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How do I tell my kids we are currently short on money – without freaking them out?

<p><em><a href="https://theconversation.com/profiles/rachael-sharman-96073">Rachael Sharman</a>, <a href="https://theconversation.com/institutions/university-of-the-sunshine-coast-1068">University of the Sunshine Coast</a></em></p> <p>I was a teenager during Australia’s 1990s “<a href="https://www.theguardian.com/business/2019/nov/17/remembering-the-recession-the-1990s-experience-changed-my-view-of-the-world">recession we had to have</a>”, and remember clearly a friend asking his dad for some money to go to the movies.</p> <p>With equal parts frustration and resignation, the dad explained he’d been retrenched and wasn’t certain employment was on the horizon in his near future. So he really didn’t have any spare money for cinema tickets.</p> <p>Rather than being scary or upsetting, as rather clueless teenagers this felt like something of a lightbulb moment.</p> <p>Many kids learn about their parents financial difficulties this way. Something they’ve always been able to have is suddenly denied them. The penny drops.</p> <p>But it’s not easy talking to your kids about the cost-of-living crunch. Many fear worrying their kids or leaving them with a lifelong “scarcity mindset”, where a person is forever cursed with a feeling spending money is always wrong.</p> <p>So how can parents communicate the financial realities to their children? And how might the messaging be different with younger kids versus teens?</p> <h2>For younger kids, keep things calm and simple</h2> <p>Most primary-aged children are oblivious to macro conditions outside their home and immediate community. They haven’t yet developed the ability to put sudden changes into perspective.</p> <p>The key here is not to have your own anxieties rub off on your kids.</p> <p>Children this age look to their parents as beacons of information and will very much <a href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2794157">mirror</a> any fear or anxiety you express. They may even blow things out of proportion.</p> <p>Keeping things calm and simple is key.</p> <p>Provide a basic explanation that things cost money, and you don’t have as much money as normal right now, so as a family there are certain things you just can’t afford.</p> <p>Very young children can be relentlessly narcissistic in their outlook – this is developmentally normal.</p> <p>They might even demand you work more or harder so they can afford their desired items and activities. The best you can do is laugh it off and offer to try – but explain that for now, the kids will have to come up with something else to do.</p> <p>Consider a plan to substitute their previous activities with free ones. For example, explain they can’t play their usual sport this season, but you are going to head to the local park every week to kick the ball around and have a picnic instead.</p> <h2>Ask teens for their opinions and ideas</h2> <p>Depending on their intrinsic interest in the news and understanding of maths, finance and economics, a sudden and unexpected drop in finances may also come as a shock to teenagers.</p> <p>But at around 12 years of age, children undergo somewhat of an explosion in <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3621648/">frontal lobe function</a>. Their capacity to comprehend and process even complex information increases quite markedly.</p> <p>So teens may not only understand your current situation, but be able to help out.</p> <p>Giving teens a “role” to play in assisting the family builds a sense of competence and offers a team-based problem-solving approach to the emotional concerns they may be feeling. In other words, they’ll feel less powerless.</p> <p>This approach is underpinned by what psychologists and researchers call “<a href="https://selfdeterminationtheory.org/theory/">self-determination theory</a>”.</p> <p>This well-studied concept posits that most humans have an innate need to:</p> <ul> <li> <p>experience and demonstrate autonomy (making your own choices, acting on your own volition)</p> </li> <li> <p>competence (feeling like you’re good at something, have achieved something worthwhile)</p> </li> <li> <p>relatedness (working well with others, especially people important to you).</p> </li> </ul> <p>So working as a team towards a common goal is a great way for a family to pull together and help each others’ mental wellbeing.</p> <p>Discuss with your teens what activities, events and items might need to go on the backburner or be discontinued.</p> <p>And don’t forget, teens have a very well-honed hypocrisy radar – there’s no point suggesting they cut back on recreational activities, for example, if you are not willing to do the same.</p> <p>Use this as an opportunity to discuss the difference between “wants” and “needs” and ask them to sort family spending into those categories. Discuss points of disagreement calmly.</p> <p>Ask your teens to brainstorm ways to improve your financial efficiency – and help you in doing so. They might enjoy coming up with ideas such as grocery shopping with a strict meal plan in cheaper stores, looking for specials, riding or walking to school where possible, getting a part time job or helping out with childcare.</p> <p>Rather than fixating on what we have to go without, work with your teenagers to come up with proactive ideas on what you can do differently. Frame it as working together to achieve the same aim.</p> <p>Teach your kids there can be challenges in life, but how you go about managing them is the key. This will help them develop into resilient adults.<!-- Below is The Conversation's page counter tag. 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More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/rachael-sharman-96073">Rachael Sharman</a>, Senior Lecturer in Psychology, <a href="https://theconversation.com/institutions/university-of-the-sunshine-coast-1068">University of the Sunshine Coast</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-do-i-tell-my-kids-we-are-currently-short-on-money-without-freaking-them-out-208008">original article</a>.</em></p>

