-to-paycheck days, this would have been a big problem for us. Our budget for the next month would have been seriously hampered by the onslaught of little expenses here. More importantly, it would have added more stress into an already stressful time.

Instead, we didn’t worry about this at all – we just handled it. Our focus was on our family and our grieving process, not on whether or not we could afford to buy several bags of groceries or a 400 mile road trip or a contribution to a floral display for the funeral.

Times like this are when a strong social network comes through. The large social network that my parents have (that I’ve mentioned before) came through time and time again during the days between my grandmother’s passing and the funeral. They provided lots of food, lots of companionship, and help with arrangements as well. They ran errands, made phone calls, got deals on flower arrangements, gave advice on estate issues, and many, many other little things during those painful days.

These people didn’t need to be called or asked to help. They didn’t expect anything in return, either. They were simply willing to do it, no questions asked.

Why did these people simply do this? Why did they just step up out of nowhere when they were needed? They did it because my parents had always done it for them, no questions asked. My parents spend so much of their time helping others, providing advice and food and phone calls and technical assistance and many, many other things to the people around them on a daily basis. If they see someone near them in need, they simply help them instead of worrying about their own needs and free time.

That giving nature was returned to them in spades this week when they needed it – and they always have that helping hand when they find themselves in any difficult situation.

Rarely have I seen such a clear example of why it’s incredibly valuable to give freely of yourself.

Letting go of the bad memories is vital. When people pass away, there is a window of opportunity there to let lots of little things be bygones and let petty bad memories take a back seat, at least for a little while.

It can be painful to see some people at such a time, but there is no better time to embrace those people and begin the process of rebuilding a broken relationship.

I was able to watch this very thing happen a few times over the last week – and I truly hope that the end of my grandmother’s life will be able to plant the seeds of a few rebuilt relationships.

Perhaps, in some ways, this is my grandmother’s final gift to all of us.

The post Thoughts After Losing a Loved One appeared first on The Simple Dollar.

Last Thursday, for example, my wife stayed home with our daughter to take her to her eighteen month checkup at the doctor. I had a lot of work to do, so I went into my office, closed the door, and got to work.

After a few hours, though, I heard my daughter in the hallway. She was standing just outside the door and, quite loudly, she said “Daddy?”

My instinct, right then, was to run out in the hallway, sweep my daughter into my arms, and go play with her in the family room for an hour, reading her books and wrestling with her and playing “ring around the rosy” with her.

But right in front of me sat several work tasks, things I needed to get done. I had posts for this site that needed written. I had a contract revision that had to get printed, signed, and faxed. I had a freelance article that needed mailed. And I had fully intended to do some reading and research.

If I chose the work, I’d get the things done that I needed to do to pay the bills. I’d keep my readers happy and my publishers happy. I’d also have less on my plate to worry about for future work.

At the same time, my daughter would sadly wander away from the door, wondering why her daddy didn’t play with her. Likely she would forget it shortly, but if I make the work choice too often, it begins to establish a pattern in her mind.

On the other hand, I could let the work sit and go play with my daughter. That would be the most fun choice and it would reinforce the great bond I have not only with my daughter but with my wife. Later, though, I’d be faced with a mountain of work that would have to be dealt with – or I’d let someone seriously down.

I wound up choosing my daughter, but it wasn’t an easy choice and it left me staying up very late working on things – and left me exhausted the next day.

Why did I make that choice? I realized the reason I was working at home was so that I could spend that quality time with my family. I could have very easily made the wrong choice here, choosing work over family, but in the end, making that choice would have undone the synergy in my life.

I chose lower income and a more flexible schedule so that I could spend more time with my family. Thus, when I have a choice between work and family, the choice should be easy. Family wins. My life has synergy – everything points towards quality time with my family. Work serves to support that time, not to replace it.

Our purchases serve that purpose, too. Our biggest consideration for purchasing a car is reliability. Why? We minimize our concern about major automobile breakdowns, leading to less family disruption. Our long debate about a GPS purchase (why not just use a map?) came down to family issues as well – where’s the nearest bathroom? Where’s the nearest hospital? Where’s the nearest park? These are questions a typical map can’t answer – but they’re invaluable when you’re traveling with kids. (Since people will ask, we own a Garmin nuvi 760)

On the flip side of that coin, we also cut out a lot of unnecessary purchases to save for other things: college, retirement, a big emergency fund, and so on. We don’t buy many items for entertainment – instead, we use the library and PaperBackSwap and SwapADVD and SwapACD and SwapTree – plus our family time is entertaining. We eat at home almost exclusively because it gives us more control over healthy food choices – and it’s cheaper.

When we hit financial bottom, we didn’t have any sort of synergy to our lives. I’d go to work and work like mad, then immediately spend that earned money on frivolous things. I’d spend time with my wife and son some evenings, then choose activities that completely excluded them at other times. I’d think of long term goals, but I’d change them completely by the next day and never really work towards them.

Now, my life has synergy. Almost everything is centered around being a good parent and a good husband. Writing is my creative release, allowing me to throw out the ideas floating around in my head and giving me the mental freedom to focus on my family. The things I do that I consider “work” mostly serve to find ways to earn income from that writing to keep a roof over their heads.

