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Life Events, Strategies to Save

Allowance: What Kids Expect Today

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Creating ‘chores’ and an allowance system at home can be difficult to establish. You don’t want to set your child’s expectations too high, but you want him or her to know that the help is appreciated. Depending on your child’s age and abilities, their allowance, or reward, should vary. For example, toddler “chores” such as helping to set the table or picking up toys can easily be rewarded with boisterous rounds of clapping and a little bit of cuddling; this love and appreciation is many times reward enough for them. But, as any parent knows, this stage doesn’t last forever, and (much) sooner than later children expect financial compensation for household duties. Most of us grew up earning a weekly allowance of some sort…typically an amount so miniscule that it MIGHT have be enough for an ice cream cone.  But what do kids today expect their weekly at-home-paycheck look like?

Truly, what your family decides as a reasonable compensation in the form of allowances is based on an agreement between parents coupled with a structured system designed to reward work done around the house. While there’s a general idea of what an allowance should be, in the end it’s up to you – the parents – to decide what’s best for your family. Here are a three things to consider when setting up allowances to reflect what kids expect today:

1. Timing

Kids don’t expect an allowance, that is, until their friends start getting them. Once your child’s friends are bringing in their own income, your child will start asking “Where’s the money at?”. With that being said, tailor your starting time for allowances based on when you think your child understands the nature of ‘bartering’. For instance, if your toddler doesn’t quite understand a statement like, “We can have dessert if you eat your dinner,” then it might be too early to truly hit home the idea of payment for chores.

In general, it’s best to start as soon as your child starts to ask about money – and this time period typically falls in preschool year ranges, as that’s when they’re sizing up other kids to see what’s ‘normal’. Preschool children tend to be able to understand the differences between ‘wants’ and ‘needs’ as well, and this marks a great time for starting allowances and teaching the value of a dollar.

2. How Much to Give

This aspect tends to differ the most between families. Take into consideration the following:

  1. What chores is your child responsible for?
  2. What is a reasonable compensation for the chores?

Whatever you do, don’t try to “keep up with Jones’”. You don’t want to lead your kid towards an overly-spoiled lifestyle.

Kids today expect an allowance that reflects their age. Standards today utilize a formula of $.50 – $1 for every year of your child’s age on a weekly or bi-weekly basis. For instance, a 3-year-old would start with $3/week. As your child ages, their expectations tend to increase exponentially. Take the opportunity around age 10 to heap on the responsibilities that they crave and compensate them accordingly.

Consider the idea that you want to teach your child good saving and spending habits. Give your child enough money to fulfill some of their smaller ‘wants,’ but not so much that they don’t have to save for the larger desires.

3. It’s More than Simply Forking Over Money

Start with solid rules and methods right from the get-go. Expect your child’s assigned tasks to be completed (CORRECTLY) in order to earn their allowance in full, and stay firm in your conviction. Kids expect allowances, but they also expect that they’ll have to earn it, so make sure that you foster that belief and make it a permanent rule within the house.

You have the perfect opportunity for a ‘teaching moment’, so make the most of it while you can! When you give your child their allowance, consider splitting it into three pots: save, spend, give. In this way, you’ll help to teach your child about how to delegate their funds the same way that an adult would. Allowances are an instructional tool, and if you’re simply forking over money on a weekly basis without enforcement or follow-up, then you’re likely missing out on some key teaching moments for your child.

Get Your Kids Involved in Family Decisions

Children are generally capable of more than we give them credit for, and allowances give parents a way to reward their kid for doing responsibilities that they crave. Involving your children in some of your family financial decisions (like how you delegate money for groceries, for instance) can also help them learn how to save their money for what’s important and necessary. This helps to connect their current situation to the future and it fosters their independent decision-making skills with their own allowances. Remember, in just a few years, they’ll be making financial decisions that dip into the thousands of dollars for college, housing, and even weddings. But it all starts with a few dollars, some chores at home, and the freedom to experiment with allowances.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Stephanie Mialki
Stephanie Mialki |

Stephanie Mialki is a writer at MagnifyMoney. You can email Stephanie at stephanie@magnifymoney.com

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Strategies to Save

When Is It Okay To Tap My Savings?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Most personal finance advice preaches the gospel of saving, admonishing you to resist the temptations of restaurant meals, shopping sprees and other extravagant expenses. Sock away as much money as you can bear in some sort of savings product, they write. Prepare for the worst!

