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Sunday, April 21, 2013

A Good Steward

I'm slowly going through major goals for Baby Sanchez and planning out how we intend to teach them.  

We've talked about our plan for baby being a polyglot and an avid reader.  Actually, maybe I haven't written enough about that second plan on here.  Maybe, I'll post more later.  This post, however, is about financial stewardship. 

 It is one in which my plan is not set.  I have so many ideas in my head and am not sure how to apply them.  Now, I am completely aware that this is not something I will be able to implement right away.  But, then again - I like having plans.  

CORE IDEA:  God owns everything. This is not our money.  This is God's money and it is our job to give and manage it wisely.  As part of our family, this is your job too.

** We earn money through hard work and honest innovation, then spend it the following ways.

1) HOME - Manage our own household first.
2) SHORT TERM SAVINGS - Manage your own future - because if there is no vision, people perish.
3) LONG TERM SAVINGS - Manage it for your family's future - because a good man leaves an inheritance to his children's children.
4) GIVING/CHURCH - Manage it for Evangalism and acts of mercy across the earth.

A) I want my child to have the opportunity to earn money through hard work and innovation.  
B) I want my child to practice managing it according to God's plan.

Well, I want to start it immediately.  I want it to be part of the way they live their lives from the very beginning.  This brings me to some questions.... 

What do I provide for my child and what are they responsible for providing for themselves?  I am going to refer to Maslow's hierarchy of needs for this.  Major areas of provision include:

1) Physiological Needs - health expenses, food and water, sleep
2) Safety Needs - security of body, employment, resources, morality, the family, health and property
3) Intimacy Needs- friendship, family, belonging
4) Esteem - self esteem, confidence, achievement, respect of others, respect by others
5) Self Actualization - morality, creativity, spontaneity, problem solving, lack of prejudice and acceptance of facts.

Looking at this list, we always want our children to have a safety net while living in our home, we simply want them to have enough skills to be able to create their own safety net when outside of the home.  This means taking on responsibility when still in the home.  

We are responsible for fulfilling all these needs for our children (or fostering them in the case of 2-5). this can be through outright provision or offering opportunities for them to make money to pay for it themselves.  

**I'm noticing that a lot of material things such as the latest toys, clothing styles or games are not on this list.  

The other thing to consider is savings.  How much money do you offer our child per week so that they can save for college or whatever aspiration they may have when they hit adulthood?  For categories 2-3 of stewardship (short term and long term savings).    

- Oscar and I would be happy to match their long term savings amount. 
- Grandparents may also be willing to match a percentage of their long term savings amount.  
** I hadn't thought of including grandparents in this before, but this could be HUGE and really help us out.  $1 a week from a grandparents is $52 a year!!  It would also help them get on board for the savings program, so they don't completely ignore it when the grandkids come to visit.

I think this answer is entirely dependent on the answer to the next one.  

Such a difficult question to answer.  If they want to go to college, current estimates for California are anywhere between $13,000 - $50,000 a year, depending on where you go.  This estimate includes housing and books, as well as tuition.  This could be anywhere from $52,000 - $200,000 total.  

But, do we need them to save up enough for all four years of college.  I worked Summers during high school and always had 2-3 jobs during college.  Oscar worked during high school summers and worked in an ongoing manner through college as well.  Furthermore, we both earned 6-7 scholarships.  AND I only went to school for two years for my undergrad.  It's kind of difficult to estimate, but since we wouldn't mind them working we can cut it to $100,000.  That will be $100 per week.  We currently quite a bit more than that, but overhead is low and it is honestly a recent addition to our life.  We meant many years not being able to save that much.  With God's will, I'm sure there will be opportunity.  I think we can try to do this, but this does change plans a bit.  We can't give a two year old $100 a week in commission pay.  It just doesn't work.  This is the flaw in my plan.  It's kind of a big flaw.  I want them to save their own money and earn their own money, but I also want them to hit our goals for them in savings.  

Hmmm.   I think I need to come back to this one. 