Using that as a lens, it’s easy to figure out that spending less than I earn is a good move. It’s also easy to figure out the priorities when I do spend.

What’s harder is figuring out how to be the best parent I can be.

The post Synergy in Life and Money appeared first on The Simple Dollar.

My wife journals extensively, so for this post, I’ve borrowed some of her writing about the garden to help describe some of the early steps for our 2009 garden. She also explains quite well how exactly we get our children involved with our gardening plans.

Sarah’s journal, March 18
Today I took the kids to do some shopping. I was just intending to get peat pellets to start the seeds in, but when I got there I saw a whole set-up with 72 peat pellets in a tray with a lid for $6. The tray is reusable, so next year I can just buy the pellets.

In addition to the pellets, I also bought a bunch of seeds. I had Joe (our son) help me with this part. His current favorite vegetable is cucumbers, so we bought a packet of those. I also had him decide whether to get muskmelons or watermelons (he chose muskmelons). Katie’s (our daughter) favorite vegetable is broccoli, but I couldn’t find any seeds for that. I will have to go to another garden store for those. In addition to the cucumbers and muskmelons, I bought pole green beans and three kinds of tomatoes –Burpee’s Big Boy Hybrid (“outstanding flavor”), Super Beefsteak (“large and disease resistant”), and Super Sweet 100 Cherry (“extra-prolific cherry”). We’re planning on turning a bunch of the bigger tomatoes into sauce, which is why I got two kinds.

Along with the vegetables, I bought a packet of marigolds. My sister, who worked at an organic flower garden for a while, claims that marigolds keep away some bugs, so I always use them for borders in my vegetable gardens.

All together, the cost before taxes for all of this was $13.50 ($6 for the tray, and $1 each for the seed packets, except the cucumbers, which were $1.50).

Here’s our peat tray and some of the seeds we selected for use this year. The almanac was a Christmas gift – it’s a pretty good guide for identifying when exactly to plant in our area. We use it hand in hand with weather forecasts to make a good guess as to when it’s safe to put plants in the ground so they won’t be destroyed by frost.

In addition, we also have a few leftover potatoes from last year’s crop:

We’ll simply cut this potato up into pieces and plant the pieces directly in the garden. The potato sprouted perfectly in a bag in the pantry, where it’s fairly warm and quite dry.

We get the kids involved by having them make several choices about what we plant. Last year, for example, our son Joe was wild about planting carrots, so we planted quite a few carrots in the garden. This year, he was much more enthusiastic about the melons, but our daughter is crazy about broccoli.

By growing things that the kids are excited about eating, they become excited (by extension) about the garden as well.

Sarah’s journal, March 19
Today I worked on clearing the garden of last year’s dead plants, and I also did some weeding. The nice thing about clearing out old dead plants is that it’s really easy to have young children help. Basically, they can’t pull up the wrong thing. If it looks dead, pull it up.

After pulling up dead plants in both the vegetable garden and the ornamental gardens in the front, I’m realizing that our one barrel composter isn’t going to be nearly big enough for all of the garden waste we generate. I’m considering starting a plain old ordinary compost heap behind the vegetable garden.

I also checked out the perennials that we planted last year. Some of the herbs seem to be coming back, and the strawberries are definitely coming up. In fact, I’m a little worried that the strawberries will try to take over the garden. I don’t see any asparagus yet, but I think it’s a little early for those.

I also set the chicken wire around the garden back up. I’d hate to have the young perennials eaten before they have a chance to get going.

In the evening, I had Trent and the kids help me add water to the peat pellets. The tray required 10½ cups of water, so Trent brought water over in measuring cups, the kids poured it in the tray, and I helped make sure Katie didn’t pour the water over herself and the kitchen floor. We couldn’t plant the seeds yet, because it takes peat pellets a while to soak up water.

Here’s our mostly-cleared garden as it sits right now.

We didn’t get the covering off the ground last fall before the first blizzard came through, dumping more than a foot of snow on us which remained for months. We hoped that the covering would be in good shape in the spring – and it is pretty good, at least usable for the coming year.

Soon, we’ll strip the covering off the garden, spread some compost, and till the whole thing just before planting. Since we do not own a tiller (and don’t have extensive need for one), we’ll either borrow a small one from a neighbor or perhaps rent one for a day from the local hardware store.

The waste headed for our barrel composter…

Our composter is a great size for catching a small amount of yard clippings and all of our vegetable table waste, but it’s not exactly big enough to deal with a huge amount of garden waste. Thus, we’re discussing getting either a second barrel composter or perhaps a small chicken wire composter.

In this picture, the compost is just beginning to work. We’re keeping it moist with very warm water and occasional spadefuls of dirt are tossed in to add microbes to continue the composting process. Our goal is to have nice, rich spreadable compost just before we begin to plant next month.

Sarah’s journal, March 20
The kids are at daycare today so that I can get a little bit of work done around the house before going back to teaching. This also lets me do some more of the time-consuming tasks that the kids would get bored with, like planting the seeds (they don’t really have the fine motor skills to help with that yet).

