Dave Ramsey fans, where do kid's activities fall?

[rafiki]

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[mrs.m]

Well, for us, kids activities are always the first thing to go. But right now we are doing well. But we still can't pay extra for our mortgage.

 

Personally I think as long as you aren't accumulating debt and you are saving, then it is ok to budget for some of the extras.

 

On the other hand, no house payment would be really nice. I think for us that isn't a priority right now and the kids' activities/education expenses are important. The mortgage is a big bridge to cross over and we aren't willing to make the sacrifices. So that's just our reality!

[lotsofpumpkins]

We are still getting out of debt, but we are still willing to spend a little bit of money so that our children can play t-ball/baseball this spring. This is pretty much the only activity we do though, so we aren't talking a whole ton of money. I think there's a balance to be found. Being a good steward with your money is a good thing, and children's activities can be part of that.

 

If you are working so hard at getting that mortgage paid off that your children aren't getting to do anything fun, then I'd re-evaluate. They are only young for so long. When they are all grown you don't want to have regrets. That being said, I do think that many children in our country are over-scheduled, and don't NEED to do as much as they do.

[....]

I have heard him say to stop kids activities (on his podcast) if it will not fit into the budget.

[rafiki]

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[rafiki]

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[Parrothead]

Realistically how much do you spend a month on kid activities? Right now dd is in 4 paid activities. She is an only child in a neighborhood with no other children. For us it is essential to be around other children so I pay $25 ($100 a month) a week for three dance lessons and karate. (She also has Girl Scouts and Sunday school.)

 

That $25 a week is not going to make or break the mortgage getting paid off.

[rafiki]

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[Sputterduck]

We're to the baby step of saving to own a home, ours is on the market and we will rent until we are able to pay cash for a home. I'm finding the more we save, the more cautious we get about spending across the board.

 

Often rent is more expensive than a mortgage. That may not be true where you live though. At least if you are paying a mortgage the money is going somewhere on your end. If you pay rent the money is just gone. That may not be true where you live though.

 

That said, I pay very little because I'm renting a couple rooms from a friend right now, so it doesn't compare at all to a mortgage payment. *If* I had to pay a rent that was around the cost of a mortgage, I would much rather pay a mortgage. I rent rooms because I'm way too frugal :p and I put most of my money away every month and I like it that way. A house to myself is cool, but not at the cost of not being able to save as much as I do.

 

 

eta: It clarify - If you pay 1000 dollar rent for 10 years, that is 120,000! dollars that is just gone forever. If you put that money into a mortgage, you have that much in equity. You have something worth a lot in the end. Of course, it's not quite that easy with interest, but it makes my point.

Edited January 24, 2010 by Sputterduck

[Pippen]

That $25 a week is not going to make or break the mortgage getting paid off.

 

That's what I thought when I had one child. Now that I have all three in music and one also in dance, it's almost as much per month as my mortgage. :001_huh: I'm still shocked we've been able to pull it off.

[Parrothead]

That's what I thought when I had one child. Now that I have all three in music and one also in dance, it's almost as much per month as my mortgage. :001_huh: I'm still shocked we've been able to pull it off.

But having three means your kids have built in playmates. I know if we were able to have more children they wouldn't take more than 1 class each. I wouldn't be able to afford it.

[CAMom]

 

 

eta: It clarify - If you pay 1000 dollar rent for 10 years, that is 120,000! dollars that is just gone forever. If you put that money into a mortgage, you have that much in equity. You have something worth a lot in the end. Of course, it's not quite that easy with interest, but it makes my point.

 

Well, you wouldn't have $120,000 in equity after those 10 years of paying $1000 per month on a mortgage because (especially during the early years of a mortgage) most of your payment is going to interest. It's true you would gain some amount of equity but not that full amount.

 

On the original question, I'm not sure what Dave would say but my family does spend on kids' activities. Our only debt is our house and my kids are competitive in speech and debate. We just planned out our tournament season last night and we are spending quite a bit this year. (Most of the cost in in hotels to stay in while we are traveling to out of town tournaments.)