Baby's Job: have fun, play, feel safe, learn to self regulate and explore
Baby's Purchases: none
Parent's Purchases: All.
Savings: $100/week in savings from parents

Baby's Job: have fun, play, "help" with chores, begin learning manners
Baby's Purchases: none
Parent's Responsibilities:  Encouraging self help skills in feeding, toileting and cleanliness.  Allowing baby to "help" clean even if it makes more of a mess.  Most of these will probably come into play the latter part of the year.
Parent's Purchases:  All.
Savings: $100/week in savings from parents

YEARS 2 - Commission Charts Begin!
Child's Job: cleaning up one toy before starting another, clearing table,  cleaning up room before leaving it, wiping down table or counter (with help), helping to make dinner (child friendly meals only), sweeping the floor (even if you have to do it again after).   Acts of kindness, creativity, patience can all be rewarded as well.  Job's are rewarded contingent upon good attitude while doing it.
Child's Purchases: Wish list toys or dollar store toys. 
Parent's Responsibilities: fostering esteem - a feeling of self confidence/pride in work achieved. Beginning to teach children to meet their own physiological needs.
Parent's Purchases: Basic clothing, housing, food and play needs. 
Method: Sticker chart.  Stickers are added as responsibilities are completed. At end of week stickers are counted and checks are added to savings, spending and giving.  **Maybe we can make fake checks and have the baby "sign his/her name."  They won't know the money amount, so lots of cheers can be given and excitement.  We can have three visuals/objects where they can put the checks.  I like a thermometer type visual and we can color it in as they get closer to the year's goal.  Also, money doesn't have to be proportional at this point.  We can put 90% in savings and 1% in spending and they won't know the difference.  They get a special place to keep their spending money (wallet, piggy bank, etc.)  Giving money can be with spending money, but in different compartment.  They can give it when they go to church.
Savings: $100 per week (from parents)
Spending: $0.25-$2.00 per week (contingent upon commission)
Givings: $0.25-$2.00 per week (contingent upon commission)

YEARS 3-4 - Real Chores Begin!
Child's Jobs: Vacuuming, watering plants, emptying trash from room, sorting and folding socks, wiping doorknobs, wiping down sink/toilet, rinse/load plastic dishes into dishwasher (do with care!! remove sharp or breakable objects first), mopping, simple meal prep.  MOST SKILLS FROM YEAR TWO ARE NO LONGER REINFORCED ON A CONSISTENT BASIS - clearing plates and putting toys away after being finished is no longer rewarded, but expected.  Keeping room clean is still rewarded.
Child's Purchases: Wish list toys or dollar store toys, accessories for clothes if desired, specialty items.
Parent Purchases: All Else
Savings: $100 per week (half from parents)
Spending: $0.50-$3-4 per week (upper limit is their age)
Givings: $0.50-$3-4 per week (upper limit is their age)

YEARS 5-10 
* I think we'll have to figure this out when we get there - I do have 5-10 years.  :) I'm thinking at this point, we'll start putting the $100 in our retirement account (or a different savings) and match what they put in savings 100%. 
Savings: 50%
Spending: 40%  (can be divided into wish list and gifts)
Giving: 10%

We'll have to choose something to up responsibility.  I think these would be good years for kids to start using their own money to purchase gifts.

YEARS 10-15
* Maybe added child purchases can be clothes or sports equipment.
Savings: 30%
Spending: 50%  (can be divided into wish list, clothes, sports and gifts)
Giving: 10%
YEARS 16-17
*At this time, it is expected that they would work part time jobs during Summer (maybe even during school).  Child purchases may include cars, auto insurance, gasoline, technology like laptops, recreation with friends, etc.
Savings: 20%
Spending: 60%  (can be divided into categories)
Giving: 10%
*Last six months of school, responsibilities include partial pay for housing, rent, utility bills, phone and health insurance.  We want them to get some practice before going off to college.  Mistakes should be made when under our roof and when they have our support.
Savings: 20%
Spending: 60%  (can be divided into categories)
Giving: 10%
My major problem is still how to get that $100 of savings in there without giving them money or inflating the worth of their jobs.  We'll have to figure it out.  Maybe we can come up with special projects that have to do with innovation, creativity or entrepreneurship which are extra??  We have time. 

Goals for Baby Sanchez: Polyglot, Avid Reader, Good Financial Steward