I started by planning how many of each kind of plant I want and deciding where to put them in the tray. I printed out a map of the tray using a spreadsheet program, which I taped to the front so that I can easily see it while I’m planting seeds. I’m saving the extra seeds that I’m not using, in case something doesn’t grow, or I just decide later that I want more of that particular plant. Some plants, like lettuce, can also be planted a second time during the year.

I also pulled out the Farmer’s Almanac that we got for Christmas and looked up when each thing that I’m growing should be moved out to the garden. I wrote those dates on our calendar in the house, as well as one that we’ve got hanging in the garage with the garden tools.

Here’s our planted tray.

We started a bit later than usual this year with our seedling prep – usually, we’re getting this started much earlier in March. However, last year we lost a lot of plants to a late frost and we’re fairly timid about it. Plants will likely go in the ground much later this year, which does push our harvest well into August and early September instead of harvesting in late July and early August as we did last year.

The sheet of paper there is a chart that shows what each spot in the tray contains.

This simply helps us keep track of the planting. Also, here’s our garden calendar – the calendar itself is actually a free bank calendar with a bunch of astrological information already on it.

Notice we’ll be planting the lettuce on Friday or Saturday. Lettuce is hardy and will survive a spring frost or two. Our April calendar has quite a few dates marked in a similar fashion.

In a month or so, we’ll offer an update discussing the planting process.

The post Spring and the Awakening Garden appeared first on The Simple Dollar.

[...] In short, we are going to have to be out of our house by October 24. We’re going to move in with [my brother] and his family for a while and then later try to find a place to rent.

We made bad money mistakes and we know what we did wrong. We should have never bought our house. We should have never got that mortgage. We just tried to make the best life possible for [their eight year old son].

So here’s my problem: we haven’t told [our eight year old son] about this yet. We don’t know what to tell him or where to even start. This is the only home he remembers living in.

My mother thinks we shouldn’t tell him anything. We should just say were moving to a new place and we’re going to live with [my brother] for a while.

But [he]‘s smarter than that. He knows there is something going on and he won’t fall for it.

What should I tell him?

This email (which, admittedly, I edited a fair amount to protect the privacy of Peggy, her son, and the rest of her family) caused a more painful reaction for me than anything I’ve read since I’ve started writing The Simple Dollar. I look at my almost three year old son and I can’t imagine having to explain to him in a few years why we have to move out of this house that he’s grown up in.

Needless to say, over the last few days since I received the email, I’ve spent a ton of time thinking about Peggy’s situation. It’s the first reader email I’ve brought up with my friends, and I also mentioned it on Twitter, just to try to get more angles and perspectives on it.

My first reaction was to agree with Peggy’s mother and encourage Peggy to simply not talk about it. It’s a very frightening time when you’re losing your home. I can’t imagine explaining it to a child. You’re in some ways ripping away one of their basic elements of security in the world.

Some further reflection brought me to a different conclusion, though. My thoughts actually began to turn around when I was taking my son to daycare. He’s just a bit short of three years old. We stopped at a gas station on the way because gas was clear down to $2.89 and I wanted to fill up my tank.

I told him we were going to stop at the gas station and he asked if we needed gas. I told him that we didn’t, but that I wanted to get gas now because it was really cheap – that way, we could have more money left over to buy other things. He immediately shouted, “So we can buy more pizza with wheels!” (His favorite food is a plain cheese pizza with black olives on it – pizza with wheels.)

My two year old son understood the basic idea of budgeting: sometimes you need to spend less on some things so that you can afford other things. In the end, that’s the basic reason why one would lose a house to foreclosure. Conceptually, an eight year old should be able to understand it.

I asked a few people I know who are actually parents of children between the ages of seven and nine how they would handle it, and they almost all provided passionate arguments on behalf of candor with the child, confirming my idea that candor is really the best approach here. To a certain point, of course.

If I were in Peggy’s shoes, here’s what I would do.

First, I’d spend a lot of quality time with my child right now. Even more than you do right now. You’ll need a strong bond with your child to make this go smoothly. Why? Your child needs emotional touchstones, and you need to make yourself the strongest touchstone you can during this time so that the transition is easier. It is at least somewhat likely that your child sees your current home as a touchstone, and it’ll be very hard for your child to separate, so you need to provide another rock for your child to lean on.

Spend some evenings at the park or out and about in the community doing things together, just you and your family. You can spend some evenings at home, of course, but don’t spend all of them there – try to cement that bond with your child independent of location.

Second, I’d cement the concept of a home as something you buy and sell. Point out where other houses are for sale and explain that someone is trying to sell that house. If you see a “SOLD” sign, point out that someone has bought that house from someone else that’s trying to sell it.

This firms up the idea that it’s a normal thing for people to buy and sell their houses. Be candid about it and answer the questions that your child might have. Given Peggy’s timeframe, I’d try to do this several times in the next few days.

Third, I’d use some candor to explain the situation to the child. Simply tell the child that the family needs to live in a smaller house because the house they live in now is too expensive. They don’t have enough money to keep paying for that house. Do it in a caring way – a serious talk, but without overwhelming emotion and no aggression at all.

Your child is going to have questions. Answer them as simply as you can. You don’t have to get into the nuances of ARMs. Just say that we got to make little payments on the house at first, but now the payments are bigger and we have to choose between things to spend our money on. My two year old could largely understand this and several other parents have assured me that their seven, eight, and nine year olds could get it, too.

