Homemade “Meat”, “Cheese”, and Bread and how much do they cost

Artwork by The Child

I just finished eating a delicious “meat” and “cheese” sandwich on homemade bread and I thought I should share some amazingly easy recipes together with a comparison of the cost to make them at home verses buying equivalent products. Although the savings are significant, I mostly cook because I enjoy the magic of creating food (who knew you can make “meat” in your kitchen with just a few minutes of labor), and I like having control over the ingredients I use. Buying in bulk and cooking from scratch also reduces waste from packaging.

We are mostly vegan, hence the quotes above, but I am still pretty traditional and like a good “meat” and “cheese” sandwich once in a while. Bread is one of the easiest things to make and it is well worth making it at home to avoid all the preservatives added to store-bought breads. Plus it makes your house smell great.

I don’t remember where I got my bread recipe so I can’t give proper credit, sorry.

Bread

(This recipe is very forgiving. Even though I give exact measurements, I only measure the flour and the water and I am not very careful with those.)

Dry Ingredients
4 cups white flour
(can replace 1 cup with whole
wheat)
2.5 teaspoons yeast
1.5 teaspoons salt
Wet Ingredients
2 Tablespoons oil
1 3/4 cup warm water

In a big bowl mix together the dry ingredients. Then add the wet ingredients. Mix and knead for a couple of minutes. Add more flour if needed. Let the dough sit in the bowl covered with a damp towel for about 2 hours. It will double in size. I make two loaves out of it. After forming the loaves, give them another hour to raise and bake at 350 F until golden brown. Let cool before cutting.

Cost for two loaves using mostly organic ingredients with links to Amazon:

4 cups organic white flour = 18 oz =$1.62
2.5 teaspoons yeast = 0.25 oz = $0.20
2 Tablespoons oil = 1 fl oz = $0.05
Salt, water, and electricity for baking = a few cents
TOTAL: Less than $1.00 per loaf

Comparable bread at the store is about $3.00-$4.00 per loaf. You can have added fun by putting rosemary, oregano, or suflower seeds in the dough. Unfortunately the child does not like anything added to her bread so we make it plain.

Cheese

This recipe is a mild modification of Lessarella cheez by GoDairyFree. The original recipe is probably better but it requires lemons and I often don’t have those around. Prices quoted for mostly organic ingredients with links to Amazon.

2 cups water (free)
2 Tablespoons apple cider vinegar (1 fl oz, $0.18)
1/2 cup nutritional yeast (8 Tbsp or $1.50)
1/3 cup quick oats ground to a powder ($0.20)
1/4 cup cornstarch (optional, makes cheese extra solid) ($0.35)
1 Tbsp onion powder ($0.25)
1/4 cup tahini ($0.86)
1 1/2 teaspoon salt

TOTAL cost: $3.34

Put all ingredients in a food processor (or use a submersible blender), blend until smooth (less than a minute) and then cook until thick (about 10 min). While cooking you really must stir THE WHOLE TIME. Freezes well. Great on sandwiches, pizza, quesadillas, and as dipping sauce for vegetables.

This “cheese” doesn’t really have a store bought equivalent but it fulfills all of our family’s cheese-needs for the week which used to take 3-4 packages of Dayia at $4.50 a bag and it is much less processed.

“Meat”

I don’t know why but it took me years to discover how easy it is to make seitan at home. This recipe is a modification of Seitan with Chickpea Flour from One Green Planet. Again, the original recipe is probably better but this has fewer ingredients so it is faster and cheaper.

Dry Ingredients
2 cups vital wheat gluten
1/2 cup chickpea flour
1/2 cup nutritional yeast
1 tablespoon dried basil
1 teaspoon cumin
1 tablespoon onion powder
Wet Ingredients
1 tablespoon ketchup
1/3 cup soy sauce
1 1/2 cups hot water

Mix all dry ingredients in a bowl. Separately, mix all the wet ingredients. Add the wet to the dry, mix, and kneed for 3-4 min. Add extra wheat gluten if needed. Let rest for 15 min covered with a towel. I usually form two “loaves” and I like to make them kind of long and thin (helps with cutting later). Put in a pot mostly covered with water with some soy sauce and boil for 1.5 hours. They will at least double in size so make sure they have enough space to do that. You may have to top off the water occasionally and you might want to flip the loaves half way through but they will be fine if you forget. You can also boil them in vegetable broth but I never do.

Cost for two loaves of seitan using mostly organic ingredients with links to Amazon:

2 cups vital wheat gluten ($1.95)
1/2 cup chickpea flour ($0.72)
1/2 cup nutritional yeast ($1.50)
1 Tbsp dried basil ($0.25)
1 teaspoon cumin ($0.25)
1 Tbsp onion powder ($0.25)
1 Tbsp ketchup ($0.25)
1/3 cup soy sauce ($0.60)

TOTAL: $5.77

You can add seitan slices to any meal or salad. We also eat it just as a snack thinly sliced. Store-bought seitan in about $4.00 for an 8 oz package in my area. I don’t have a scale but I think the recipe above makes at least 2 lb so that is about $16 if you bought it pre-made. Plus, it is really fun to make!