 

My kids also go to Worldview Academy during the summer and a debate camp.

 

It ends up being a significant sum. But we are also in a position where, although our house still has a mortgage, we are set to pay it off at least 10 years early.

[jenL]

Interesting thread as dh and I just had this talk before we signed ds up for soccer. For us, we've decided soccer will be his only activity. We've already dropped piano for our budget, but it would be like cutting off his leg if we stopped soccer. So, we moved some money around in our budget to pay for soccer. This month is tighter as a result, but we got it done. We'll do it again when it comes time to sign up for fall soccer.

 

As for all other activities... field trips come out of my education budget, and we just schedule park play dates, etc. to get the kids out.

 

I know what Dave says, and we respect him greatly, but as someone else mentioned, our children are only young once. Finding a balance is key. For us, paying for one sport is something for which we can sacrifice temporarily.

[monalisa]

We are huge Dave Ramsey fans, and do alot of what he says. We benefited greatly from FPU, although we didn't have any debt other than our house anyhow.

 

However, I do think he goes a little overboard on retirement & other savings (15% a month is a HUGE amount to be putting into retirement for many normal people's budget, especially if you believe in tithing!). I think for most people that if you follow what he does to the letter, you end up spending very little discretionary money and possibly creating some family resentment. Every time I say "What would Dave tell us about this" my husband reminds me that he's speaking from a position of extreme wealth and its easy for him to say "drop the _____" (yes, he got there by partly being "gazelle intense" as he says but he also is entrepreneurial in a way most normal people could never follow).

 

I think there is a balance to be had. I'd even go so far to say that it is OK to reduce your monthly retirement savings a teeny bit if you have to in order to afford some reasonably priced kids activities. No you don't have to spend money to have fun or be around other kids, but as in most things in life there needs to be some moderation. I'd be more likely to find other holes to plug (like eating out less, using cash all the time etc.) than totally cut out kids activities.

[coffeefreak]

I listen to Dave's show daily. He says, if you can budget it in and pay cash (or check), there's nothing wrong with having your kids in activities. BUT, it has to be an honest budget. If you have to use your cc at all during the month, than your budget is wrong and things need to go. If you can get rid of other things before the kid's activities, great! If not, than the activities need to go.

 

We have had to cut back and the kids know why. There is nothing like cutting out family and kid's activities to make you get "gazelle intent."

 

Blessings!

Dorinda

[WeeBeaks]

We budget for it. We did not when we had CC debt and a car loan. All money went to those, but we were also fortunate that our kids were younger. We still do have a mortgage, and we pay extra towards it, but we have some fun money too for activities for the kids and as a family. What works for our family is a balance of paying off our mortgage faster while still making good memories and enjoying life today.

 

I agree with the poster though who said if you are using your CC to pay for kid activities, that probably isn't a good idea. A stressed out, financially unstable family is probably worse for the average kid than no fee-based enrichment activities. If you absolutely cannot afford it right now, there is always the local park, story times at the library (ours has a few for older kids) and so forth --- free stuff. Then add back some of the others later when the finances are better.

[....]

I listen to Dave's show daily. He says, if you can budget it in and pay cash (or check), there's nothing wrong with having your kids in activities. BUT, it has to be an honest budget. If you have to use your cc at all during the month, than your budget is wrong and things need to go. If you can get rid of other things before the kid's activities, great! If not, than the activities need to go.

 

We have had to cut back and the kids know why. There is nothing like cutting out family and kid's activities to make you get "gazelle intent."

 

Blessings!

Dorinda

 

 

:iagree: If you honestly can't fit these things into your budget, Dave recommends holding off on them until you are in a better position financially. For example, if you are in Baby Step One - living paycheck to paycheck, can't come up with the balance to move onto BS2, are one paycheck away from disaster - kids' activities would need to go...

[Pippen]

But having three means your kids have built in playmates. I know if we were able to have more children they wouldn't take more than 1 class each. I wouldn't be able to afford it.