Finally, make the changing experience seem as fun as you can. Get your child involved in packing things up. Take pictures of box contents together for easier packaging. Be there for your child if your child has a hard time with this – the child might or might not get upset during the process.

The most important thing is to be there for your child. You are that child’s constant through this difficult time of change. Take that very seriously, because your child will probably really need that emotional safety at this time.

The post Talking to a Child About Home Foreclosure appeared first on The Simple Dollar.

During the conversation, we talked about my father’s health. He’s in his mid-sixties and still in pretty good shape, but he’s lost a step or two from when I was a kid. He’s still incredibly active, but he can’t spend a whole day cutting firewood like we would do when I was a kid.

Another interesting aspect of the conversation is that since I’ve moved into parenthood, clearly establishing my own family, my parents have opened up to me about things that they previously didn’t talk about. My parents have revealed to me some minor health scares over the last few years – things they would have never told me about when I was younger. Thankfully, they’re both doing completely fine right now, but those little scares really make clear one fact.

My parents are starting to get old.

In a lot of ways, it’s hard for me to take. I think of my early childhood, when my father was in his thirties and my mother was in her twenties. I remember when I was about ten or eleven and my father would come out in the driveway, pull off his shirt, and we’d play basketball. I remember my mother rolling out of bed in the morning and not slowing down until she fell in bed in the evening, raising kids, canning vegetables, doing laundry, and countless other things. I remember when it seemed like my parents’ house was always full of kids – not just me and my brothers, but countless neighbors and other people. My parents were basically surrogate parents of a lot of kids that lived near us.

Now, it’s just the two of them. My father’s beard has turned white, as has my mother’s hair. They’re both retired and living on Social Security and a pension.

And when I see them, I realize something has happened. We’re moving from the time where they took care of me to the time when I should help take care of them.

But what does that really mean? What kind of help should I provide for my parents? What kind of help do they actually need? What does their situation really look like? Would they be happy if I took an interest, or would they not like it at all?

I know I certainly wonder about these questions, and I have for quite a while. I’ve read through It Pays to Talk multiple times along with countless other articles and materials on the issue, reflecting not only on how to talk to my own parents, but how others can talk to their parents about these issues. Here are the key tactics I’ve found for making it work.

Know where you stand
Before you even think about addressing such a conversation with your parents, spend some time really understanding exactly what you want out of this. Are you authentically expecting a piece of the estate? Will you be authentically hurt if your parents are in a lot of debt that they didn’t tell you about? Why? What if they are making unexpected choices with their estate, like leaving more to one child than another or leaving most of their money to an organization you don’t agree with? How does that make you feel? Would these things make you angry?

At an earlier point in my life, I was often frustrated when I thought about such things. It took me a while to really realize that these choices are my parents’ choices, and theirs alone. My role should just be to help them and to make sure that their wishes and choices are carried out just as they wish. If you still harbor strongly-held opinions on what you think they should be doing (not in terms of specifics, but in general direction), you’ll likely have a difficult time having a constructive conversation. Spend some time reflecting carefully on it and don’t move forward with a discussion until you can do so with a clear mind, a clean conscience, and a clean heart.

Be straightforward and thoroughly honest
Usually, such a talk with your parents isn’t a path you’ll take unless you’re harboring some concerns. You are far better off clearly stating those concerns right up front, as clearly as you can. Say exactly what’s in your mind and in your heart, even if it’s not a comfortable thing to say. If you’re worried about how they’ll pay for their retirement years, say so. If you’re worried about what they expect of you in those years, say so. If you’re worried about whether they’re in a situation where they’ll have to work forever, say so. If you’re worried about their estate planning and whether or not it’s in place at all or whether it actually reflects what they want, say so.

You are a concerned child. You love your parents and you want their final years to be as good as possible. You also want to make sure that their wishes are carried out in the event of their demise. Speak from the heart and make it clear that you love them, care for them, and want these things to happen for them.

Get appropriate people involved
This need not be just a talk between you alone and your parents. You may want to get some or all of your siblings involved with this process as well and perhaps other family friends or relatives involved. Don’t just view this as a situation between you and your parents, because it’s bigger than that – it’s about helping your parents plan their future.

If you’re involving siblings and other members, you may want to talk with them first and suggest that they read this article. They should also be on the side of helping your parents come up with strong and sensible plans for their later years.

Remember, though, that you don’t have to involve others. There may be good reason to just make this a conversation between just you and your parents. Just don’t immediately exclude people when you consider it.

Choose a pleasant and comfortable environment
You should choose an environment and situation for such conversations that makes everyone feel as comfortable as possible. If your parents are still living in the house you grew up in, this is probably the best choice. Make sure everyone involved as some basic amenities available to them – good coffee or other beverages, a simple snack, and so forth. If the place needs straightening up, do it in advance before talking.

The point is to do everything you can to maximize everyone’s comfort level. This discussion is likely to push some comfort zones a bit, so you should take every effort to reduce any other potential intrusions on comfort as well as provide little touches that help reduce inhibitions and raise everyone’s comfort. You’re much more likely to have everyone involve express some candor if everyone feels as comfortable as possible in the situation.