Let us reassure you that all those nights you suffered from FOMO and dined on leftovers were worth it. We’ve assembled a panel of expert financial planners to weigh in on when and why you should tap your savings, and how to do so intelligently, without derailing your plan for financial security.

You just lost your job

“Short-term, emergency savings are perfect for using when a need arises, but should really only be used in true emergencies such as a job loss,” said Jason Speciner, CFP at Financial Planning Fort Collins based in Fort Collins, Col. And while a week or two of “funemployment” may sound appealing at first, that hoard of pelts you collected in Red Dead Redemption 2 won’t go far with the landlord or your creditors.

Common sense dictates you should cut back whatever expenses you can while you’re in between jobs, but depending on how you lost your job, you may not have to rely completely on your savings to keep you afloat.

Collecting unemployment benefits

If you’ve recently lost your job, you may be eligible to collect unemployment benefits through the joint federal-state unemployment insurance program. The particulars of who can collect unemployment varies from state to state, but in general you must meet the following criteria:

  • You are unemployed through no fault of your own. (The exact definition of which depends on the state, but if you were perhaps fired for showing up to work inebriated, you shouldn’t count on collecting unemployment).
  • You worked a certain amount of time as required by the state to be eligible for unemployment, usually the first four out of the last five calendar quarters prior to the time you file for unemployment. In other words, you will have needed to be working full time for at least a year in most states.

You’ll have to apply for unemployment with your state’s unemployment insurance agency, either in person, over the phone or online. When you do so, make sure you have information such as the dates you worked for the employer, how many hours you worked, and other important details.

Check out this list of links to state unemployment insurance agencies, and also see MagnifyMoney’s detailed guide to filing for unemployment to help ensure you get all of the financial assistance to which you’re entitled.

You just got hit with a huge medical expense

Sometimes an illness or injury can take a greater toll on your financial health than on your body. A recent Kaiser Family Foundation poll found 67% of the country lists unexpected medical bills as their biggest worry when it comes to paying for healthcare, and given the thousands of dollars of debt you can rack up with even a single visit to the hospital, it’s easy to understand why.

“Life happens, and these types of expenses are why financial planners are always adamant about establishing an emergency fund,” said Rick Vazza, CFA at Driven Wealth Management in San Diego, Calif. “Without one, the cost would normally be covered by credit, and if the credit on a large expense can’t be paid off immediately, the interest charges can be significant.”

If your health insurance doesn’t cover enough of the costs to protect you from a bill you can’t afford (or you aren’t fortunate enough to have insurance in the first place), you still have some options before charging that medical bill to a credit card and potentially setting yourself up for years of debt.

How to knock down hospital bills

Getting a hefty bill from the hospital can be enough to send you in a panic, but you should avail yourself of every opportunity to lower the amount you owe before forking over a payment. In general you can:

  • Contact the hospital’s billing department and ask about its bill reduction or forgiveness policies — this will depend on the individual hospital, but depending on your income level and the particulares of your situation, you may qualify for a reduced bill.
  • Offer to pay the hospital in cash (or using a flexible spending account) — sometimes hospitals and other medical facilities will give you a discount if you’re willing to settle the bill right then and there.
  • Charge the bill to a 0% APR credit card — assuming you can qualify for one of these cards, it’s important to remember that the 0% interest only holds for a limited amount of time, so if you’re unable to pay off the money you charge to the card before the time is up, you’ll be stuck making interest payments.

Find out more by consulting our guide on how to get your hospital bill reduced and minimize the drain on your savings.

A major appliance breaks

You don’t want to get in the habit of leaning on your savings to purchase big-ticket items you could do without. But sometimes things fall apart, and if your furnace went on the fritz, you wouldn’t want to wait until your next paycheck to restore heat in your home. You could always charge the repair (or replacement) on a credit card, but make sure you’ll be able to pay off the balance by your next billing cycle if you want to avoid interest payments.

“A good rule of thumb is to dip into the emergency fund whenever the alternative would require carrying a credit card balance to pay for the irregular expense,” said Vazza.

Building a budget for repairs

One way to help soften the blow of dipping into your savings to replace a major appliance is by having a well-planned budget that includes money for such incidentals. Ditch your pen and paper, and try one the many budgeting apps available to help you track your money.

Making a budget means taking a long, hard look at how you spend and save money, which is why it’s often so unpleasant. To begin, you’ll need to determine a few facts such as:

  • How much money you take home every month.
  • How much you spend every month, both on necessities such as rent or mortgage, and luxuries like eating out, entertainment and shopping.
  • How much money you want to save monthly — not only for retirement and long-term financial goals, but also for incidentals such as major appliance repairs.