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15 surprisingly frugal habits of the British royal family

<p><strong>Keeping breakfast simple</strong></p> <p>When you imagine a royal breakfast, you probably picture an impressive spread of poached eggs, smoked salmon, exotic fruits, and endless pastries. Well, Queen Elizabeth knows what she likes, and it’s quite the frugal choice.</p> <p>She pours herself a bowl of a simple cereal like cornflakes or Special K – kept fresh in a plastic container instead of the box – to eat with fruit.</p> <p><strong>Reusing gift-wrap</strong></p> <p>Biographer Kate Williams reveals that Queen Elizabeth doesn’t let used wrapping paper go to waste. Since she was young, Her Majesty has been saving gift-wrap and ribbons from the bin, then smoothing them out so they can be reused.</p> <p><strong>Recycling outfits</strong></p> <p>Most people don’t think twice about outfit repeating, but the royal family is well aware that people are looking at – and remembering – everything they wear. Other celebrities might wear an outfit in public once before rejecting it, but the royal family turns its nose at that wastefulness.</p> <p>Kate Middleton and Queen Elizabeth have both been known to wear the same outfit for more than one official engagement. Neither of them comes close to Princess Anne, who has kept favourite outfits on her rotation for as long as 35 years.</p> <p><strong>Repairing instead of replacing </strong></p> <p>With as much money as Queen Elizabeth has, you’d think a simple pair of worn-out gloves would be tossed in the bin.</p> <p>But Her Majesty is against that kind of waste, washing and mending her gloves instead of ordering new ones. In fact, she still has pairs from 40 years ago.</p> <p><strong>Opting for DIY</strong></p> <p>With the world watching Kate Middleton’s 2011 marriage to Prince William, you’d think she would hire professionals to make her makeup TV-ready. Nope.</p> <p>The now-Duchess of Cambridge passed on the pro help, and applied her makeup by herself, according to People. She did take a few private lessons from a makeup artist before the big day, though.</p> <p><strong>Cooking for themselves</strong></p> <p>Live-in chefs aren’t the norm for every royal. Kate Middleton reportedly does most of the cooking for her family, including making Prince William’s favourite diner: roast chicken.</p> <p>Prince Harry has also been spotted doing his own grocery shopping. Wonder what might be in their shopping carts?</p> <p><strong>Giving silly gifts</strong></p> <p>To the family who has everything, gifts aren’t about trying to outdo each other, so they give joke gifts instead.</p> <p>In 2019, Meghan Markle reportedly gave Queen Elizabeth a singing hamster that made her future grandmother-in-law laugh out loud.</p> <p><strong>Flying economy</strong></p> <p>While Queen Elizabeth won’t take commercial flights, her grandchildren have been spotted on them. Prince William was spotted flying economy on an American Airlines flight from Memphis to Dallas in 2014, and Prince Harry and Meghan Markle travelled economy on British Airways to ring in the 2018 New Year in Nice.</p> <p><strong>Cutting electricity costs</strong></p> <p>With an estimated 40,000 lights in Buckingham Palace, electricity bills add up fast. That’s why in 2011, Queen Elizabeth posted signs around the building, ordering palace staff to turn lights off when they aren’t using them, according to <em>Financial Times</em>.</p> <p>Her Majesty was so serious about the initiative that she would walk through palace halls switching off lights, an employee revealed at the time.</p> <p><strong>Wearing hand-me-downs</strong></p> <p>Sure, Prince George and Princess Charlotte could afford to wear new, stylish clothing all the time – but William and Kate have other plans for their kids. Princess Charlotte has been spotted wearing shoes her uncle Prince Harry wore more than 30 years before, when he was two.</p> <p>Meanwhile, Prince George has worn an outfit that his dad had originally worn to Prince Harry’s christening back in 1984. Some things never go out of style.</p> <p><strong>Making use of leftovers</strong></p> <p>Some rich families might toss any uneaten foods, but not the royals. Chef Carolyn Robb, who worked for Prince Charles and Princess Diana from 1989 to 2000, tells <em>racked.com</em> that the family didn’t put food to waste.</p> <p>Charles would request only being served as much as he could eat, and any leftovers would be incorporated into the next meal. Roast lamb, for instance, could be mixed into Shepard’s pie.</p> <p><strong>Shopping for inexpensive clothes</strong></p> <p>While Kate Middleton and Meghan Markle are no strangers to designer couture, they also know how to look chic on a budget.</p> <p>Royal watchers have spotted Kate wearing Gap and Zara pieces, while Meghan is reportedly a fan of Everlane and J.Crew. It’s no wonder their fashion choices tend to sell out so quickly.</p> <p><strong>Keeping beauty low-key</strong></p> <p>Queen Elizabeth doesn’t reach for Dior nail polish when she wants a manicure. Instead, her nail colour of choice is a pharmacy brand that rings up at a cool $9 a bottle.</p> <p><strong>Giving up central heating </strong></p> <p>While the royal family could probably afford central heating to keep all 775 rooms in Buckingham Palace warm, the Queen chooses to use space heaters (at least in certain rooms) instead.</p> <p>Perceptive royal watchers have noticed space heaters nestled in fireplaces in Buckingham and Balmoral Castle. With the units costing just £20 to £30 ($37 to $56) each, you can bet Her Majesty is saving a bundle.</p> <p><strong>Keeping items as long as possible </strong></p> <p>You might expect a frequent flier like Queen Elizabeth to invest in new luggage every trip – or at least, maybe once a decade. Once Her Majesty finds something she likes, though, she isn’t likely to let it go.</p> <p>The Queen apparently still uses the same Globe-Trotter suitcases that she bought for her honeymoon in 1947, according to the company’s website.</p> <p><em>Image credits: Getty Images</em></p> <p><em>This article originally appeared in <a href="https://www.readersdigest.com.au/culture/15-surprisingly-frugal-habits-of-the-british-royal-family?pages=1" target="_blank" rel="noopener">Reader's Digest</a>. </em></p>