Check your ego (and temper) at the door
It can be tempting to believe that you know the best solution for your parents and that any talk you have about the situation should just be a matter of you telling them what they should do. That’s ego, and it should not be a part of this conversation. Similarly, you may find yourself getting angry at your parents because they aren’t following the same logical path that you would follow. That’s anger, and it shouldn’t be a part of this conversation, either.

Your role here is to be assistance for them unless they ask you to be more than that. You should have your own ideas, of course, but that does not mean your parents should immediately jump on board and follow those ideas. If you find yourself getting angry or frustrated, take a break. Excuse yourself, go to the bathroom, and just sit there for a minute and collect yourself. Remember that these are not your choices. You’re merely trying to help your parents make their own choices.

Ask what they want, not what you want
In many families, there are going to be family political angles to this talk. You might view this situation as competition with your siblings for some share of the estate or perhaps you view this as an opportunity to keep some undeserving child out of the picture.

Don’t. If you go in there with this attitude, you’re focused only on what you want. Such thoughts and goals aren’t about your parents, they’re about you. The purpose of having a talk with your parents about their situation is to help them, not help you. Ask what they want, and abide by it. Don’t tell them what they want – because, likely, that’s what you want – and they’ll know it.

Open the books together
If your parents are in a deep debt situation, they may want to just tell you what the situation is and not show you. The real truth lies in the numbers and raw facts of the situation, and you can’t actually help them without knowing the truth of their situation.

If you find yourself in this situation, suggest that you walk through all of the information together – in fact, this is always a good policy to follow. If they refuse, then you should not give them further advice, since you’d be offering ideas and suggestions based on incorrect information. You can talk about issues such as estate planning, but in terms of helping them or offering help, you can’t make a fair or reasonable offer or suggestion with incorrect or false information as a basis. Tell them that you would love to help them, but you don’t want to mislead them along the way, and leave it at that. They may choose to come around later, but that’s out of your control.

Remember, giving advice based on false data is giving extremely bad advice. You may be driven to help, but giving them advice when you suspect that the underlying information is wrong doesn’t help – it hurts. If you find yourself here, back away in the most pleasant way you can.

Look at what they’ll realistically need at retirement and after
Good topics to cover: their current budget, their current retirement savings, their target retirement date, how they’re saving for retirement, their budget after retirement, and their insurance coverage (especially health insurance and long term care insurance). These together will provide plenty of food for thought for all of you.

Be very clear on their post-retirement plans. Many parents harbor a plan to eventually live with their children, while other parents don’t have any plan at all beyond not wanting to be a bother to you. Encourage them to think about what exactly they want to do when they retire. Do they want to continue to live in their home, or do they want to downsize? What about their later years – are they planning for nursing home care? These are hard questions, but they need to be out there on the table.

Be clear about your role and how you’re willing to help – don’t waffle
Make it very clear what things you’re willing to offer to make the lives of your parents easier in their later years. If you’re open to them moving in with you, say so. If you’re able to provide some regular financial support, say so. If you’re willing to do the detail work of all of their planning, say so. Be very clear about what you can and can’t do to help them.

They may take you up on certain pieces of your offer and not others – and that’s fine. Be open to their needs and ready to help with what they want.

Walk through the necessary estate planning questions
Ask about life insurance. Ask about a will or a living trust. Clarify who the executors and/or trustees on such documents should be. Clarify where the property should be assigned to. Talk about a master information document.

Even more important, if your parents don’t have any of these, offer to help them through the process of setting it up. Quite often, people want to have such things, but they put it off because it seems like a lot of work. Having someone on hand to help you through it makes the process seem more manageable.

Offer, don’t push
When you’re talking, you’re going to have ideas and recommendations for your parents. You might even know the thing they should be doing. Don’t push. Go through the options and add what you would do, but don’t tell them which path to take. Let them make the decision.

You might find that they lean towards a different option than you’d like. Don’t fight them on it, even if you view the choice as not realistic. Instead, be consoled by the fact that they are in fact looking at the situation and making decisions and that you are aware of what those choices actually are. You can then move forward on supporting them in that choice.

Do something pleasant and unrelated afterwards
I’ve found that every time in which I’ve had to have a serious discussion with a friend or a family member on something like this, it’s been helpful to do something very pleasant and unrelated afterwards – like a family meal, for example. Don’t just walk out of the door at the end of the planning – instead, cement the bond you already share.

Follow up
Remember that this is just the first step in a long conversation. Don’t let the progress you’ve made falter. Follow up on the things you’ve pledged to do, and let your parents know that you’re concerned and are thinking about things as well. This is a process, not a one-time thing, and you need to follow up.

Good luck, especially if you’re like me and this topic has been on your mind for a while.

The post Opening the Door to Helping Your Parents appeared first on The Simple Dollar.

As a parent, I can understand the superficial appeal of having a massively over-the-top birthday party like this for my children. It would be incredibly fun to load up house and home with parents and children, make it a very fun day for everyone with little eye toward expense, and have an amazing present at the end that all of the kids would enjoy. The sheer joy of all of those children would be quite wonderful.

But it comes with a few steep prices.

