I love the topic of finances. In college, I read Dave Ramsey’s book The Total Money Makeover: A Proven Plan for Financial Fitness and it changed my perspective on everything when it comes to money. My biggest takeaway from this book were that the money I earn is a gift from God. It’s really His money and I am the manager of it. He gave me the necessary skills and tools to earn the money. The phrase that was repeated over and over in the book was, “live like no one else so that you can live like no one else.” You might be scratching your head if you’ve never read the book. Basically, it means that it work your butt of now and put in the extra work then you can have financial freedom and be debt-free with no worries. I loved reading all of the real life stories of couples who were in hundreds of thousands of dollars in debt and how they implemented Ramsey’s strategies and became debt free. You just have to be willing to work hard and think outside the box.
When I became pregnant with my first child, I thought a lot about how I would save for his future. My husband and I had plenty of conversations of what we would give him and what we would make him work for. My husband and I have always been hard workers and we want our son to also work hard and not become entitled or spoiled. We decided to start with setting up a savings account that earned interest. I set up an automated transfer to it each week and I don’t plan on touching it until he is 18. Although my husband and I have separate finances, we both have emergency funds if needed. That way we don’t need to dip in to Axel’s savings.
Rewind back to before I had Axel. Andrew and I were slightly freaking out when we started looking at the cost of daycare and all the other costs that come with having a baby. We both have good jobs in IT but we were both feeling like we would have nothing left over to save! That’s when I started looking into starting a blog. I didn’t understand how blogs made money but I wanted to know more because it sounded like a good side income. I thought that maybe if I could earn even a little on the side I could start a savings fund for baby Axel. To my surprise (and I am honestly still shocked) I earned over $1000 within just a few months of entering the blogging world. Check out my recent post where I explain my blogging income sources.
Some bloggers post detailed monthly income reports. I think that’s great because I have enjoyed reading a lot of those myself. I was on the fence to whether or not I would share all of my details. I decided I would share every now and then when I felt it would be helpful to others. It seems a bit out of the norm for me to be so public with my finances but this feels a little different since I blog to share about my lifestyle and how to help others. December 2017, January 2018 and February 2018 were great earning months for my blog work. I have been able to start the savings plan for Axel and use the remaining earnings to start paying off debt – snowball style! The Snowball debt method is a strategy where you pay off your debts starting with the smallest balance you have. You do this because once you pay off one small debt it helps build momentum and encourage you to continue knocking out debt. I have a small loan remaining from grad school and my mortgage. Some people don’t consider their mortgage as part of their total debt but it is included for me.
Below is a screenshot of a savings scenario with final balance I got from an online savings calculator. If I continue to transfer over a portion of my side hustle income (from blogging and our Etsy shop) then by the time baby Axel graduates, I could have over $98k set aside for him and maybe his future younger sibling. We are still deciding if we want to have another child. We are in the dazed, tired phase of being new parents still! 🙂 This example just goes to show the importance of savings!
Now, when I shared this with my husband he was a little concerned about what an 18 year old would do with that kind of money. He said that if he would have received something like that when he was 18, he probably would have bought some cars. I don’t intend to just hand over a big chunk of cash to my boy. This gift will come with some guidelines. I want him to use it for college tuition, his wedding or maybe a first time home purchase so Mama might have to hold on to some of it for a little longer than 18 years. And who knows, maybe he will have a little brother or sister he has to share it with! 🙂
One thing I will totally own is that I have been told by my financial adviser and close friends that I “save to aggressively”. Ha! I didn’t know that was a thing but it is. I do strongly feel that it is important to save and be prepared but I also want to find a good balance and make sure I am enjoying life too. I want to be sure I plan family vacations and fun activities in my budget and not obsess over saving every penny. It’s all about balance!
What are your savings plans for your little ones? Do you have a savings account, stocks or other investments intended for them? Maybe you want your kids to work and earn/save their own money. What are your thoughts? If you have kids and don’t have a savings plan setup yet – don’t worry. It isn’t a mandatory thing and if you’re thinking it’s something you may be interested in then just remember, it’s never to late to start!