June 9th, 2011
**This summer, we?re excited to present ?Community Karma,?a weekly series featuring peoplejust like you sharing their financial stories, personal money tips, how they over overcame hardships, and more!**
Ava, age 7, knows more about money than most kids her age.
She has three jars at home, labeled ?Savings,? ?Spending,? and ?Give Away.? One day she wanted to purchase a $5 book about Taylor Swift, so she checked her ?Spending? jar first to see if she had enough. Excitedly, she brought her $5 to the school book fair.
But when the Taylor Swift book sold out, this clever kid returned home and put the cash right back in her ?Spending? jar.
Ava?s dad, Danny Kofke, taught her a little something about the value of money. It?s no surprise; Danny is kind of a money-savvy guru himself.
This is the story of Danny, a special education teacher in Georgia, who manages his household?s money so well that his family of four lives solely on his salary of $40,000.
How does he do it? Check out some of his tips for managing your money.
Double?or triple?your payments. Danny and his wife spent two years teaching overseas in Poland before starting their family in the U.S. When they returned to the U.S., they leased a car. In order to get rid of that debt as quickly as possible, the Kofkes began doubling and sometimes tripling their payments each month. Now, the family of four has only one debt left: their mortgage.
Know where you can cut back. The Kofkes don?t have smartphones. In fact, Danny pays just $10 a month for his basic cell phone plan. But the family does enjoy their satellite television. If they had to cut back on something, ?that would be the first thing to go,? says Danny.
Splurge sometimes, but know where your money is going. The Kofkes enjoy eating out just as much as the next family. ?We go out to dinner, just not every night,? Danny says. The family can eat out because they know where their money is going, and they like knowing. ?Gaining control of your money is gaining control of your life,? Danny says.
Teach your kids money management skills early. The Kofke kids, ages 7 and 4, understand more about money than you might expect. ?People think it?s so hard to teach kids financial basics, but it?s not,? Danny says. The Kofkes? oldest daughter understands what we might consider a difficult concept: student loan interest. And while she won?t need to worry about that for at least 10 more years, she?ll be more financially prepared to handle future money matters.
Manage your finances on a day to day basis. ?People think they?ll never be able to understand personal finances, but you can,? Danny says. According to him, it?s about ?day to day personal finance management.? You can save $5 on lunch each day by brown bagging it. As a result, each month you?d have an extra $100, and each year you?ll have saved $1,200.Danny demonstrates that small, everyday choices can result in big savings in the long run.
Remember what?s important. Danny had the chance to work a high-paying, 6-digit salary sales job. And he did?for two months. He quickly realized he missed his teaching job and went back. ?I?m not trapped in a higher paying job that I?m not passionate about,? he says. ?Things and money don?t bring a lot of happiness.? Now he?s happy because he loves what he does, plus his family can enjoy financial stability thanks to his smart money moves.
Danny has more tips in his book ?How To Survive (and perhaps thrive) On A Teacher?s Salary,? and he?ll share some more in his forthcoming book ?A Simple Book of Financial Wisdom.?
Stay tuned for next week?s installment of the ?Karma Community? series!
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Source: http://blog.creditkarma.com/step-by-step/personal-finance/community-karma-money-tips-from-a-teacher/
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