First, it sets unrealistic expectations for your children. Unless you’re equipped to spend obscene amounts of money regularly, you’ve set them up to be disappointed on some level by future birthdays. It’s fun to have a birthday party, but when it stretches the limits of what’s reasonable (and what you can reasonably afford), then it begins to stretch their expectations, often to a threshold that you won’t be able to afford in the future.

Second, it encourages consumerism. A giant birthday party with a mountain of presents is a rush of acquisition of “stuff.” No matter how well thought out the gifts are, a huge pile of gifts translates to a huge pile of stuff, and a huge pile of stuff translates into an expectation of more stuff.

Third, a big investment in a birthday party is a big investment that’s not going towards college or other long term savings. This isn’t a big deal if you’re a multimillionaire that already has college in the bag, but it’s a huge deal if you’re not there. If you drop thousands of dollars now on a party or a toy that they’ll only play with for a little while and at the same time haven’t adequately covered that child’s future, you’re making a choice that puts their future at risk for a birthday party.

With those ideas in mind, here are some suggestions for planning a memorable (but reasonable) birthday party for your child without it transforming into an incredibly expensive spectacle.

Keep the invitation list reasonable. While it’s fun to have a lot of kids in your yard, keep the list short enough so that all of the children are comfortable with and familiar with each other. This makes the party more fun for everyone and also keeps the expenses under control, as it’s easier to feed and entertain eight children than thirty.

Put a strict cap on gifts from guests – or request no gifts at all. This helps fight the “mountain of gifts” that is prevalent at large birthday parties, which just gives a home a plethora of toys and clutter that’s not necessary. Tell the guests not to bring presents at all – or, if you feel that they should, ask that the presents be very small.

Children can entertain themselves. Just come up with a few games that require minimal equipment and everything will go great. No need for an entertainer or any sort of expensive entertainment spectacle.

Cut back on the food – only serve cake. I’ve been to many birthday parties where there was a meal served, and as a guest I thought it was overkill. Keep it simple – just have a small, homemade birthday cake and a big bucket of ice cream. Total cost: less than $10.

Consider a slumber party. This enables you to dramatically reduce the guest list and at the same time create a memorable party for the child. Just invite three or four of the child’s closest friends and have them spend the night as the party.

Consider a private party. In other words, the only people invited are the people who live in the house. This keeps the party extremely simple, but also quite intimate. Many of my birthday parties as a child were like this and I remember them quite fondly.

Utilize public resources. Have a birthday party at the park, using the shelter house as a place to manage the party. This makes cleanup easy and the park is natural entertainment for the children.

Ask your child what they want – and don’t plant any ideas. You’ll often be surprised at what your child comes up with for what they want to do on their birthday. One of my nephews only wanted one thing for one of their early birthdays: to ride on their cousin’s four wheeler. Another one wanted to pull weeds out of the flower patch in the front yard and redecorate it (seriously). You might be shocked at what they want to do for their birthday, and if it’s reasonable at all, let them do it.

Remember that this party isn’t for you, it’s for the child. The party should revolve around what your child wants, not what you want. If your child wants to just have his best friend over for a sleepover and have hot dogs for supper, go for it even if it’s not what you’d envision for a birthday celebration. Let it be your child’s day, but just keep it within reason.

The post The Economics of Children’s Birthday Parties appeared first on The Simple Dollar.

And these meetings have become a big part of the financial glue of our marriage.

These conversations keep us on the same financial page and ensure that we both are open and clear about our goals, our dreams, our mistakes, our challenges, and our shared path in life. They let us constantly be a check against one another, making sure we both stick to our better behaviors and use each other as an inspiration for making good choices. If you’re in a long-term relationship with someone, I can’t possibly recommend a monthly financial meeting more highly.

What Our Meetings Look Like

Our meetings are really pretty simple. We go through any credit card statements and bill statements that we have, talk about any changes we should make, plan for anything that’s coming up, and set some goals for the next month, mostly along the lines of limiting unnecessary spending and deciding where our budget leftovers will go for the next month.

For the most part, we don’t need any sort of specific agenda or meeting time – we just do it every once in a while on roughly a monthly schedule. Some keys:

Everything is an open book. There should be absolutely no secrets in such a meeting. If your spouse wants to know about a specific spending choice, be completely open about it, not defensive. If you’re getting defensive, that means you have something to hide – and that means there’s a problem that needs to be addressed together.

Make goals a big part of the meeting. Not only big, long-term goals, but the shorter goals over the next month that will help you get there. Set goals together, even if the goals are very individual in nature. Then, throughout the month, offer each other encouragement. It’s hard to break a bad spending habit or to make new financial choices – use the motivation of goals and the constant encouragement of a loving partner to make the changes easier.

This is a great time to work on a simple budget together. Sit down and talk in detail about your spending plan for the coming month – and also where your challenges and successes were over the last month. This discussion can provide a lot of insight into where you’re going – and where you’ve been – and that information together can help you to make better financial choices.

Love and respect each other, even if you have differences of opinion. Money brings about strong feelings – don’t let these strong feelings overshadow the more important things in life. One good way to do this is to hold your partner’s hand during the meeting.