 

I understand about the playmates, plus until this year mine were all in ps so they had a lot of daytime interaction with kids. I just thought I'd mention it as food for thought for those with younger kids.

 

Back then I shied away from most extra activities except the occasional swim lessons and t-ball, both because of the money and because I couldn't cope with the run around lifestyle. If someone back then would have told me I would be spending this much time and money on kids activities I would have scoffed, especially since no one was interested in sports. One by one they all became involved in arts and the costs snowballed but somehow we've managed because it's been so very positive in the lives of our kids. It's also really opened my eyes to how much can be cut from our budget, even though I thought we were already living lean.

[Mommyof4ks]

I think it depends on what is more important to you. Based on the scenario you put forth, I would do as much as you feel comfortable with as far as child activities. Life is short (we have a child with cancer so we know how short life can be), and personally I want my kids to have fun as kids. We are doing well financially, and as long as that continues we will keep our kids in 2 activities each plus co-op.

[katilac]

Rather than trying to set a percentage of income, I think it's more practical to look long and hard at what activities are available, and what the cost is in relation to what the kids get out of it.

 

I think that younger children can do just fine with no outside activities, but they can be very important as they get older, particularly once they get to the middle and high school years - - not so much for the socialization aspect, but more for trying new skills, increasing confidence, and moving into a larger world.

 

For kids 9 and up, there are several things I would give up before keeping them out of activities. For example, I would not put $2,000 into an educational account while saying they could not participate in any activities. Ditto for 15% into retirement. While the educational account is for their benefit, you have to balance present and future - - activities NOW can improve their lives, spark new interests, and improve their chances of admission and scholarships.

 

Of course, I would address genuine extras first. Before telling a kid 'no activities' or cutting savings, I would definitely make sure that we weren't paying for cable or eating out, etc.

 

So, yeah, balance. I have no problem with telling my kids they can't do certain activities, and I'm very open about explaining that we're not willing to put out big amounts of money for something that is essentially for fun, or that can be nearly duplicated for much less investment. So the kid with a sudden interest in karate has to start with low-cost parks and rec lessons; if she sustains the interest without shiny new uniforms and 'stripes' every month, we would consider consider more costly lessons (if and when she outgrows these). But I'd plan on working a few extra years before I'd tell my kids 'no activities.'

[rafiki]

.

[coffeefreak]

eta: It clarify - If you pay 1000 dollar rent for 10 years, that is 120,000! dollars that is just gone forever. If you put that money into a mortgage, you have that much in equity. You have something worth a lot in the end. Of course, it's not quite that easy with interest, but it makes my point.

 

Not to derail the thread, but doesn't Dave say that's why you need to get out of debt FAST! Like in 3-5 years. And if you can't, I've heard him say to buy a house, but I don't remember the stipulations.

[coffeefreak]

Looking at our last mortgage statement 41% is escrow, 50% is interest, and 9% is principal. We could rent a place more than 9% lower than our mortgage and depending on where, that may include some other utilities we pay on our own now and we wouldn't be responsible for major repairs.

 

That's actually been the nice thing about renting. We owned a home for 8 years and struggled the entire time. Now, we're paying $200 less per month to rent. This house has needed at least $1000 worth of repairs since we moved in and it has been SUCH a relief not to be responsible for that. We're FINALLY getting ahead for the first time EVER! We're hoping we can buy in the next 3 years, but in the meantime, we're pretty happy with renting.

 

Blessings!

Dorinda

[....]

:iagree: We are also renting for the first time in years and it is a huge relief. No more stressing about PMI payments, property taxes and wondering if the furnace is going out. It's a really nice break. We were constantly pouring money into the house we owned (to keep up with the neighbors).

 

We're saving up for a huge down payment. I want to have no mortgage in my 40's!! :D My parents and in-laws are in their mid-50's and still have more debt than we have - car payments/credit cards and stupid :001_huh: like that.

 

Remember what Dave says, you can change your entire family tree by getting completely out of debt.

[2squared]

However, I do think he goes a little overboard on retirement & other savings (15% a month is a HUGE amount to be putting into retirement for many normal people's budget, especially if you believe in tithing!).