Money & Banking

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The surprisingly frugal spending habits of the rich

<p>You may be surprised to discover that some of the richest people in the world are also some of the biggest penny pinchers. Then again maybe that’s part of why they managed to accumulate such wealth in the first place.</p><p>Here are some habits of the frugal wealthy you can possibly take on board to help with your savings.</p><p><strong>Resisting the impulse buy –</strong> It’s hard for some people to avoid the tendency to splurge, or resist getting tempted by all those sale signs when they go shopping. Wealthy people are not reactionary. They have a tendency to be a little more considered in their purchasing habits.</p><p>One of the greatest fears of high net worth individuals is becoming poor – especially if they have previously struggled with finances. So, they tend to take their time with purchases. Delayed response helps them avoid some of the impulses that would result in poor choices otherwise. Opportunities are more easily made up than losses.</p><p><strong>Milking the value –</strong> This may surprise you: like most of us, wealthy people are all about getting the most bang for their buck. Whether it be frequenting auctions, liquidation sales or using Shop A Dockets, the super rich are more aware than anyone about getting the best value for their money.</p><p><a href="/finance/money/2014/12/free-online-money-tools/" target="_blank"><em><span style="text-decoration: underline;"><strong>Related link: Online tools to help you manage your money for FREE</strong></span></em></a></p><p><strong>Quality not bling –</strong> The rich tend to adopt a ‘quality over prestige’ mindset when purchasing big-ticket items. A Mercedes is more appealing than a flashier Ferrari. They look for quality that suits their needs rather than feeling they have to spend as much as their income or net worth would allow.</p><p>Wealthy families also often hand down valuable, well-made assets such as furniture from generation to generation, demonstrating how buying quality helps to preserve wealth. So the lesson is – for the important things in life, buy quality. Take good care of it, so you only buy once.</p><p><strong>Avoiding debt –</strong> Affluent people are more likely to avoid debt like the plague unless it involves a business venture. People trying to achieve wealth will leverage themselves hoping for that break or thinking that eventually they'll be able to catch up. But avoiding debt can be the key to becoming wealthy and staying wealthy.</p><p>The rich are often money vigilant, which can mean they're less likely to buy on credit and more likely to pass on a purchase if they can't pay cash. Wealthier individuals are more anxious about making sure they have enough money and are managing it well.</p><p><strong>Lifestyle choices –</strong> It's important to remember that you can learn to stretch your money and accumulate wealth, regardless of your income level, by living below your means, which is often a characteristic of the wealthy. Controlling what you spend is part of wealth preservation. You can't control interest rates and the stock market, but you can control a lot of the discretionary part of your lifestyle. That can mean pinching a few pennies to maintain prosperity.&nbsp;</p><p><span style="text-decoration: underline;"><strong>Related links:</strong></span></p><p><a href="/finance/money/2015/02/tips-to-become-debt-free/" target="_blank"><span style="text-decoration: underline;"><strong><em>Some really great advice on how to become debt free</em></strong></span></a></p><p><a href="/finance/money/2015/01/supermarket-savings/" target="_blank"><span style="text-decoration: underline;"><strong><em>Six strategies to save you money at the supermarket</em></strong></span></a></p><p><a href="/finance/money/2014/12/good-financial-habits/" target="_blank"><span style="text-decoration: underline;"><strong><em>Here are 5 financial resolutions to keep this year</em></strong></span></a></p>

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