Involving the Kids

I am a big advocate of involving children in these meetings as early as possible, by age seven at the latest. Allow them to bring their own financial picture to the table – pay them an allowance, have them budget the money, and have them talk about their own successes. Here are some thoughts on how to incorporate kids into this picture.

Keep the open book philosophy. Everything should still be wide open so that your kids can see the financial reality of being adults. They need to know how much you’re spending each month to keep the roof over their head and the food on the table – as well as giving an idea of all of the little expenses that eat away at the big pile of money.

What about privacy? Many parents like to hide behind a veil of privacy, saying that it’s none of their children’s business how they spend their money. My argument against that is twofold: first, it makes a great educational opportunity for your kids impossible and second, it says that there’s something in your spending that you’re ashamed of. If there’s shame, that means that there’s something you personally need to improve in your life.

Naturally, I see no problem eliminating a few items with black highlighter in order to hide an upcoming gift or something, but if you’re sealing away most of your spending from your children, they’re missing out on a big learning opportunity.

Let them offer input towards goals – and have them set their own. When you’re making large financial choices, let them have a voice in the decision, but don’t let them run the show, either. Where you should allow them a lot of control is in setting their own goals, both over the long term and over the next month. Help them identify good things to save for and encourage them to work towards those goals. This goes hand in hand with the idea of splitting an allowance into pieces for spending now, sharing with others, and saving for later – in effect, budgeting for kids.

Make some of the economic choices you have available to them. This is a concept heavily advocated by David Owen’s excellent book The First National Bank of Dad. In it, Owen advocates that you should create a “virtual” bank for your kids with a very high interest rate – say, 5% a month – to teach them the value of saving very early. In other words, let’s say they have $20. They have the choice of putting that $20 in the “First National Bank of Dad” where it will earn $1 in interest every month, or they can spend it immediately. All they have to do to earn that $1 each month is simply not spend it. It’s a real choice for a young child and it introduces them to the dilemma of saving versus spending – and offers plenty of encouragement to make the “good” choice.

In The End…
At its core, the idea of a monthly money meeting is really all about communication. The more we talk about money with our family and the more we encourage each other to make good choices, the more likely we are to make good choices over the long haul. Even better, it’s a splendid opportunity to use ourselves as examples for our children, teaching them how to be financially responsible adults.

The post Holding a Monthly Family Financial Meeting … And How It Can Benefit Your Marriage and Educate Your Children appeared first on The Simple Dollar.

My grandmother is far too caring of a person to allow one of her children to be out on the street, so she allows him to live with her and has likely agreed to leave her home to him when she passes on.

The end result of this situation is that there are two adults living on a small pension and one person’s Social Security benefits. This worries me and makes me sad on a daily basis – I think about her and really wish there were a way I could help her with her situation. The only problem is that if I do financially assist her, that assistance will translate directly into spending money for her son, who I don’t really want to help because of how he’s draining away my grandmother’s golden years.

A big part of me wants to intrude in this situation. I want to somehow be able to storm in the door and somehow make everything all right for my grandmother.

In the end, though, this intrusion would serve no real purpose. She’s a grown woman with a caring heart who has the power to make her own choices, and she chooses to spend her extra money taking care of her son. It has very little to do with how I feel about it – it’s really her choice, not mine.

I hear often from readers who are faced with a similar situation in their own lives. They see a financial mess in the life of someone they care about and they desperately want to intrude in it. Much of the time, I feel like they’re writing to me for “permission” – some sort of approval of their intrusion.

My reaction is pretty much always the same: don’t intrude unless it directly affects you and even then, only intrude in business to the extent that you need to to protect yourself. Don’t stick your nose into someone else’s business – all you’ll do is create resentment and almost always you’ll fail to solve the problem you wish to address. Often, you’ll make the problem worse.

Instead, just let the people you care about know that you’ll help them if they need it, in the form of advice or financial assistance or whatever the situation calls for. Sit down with just that person (or persons), let them know that you care for them, and let them know that you want to help them specifically, but don’t push them. Let them make the choice – it is their life, after all.

Of course, some situations demand that you protect yourself, and you should always take any measures you feel are necessary to protect yourself. Just make sure that everyone involved in that protection is on the same page – that means, if you’re married, talk over such decisions with your spouse.

As for my grandmother, I talk to her on the phone every week and I’ve had a few conversations with just her about her situation, just letting her know that if she ever needs anything at all, I’m just a phone call away and I’ll help her in any way that I can. But I won’t make her pick up that phone – it’s her life to lead and her choices to make, even if I don’t agree with the choices.

The post Personal Finance and Intrusion appeared first on The Simple Dollar.

On a very regular basis, I give cash gifts to people I trust who need them or could, at the very least, use them. I take this out of money that I have and just give it to people that could use it. I’ll give some cash to a relative to help that person cover their power bill. This is something that’s common and normal to me.

When I do this, I am pretty picky about who I give the cash to, but if they’re someone I trust personally, I don’t hesitate to do it. If I found out my grandmother was having difficulty keeping her house, I’d be right there with a check in hand to help her. If one of my cousins that I trust was trying to start a business and needed some seed money, a check would be in the mail in a heartbeat. I almost always do this without asking, and I don’t expect a dime back from them.