 

I don't agree with this at all. 15% might be a lot of money, but to me, it's a minimum % for retirement. I wouldn't stay at home if we were unable to save adequately for retirement. Retirement without savings would be an unbelievable burden to my entire family.

 

That being said, we have been undersaving for two years now. Dh took a huge cut in pay, and we are just now recovering. I've been able to tolerate it because we oversaved until this bump in the road, it is a temporary situation, and dh is working toward retirement with the Air Force reserves. If we can't get back to at least 15% by next year, I'll be looking for paid work of some kind.

[TravelingChris]

Let me just say that Dave Ramsey is only one financial advisor/counselor and his ideas and examples may not be the right ones for everybody or parts of his may not be right for you. Is is better to have emergency savings rather than paying with credit cards? Yes. Is it wise to spend less then you make? Yes. But the specifics is different for different folks. If you don't have a burdensome debt problem, the best advice for yo may be quite different.

 

For example, the emergency savings. I would say that having 1k in savings is a minimum. But then, how much should you have in very low interest savings? Three months? Why? If you are a family that is likely to fell unemployment, yes. But if you are retirement eligible military- I don't see a need to tie up tens of thousands in low savings rate. I don't even think I would advise most families with incomes above the median to save three months in a low interest savings. How much should they save in ready cash- the deductible for the home, renter's or car insurance, the co-pays if a medical problem costing 10K arose, the cost os anew home appliance, something like that. But that doesn't equal even one month's salary of savings for many people. For others, it might be three or more month's worth of salary. Just giving percentages for this doesn't necessarily make sense.

[Pippen]

:iagree: We are also renting for the first time in years and it is a huge relief. No more stressing about PMI payments, property taxes and wondering if the furnace is going out. It's a really nice break. We were constantly pouring money into the house we owned (to keep up with the neighbors).

 

We're saving up for a huge down payment.

 

We rented for the first few years after we got married and we loved not having any responsibility. Plus with me still working and no kids we were able to knock off all of our loans plus save a huge down payment and it's made so much difference for us. I did work the first year that I was a mom and that was to replenish our savings.

 

We were told to expect this, but one thing that was a shocker was how much of a mortgage payment the real estate agent told us we could afford based on our income. She claimed we could do $1400 per month. Even with two of us working we wouldn't have been able to manage that. We told her to knock $1000 off of that number.

 

I know housing markets really vary, but here I don't think we would have been able to make our goal of me staying home with the kids if we'd have bought without a substantial down payment.

[FriedClams]

Often rent is more expensive than a mortgage. That may not be true where you live though. At least if you are paying a mortgage the money is going somewhere on your end. If you pay rent the money is just gone. That may not be true where you live though.

 

That said, I pay very little because I'm renting a couple rooms from a friend right now, so it doesn't compare at all to a mortgage payment. *If* I had to pay a rent that was around the cost of a mortgage, I would much rather pay a mortgage. I rent rooms because I'm way too frugal :p and I put most of my money away every month and I like it that way. A house to myself is cool, but not at the cost of not being able to save as much as I do.

 

 

eta: It clarify - If you pay 1000 dollar rent for 10 years, that is 120,000! dollars that is just gone forever. If you put that money into a mortgage, you have that much in equity. You have something worth a lot in the end. Of course, it's not quite that easy with interest, but it makes my point.

 

 

Renting is not always more than owning. Yes, with owning you get a tax write off and a potential gain on a sale - but owning advocates never mention other costs - like a new roof, repainting, a new a/c unit, prepping to sell, agent fees, etc. The days of flipping a house and making a killing are gone. Renting can be a great option while saving enough to buy an affordable home. And boy, renting Is a whole lot less stressful than owning.

 

For the original ques

[Angel]

We fit our kids activities in on our monthly sheet under Education. That's where all our schooling budget comes from. Of course, we only have one activity currently, but if any more come along, we will see if they work within the monthly budget and if yes, then we will budget that amount specifically in our monthly sheet.