Learn more about how to use these apps and set up your first budget at MagnifyMoney’s ultimate guide to budgeting.

You need to seize a once-in-a-lifetime opportunity

Dipping into savings to seize an opportunity is more open to interpretation than the other items listed above — is it worth taking money out of your account to invest in your brother-in-law’s dating app idea? But at the end of the day this is your money (and your life), so only you can decide if an opportunity is worth spending the cash.

Consider taking a loan

Depending on the opportunity, you might find a personal loan from a bank can help you cover expenses along with dipping into your savings. Lenders (both traditional banks and online financial institutions) offer plenty of loans to help you out with the associated costs.

Of course, not even the most lenient lenders just hand out sums of money to anyone, and if you find one that does, you should run in the opposite direction — it’s probably a deal too good to be true. Some other things to keep in mind when applying for a loan are:

  • Your credit score, which sums up how big of a risk you are to lenders considering giving you a loan. The higher this score, the more dependable you look to lenders which gives you access to better loan terms such as lower interest payments.
  • The interest rate charged by lenders. This varies depending on the type of loan — personal loans, which usually aren’t backed by any sort of collateral, tend to charge higher interest rates.
  • Is there an origination fee? Some personal loans charge a fee based on a percentage of the total loan amount that must be paid upfront. For example, a $35,000 personal loan with an origination fee of 5% would mean you need to pay a $1,500 origination fee.

Read our guide to find out more about the ins and outs of navigating a personal loan.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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Strategies to Save

Five Easy DIY Repairs That Can Save You Money

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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If you’ve always relied on your landlord or a contractor to fix things in your home, you may be tempted to just pull out your phone the next time something breaks. But as many seasoned homeowners will tell you, it’s not always worth dialing a professional — especially if you’re dealing with a simple fix that almost anyone (even you) can master.

Not only are contractors sometimes hard to book for smaller jobs, but their costs can add up quickly, experts say. “It’s often pretty expensive to have somebody come and fix something that you might be able to fix really easily with an inexpensive part,” said Don Vandervort, founder of the home improvement site HomeTips.com.

It can also be empowering to tackle a job yourself, says Danny Lipford, host of the home improvement show “Today’s Homeowner.”

Just be prepared for some surprises — especially if you’re a first-time fixer upper.

“Keep a sense of humor,” says Los Angeles resident John Morell. When Morell decided to install wood floors in his home, he underestimated just how tricky the job would be to finish. It took him twice the amount of time that he expected, and he made a number of mistakes. But he doesn’t regret trying, he says — “It came out great.”

5 easy DIY repairs

If you don’t have a lot of experience wielding power tools or taking things apart, try to stick with smaller projects and work your way up, Vandervort said.

There’s no shortage of relatively simple projects that you’ll likely be able to do yourself. Most will take just a fraction of the time it would take for you to call and then wait for a professional. For example, some projects that you could take on now before working your way up to bigger jobs include:

Fixing a leaking faucet

Cost to hire a professional: $200 or more, according to HomeWyse.
Cost to do it yourself: As little as $2.48 to $30 or more, depending on the parts you need.

This classic home repair project often just requires a screwdriver, pliers, a wrench and some basic know-how to complete. Before you call a plumber, look for some step-by-step instructions and try fixing the problem yourself. “Taking apart a bathtub or shower valve that’s defective or a kitchen sink that’s dripping or not working properly — those are some pretty easy repairs,” Vandervort said. “They usually involve taking the handle off and opening up the body of the valve and replacing a washer or a cartridge inside the valve.”

You may need to purchase some individual parts, like a new O-ring or a faucet repair kit, but there’s a good chance you won’t have to spend more than $5 to $20.

“It depends on the make of the faucet,” Vandervort said. However, a lot of common faucet parts are available at home improvement stores. Just make sure you bring the parts with you when you go to buy a replacement, he adds; that way, you don’t accidentally buy one that doesn’t fit. “That’s the case with parts of almost anything you’re fixing,” he says.

Rescuing a jammed up garbage disposal

Cost to hire a professional: $200 or more, according to HomeWyse
Cost to do it yourself: Potentially $0 if you held onto your disposal wrench; less than $5 if you need a new L-shaped wrench

According to Vandervort, a malfunctioning garbage disposal is another common household problem that’s often relatively easy to fix. Often, people don’t realize that reviving a locked garbage disposal can sometimes be as easy as pressing a reset button at the bottom of the disposal, he says.

