10 Lessons to Teach Your Kids About Money

Every Tuesday is Finance & Family Day at Zen Habits.

I’m only now learning habits that I wish I had when I was entering adulthood. I think I’m not alone here, but if I had these habits when I was young, I’d be pretty well off now.

Because of that, I plan to teach my kids about money, to give them the value of money, to teach them skills and habits that will get them off to a good start, and to have them learn by doing, and from my example.

Put Your Spending into Reverse Gear

Photo by pinkbelt

This is a guest post from Anne Truitt Zelenka of Web Worker Daily and a new food blog, The Everyday Cafe. Every Tuesday is Finance & Family Day at Zen Habits.

You don’t have to feel deprived when you spend less money. In fact, you can decrease your spending while being just about as happy as you are now. You just need to put your spending — and your hedonic treadmill — into reverse gear.

Spending more and more but never feeling any happier
Over time most people will raise their expectations as their income increases, resulting in little long-term change in happiness from income increases — that’s the so-called hedonic treadmill. “Hedonic” means “of or relating to happiness and pleasure” and a treadmill, well … you know what that is. You run and run and run and never get anywhere. Increases in income can be like that: your overall level of happiness doesn’t ever progress because you just get used to the new way of life.

7 Things You Can Do Today to Prepare for Retirement

Photo by pedrosimoes7

Every Tuesday is Finance & Family Day at Zen Habits.

Confession time: I didn’t start planning my retirement when I was young. I didn’t give it much thought, because when you’re in your 20s, retirement seems like something you can worry about much later.

Sure, you hear advice about how it’s much better to start early, and compound interest and all that — it makes sense, but it doesn’t seem as urgent as making that car payment.

Now in my mid-30s, though, retirement is a very real issue. I know it’s not too late to start planning, so just in the last couple of years I started seriously thinking about what I need to do, and how to get started.

The Cheapskate’s Bible: The Complete Tightwad Gazette

Every Tuesday is Finance & Family Day at Zen Habits.

When I wrote the Cheapskate Guide, I was writing about the frugality I’ve been striving toward for most of my adult life. And one of the inspirations for that frugality was the Tightwad Gazette, a frugality newsletter that was later compiled into The Complete Tightwad Gazette, by Amy Dacyczyn.

If you’re looking for tips for living frugal, it doesn’t get any more authoritative than this.

After my favorite book on frugal finances, Your Money or Your Life (read review), I’d say The Complete Tightwad Gazette is the second book any frugal person should read.

The Cheapskate Guide: 50 Tips for Frugal Living

Every Tuesday is Finance & Family Day at Zen Habits.

Confession time: I’m a cheapskate. Some would say frugal, which sounds much more positive, but in reality I can be a real cheapskate.

I am fairly frugal (though not always), but sometimes I take it too far: I have T-shirts with holes in them, I never buy new clothes, we’re shopping for a new couch because our current one has holes in it, and I ran my current pair of running shoes until the soles fell off.

However, I have gradually learned to be frugal in many ways that I would recommend to others. I don’t think you should have holes in your couch, and you should definitely replace your running shoes more often than I do, but there are many ways to cut back on spending and live a more frugal lifestyle.

Simple Finances: How and Why to Build Up a Cushion in the Bank

Photo by Todd Ehler

Every Tuesday is Finance & Family Day at Zen Habits.

Recently I began to do something in my bank account that would have been unthinkable to me a few years ago: build a (relatively large) cushion in my account, to allow myself to pay all my bills at the beginning of the month.

It makes more of a difference than you might think.

Building up a cushion in my bank account isn’t a complicated concept: instead of having just about exactly what I need to pay my bills (and transfer for savings), and then getting down close to $0 after all the payments are made and transfers completed, I decided to try to have a larger amount in the account, even after the bills are paid.

10 Ideas for Living a Life Without Credit or Debt

Every Tuesday is Finance & Family Day at Zen Habits.

My dad and I were talking about his recent financial turnaround, and one of the things he said was that he loves being free of debt.

My dad doesn’t have the best of credit, and he isn’t wealthy. He has a decent income, an old car that seems to run fine and doesn’t belong to a bank, no personal loans or mortgage (he rents), no credit card debt.

Being free of the burden of debt is liberating, he says. Of course, with his credit history, he can’t get a car loan on his own, or a mortgage, so life isn’t perfect. But I advised him: forget about borrowing money. Stay debt-free and frugal, and you can bank your income and live a credit-free life.