Why do I do this? I don’t need any sort of written agreement to know that if I needed something, these people I trust would be there for me. When those people are in a pinch, I will help them, no questions asked. When those people are trying to reach for a dream, I will try to boost them if I can.

To me, personal trust and personal relationships like these are more valuable than money. I can’t possibly put a cash value on knowing that if I lost my home, my family, my children, my job – everything – there are people who would take me in and care for me. I was able to make the leap to being a full time writer because of the support and trust and help given to me by family and friends. I rely on this – it’s an integral part of who I am.

Here’s another way to think about it, through the eyes of charities. I tend to not donate to charities unless I know them well. I need to either be intimately involved myself or have someone I deeply trust be involved before I’ll donate. When I do build that trust, though, I’ll write checks to those charities without even thinking. I’ll evangelize for those charities. I’ll do what I can to help them, because I trust them. I don’t worry any more about whether my check is really helping – I trust the charity, so I don’t worry about it. I don’t worry about what I’ll get out of it – I just trust that they’re doing the right thing for something I care about.

Quite often, I assume the same kinds of dynamics in other families and friendships – and I did so to my own detriment earlier. My response to a reader question about what to do with extra cash was to give it away to a trusted family member or a trusted friend, which is exactly what I would do. I’d look for someone I trusted and use that money to seed something they wanted to do, and I’d be very liberal about it.

My response, which basically just assumed much of this, said to give the cash to a trusted family member and then that family member would probably help with college. I also suggested that giving this money away – because it would provide the added kicker of helping with one’s financial aid case, might be unethical to some, but I considered it completely fair because it’s within the rules – nowhere does it outlaw giving away your money. I did not advocate sheltering money – that’s against the rules entirely.

This was met with instant derision that I was advocating truly cheating the system, and looking back on it, I can see where the outrage came from. The outrage comes from the sense that you should never trust anyone when it comes to money, and that’s a sensible and safe philosophy to live by. The only drawback is that you limit yourself in how much you can trust others, and that cuts you off from some things. Is that a good thing or a bad thing? It’s a personal call each person has to make.

A reader asked me:

Let’s turn the tables. If you randomly received a check for $10,000 in the mail from a relative with no note, what would you do with it? What do you think they would want you do to with it?

I’d probably call them up and ask them why they sent it. If they said, “It’s help for you getting started with your writing career” or something like that, I’d give a big “thank you” and put it in the bank. I can think of a lot of other reasons why I’d just happily accept the gift, and they’re mostly borne out of trust and long-term trusting relationships with people.

Honestly, I wouldn’t really question the gift very much, and this in itself is a demonstration of what I’m talking about.

Furthermore, I’m planning already to give my nieces and nephews some gifted financial help when they go to college. I have no obligation to do so. But their parents have helped me a lot during my young adult life.

Should that be reported on the FAFSA? I think it’s ridiculous to think so. There was no implication whatsoever that any help my brother or sister-in-law gave me, in the form of gifts or personal help or advice, was to be repaid in the form of some assistance to their children. If they had a windfall and mailed me a check right now without a note, I’d still not think of it as any sort of implication that I should assist their children with college.

This all translates directly to my advice to the earlier family. In essence, giving that money to Uncle Phil is just another kind of investment. It’s an investment in people, in trust, in a bond that can’t be quoted in dollars. If you give that money to Phil when he has a good use for it, you’ve probably cemented a bond with someone who will help you in countless ways throughout your life, in ways you see now and ways you don’t, in ways you can measure in dollars and cents and ways you can’t.

From my perspective, trust is about helping people you care for because you can and because you want to, not because you’re obligated to.

If this kind of trust seems alien to you, then you’re not alone. There are a lot of people out there who are guarded, and it’s usually because they’ve been bitten after trusting someone, or they’ve heard too many stories about trust falling apart. They call such trust “naive” or “foolish” – and maybe it is.

But when I go back to my hometown and spend an evening around people I trust that deeply, I realize I wouldn’t trade that sense of trust for anything in the world. It’s that valuable, if you can find it.

So what did I learn? First, I learned that assuming things about the relationships between others can usually get you into hot water. I assumed far too much about the trust in relationships in this family, and because of that, I gave advice that was probably not the best advice to give. I gave advice from my own heart, based on what I would do in that situation – if I had money that I was trying to get rid of in order to get in a better state for financial aid, the first place I’d look is my family, the people that I trust. In a family without that trust, my advice was horribly bad – it either implies an illegal financial agreement or it suggests just tossing your money into the breeze and watching it fly away. Trust makes all the difference, and I assumed too much of it.

Second, I learned that when you give money to others, the worst-case scenario is usually assumed by others. If I give some money to my uncle or my cousin, it’s reasonable to think that others are assuming I’m doing it for personal gain over the long haul, that I must be expecting to be paid back in some fashion. That’s not how I view the world, and viewing it that way takes a big stretch for me.

I’ve explained how I view trust, and how that view can skew things. How do you view trust? How deep does it go? How much value does it have for you? Have you ever been hurt by trusting too much? Have you ever been helped by relying on a trusting relationship?

The post The Value of Personal Trust appeared first on The Simple Dollar.