You may also be able to unclog it with the help of the L-shaped hex wrench that came with your appliance. “You stick this hex wrench into the bottom hub, you crank it and it breaks free whatever you have in the garbage disposal,” Vandervort said.

Replacing broken or dated hardware

Cost to hire a professional: $65 to $200 or more, according to HomeWyse
Cost to do it yourself: $3 to $10 or more, depending on the part

These days, hardware parts are often so standardized that it’s relatively easy to find a replacement if you need one, says Lipford. Just make sure you carefully compare your old hardware to the new hardware that you’re considering purchasing, he says – especially if you’re trying to replace something that has a lot of parts that need to match, such as a cabinet hinge.

With the help of a screwdriver, you can swap out basic drawer knobs for something more stylish, or purchase new knobs for interior doors that aren’t closing properly.

“We had a few where the door would not latch,” said Stephanie Tilton, who runs the blog Dogwood DIY and has fixed up several houses. However, removing the old, defective doorknobs and replacing them with new ones was relatively simple, she says.

Working with hardware isn’t foolproof, though, so be careful. For example, New York City resident Ellen Sheng says her husband tried to fix a loose hinge on a bathroom cabinet by repositioning it and wound up botching the job so badly he later had to duct tape part of the cabinet. Now, she says it looks like Frankenstein. “I think he watched some YouTube videos and was like, ‘I’m just moving the hinge; how hard could it be?” Sheng said.

Repainting the interior or exterior of your home

Cost to hire a professional: $300 to $700 or more, depending on the job, according to HomeWyse.
Cost to do it yourself: Less than $50 for a smaller project.

One of the easiest, most cost-effective DIY repair jobs is to paint an area of your home that sorely needs a refresher, Lipford said. “There’s no better value that you can bring to something without almost no tools and limited skill than painting,” he said. “It could be painting your mailbox. It could be painting your front door, which is a significant return on your investment.”

You could even paint the sides of your home gradually over time, he says, rather than hire a painter to do it all at once.

Unlike other home improvement projects, painting is relatively low risk, Vandervort said. “You can easily correct any mistakes that you’ve made,” he said. “It’s not permanent and it gives you an opportunity to express your creativity and personality.”

Just be sure to follow some basic safety protocols before you pick up a brush, he says. For example, make sure you have a solid ladder and are comfortable using it if you plan to paint some hard to reach areas. Also be sure to test any paint from before 1978 for lead – especially if you plan to scrape the paint from older woodwork.

Fixing a drafty attic

Cost to hire a professional: $800 to $1,500 or more, according to HomeWyse
Cost to do it yourself: Around $145 to $500 or more, according to Home Advisor

Even repair jobs that seem big or intimidating can turn out to be relatively simple or rewarding. For example, Danny Lipford recommends adding insulation to your attic in order to save money on your next energy bill. “One of the least sexy home improvement projects you can do is putting insulation in your attic,” he said. But it can later make it much cheaper to heat and cool your home.

Installing insulation can come across as complicated, so you may be tempted to hire help rather than attempt it on your own. But if you have the time and energy, you can do it yourself, Lipford said.

You don’t necessarily need to do the whole attic at once, he adds. “You might just do one corner of the house,” he said. With every little bit that you do, “you immediately are getting money back.”

The bottom line

Tackling your own repair and home improvement projects can be a great way to save money and build your confidence as a homeowner. Starting out with small, low risk projects can also help give you the experience and foundation you need to move on to bigger jobs. “It gets you comfortable and more confident with using tools,” Vandervort said.

Just try not to get too overconfident right away. Some projects may seem like they’ll be easy, but they require far more skill and craftsmanship than you might realize, Lipford said. For example, you’ll find a number of YouTube videos and articles teaching you how to finish drywall. But even experts struggle to get the finish right.

“I’ve done drywall for 40 years,” he said. “I still can’t stand it. I still have problems with it all the time.”

There are also some projects that are just too dangerous to do yourself, such as fixing your home’s wiring, or are too risky to take on without the help of a professional. For example, if you attempt to sand your own wood floors, you could accidentally ruin them by sanding too far into the floor, Vandervort said. Similarly, a bad plumbing job can force you to go without water until it’s fixed.

“Avoid things where a high level of craftsmanship is important to the end result,” Vandervort said. “Craftmanship is something that becomes very visible in certain projects.”

If you’re not able to match an expert’s quality on something that’s highly visible, then you could come to regret trying to do it by yourself.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kelly Dilworth
Kelly Dilworth |

Kelly Dilworth is a writer at MagnifyMoney. You can email Kelly here

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