October Spending

It is the middle of November, and I am just now posting our October spending. The election occupied all my discretionary time-to-think, and I just didn’t have the bandwidth to compute our numbers for October. But I am quite happy with the final results, and now I can get back to managing the household budget:0)

October was another month with pretty low spending – $2327. Interesting fact: this corresponds to about $28,000 per year. As we don’t include our property taxes in the monthly summary, adding them back in gives us $34,000 per year, which is really low -156% of the federal poverty line.


There is nothing particularly interesting in our October spending. It turns out that when nothing special comes up during the month, we can pretty easily keep our spending at about that level. However, November and December will be expensive months. We have several things coming up, including some large pet expenses, some fairly large car expenses, and some large donations.
Our food expenses have settled to between $700 and $800 a month for the last few months and, given that almost everything we eat is organic, I think this is pretty good. We are continuing not to buy processed food, so I am doing quite a lot of cooking.

A popular “rule” for proper budgeting is the 50/30/20 rule. According to this rule, you should spend 50% of your income on essential like rent and food, 30% on discretionary spending, and 20% should go to savings. We don’t follow this rule, and I don’t like it. Let’s start with essentials – by the definition of “essential,” there actually shouldn’t be much flexibility here. You need a place to live, but if you choose for your family of three to live in a five bedroom house (we do this, it is just how it worked out, it is not smart), some of that expense is discretionary. You also need food, but if you choose to pay for all organic, that is also discretionary. Thinking of your rent and food expenses as essential prevents you from seeing your actual choices.


Once you figure out your actual “essential” expenses, the rest of your money is all discretionary. You have two choices for the money. You can spend it on stuff, or you can save it and essentially buy time. If you save about 65% of your take-home pay, you can retire in about 10 years starting from zero. So once the essentials are covered, you get to decide how you want to prioritize spending vs. savings to optimize your happiness. I think if we moved to a smaller house, stopped buying organic, went to one car, and didn’t spend money on child activities, we can probably get to under $2000 a month. But that would be a lot of work and a lot of sacrifice. I think we have our discretionary spending vs. savings optimized to just about the right level at the moment, although moving to a smaller house is still on my to-do list for sometime after the pandemic.

No Netflix November

No Snacks September was a fun challenge which led our family to adopt new eating habits. I thought November offered an interesting opportunity to explore life without Netflix. Maybe this will be another change we will decide to permanently embrace…

Netlfix for me is a lot like junk food. I spend a lot of time on Netflix to relax – it is essentially junk screen time. Given that my job requires me to be on the screen for probably 10 hours per day, I really don’t need any additional screen time. There are also many other screen activities that are more productive and more fun like writing this blog.

The average Netflix subscriber spends 1hr and 11 min per day on Netflix but only 35 min bonding with their family. I am afraid my stats are even worse than the average. Maybe No Netflix November will help me be a better wife and mother…

The Child does not approve of No Netflix November. For this reason, she has declined my invitation to provide art for this post. I am glad she has clear opinions and refuses to participate in activities that go against her believes:0)

Three fallacies that will cost you money

Artwork by The Child

I am taking an MBA class, and I was reminded of a lesson that we should all keep in mind when making money decisions. Here are three ways in which our mind can play tricks on us that lead us astray.

Proportionate thinking:

Suppose you are shopping for a big-screen TV. You are a smart shopper, so you compare prices and discover that your local Best Buy has the exact TV you want for $3,999.99. Walmart, which is 15 min away, also has the same TV but for $3,989.99. Do you drive for 30 minutes round trip to save $10 on a $4,000 TV?

Now suppose that a Dairy Queen, which is also 15 min away, has free ice cream cones for the whole family, which you know normally costs $10 at your local Dairy Queen. Would you drive 30 min to get free ice cream for everyone?

Most people will not drive extra to save $10 when they are already planning to spend $4,000 because $3,999.99 is “almost the same” as $3,989.99. But these same people will drive the same distance to get free ice cream that is worth $10.

The fundamental question is, is it worth driving 30 min for $10 so the answer should always be the same, it is either worth it, or it is not. But the human mind gets focused on the proportion, not the absolute amount. So, when making a decision about money, try to step out of the specific situation and think about the principle.

This can get complicated very quickly, and there can be good reasons why the answer might be different in the two situations. Making a big purchase can be anxiety-provoking, and many people just want to get it done. On the other hand, going for free ice cream can be a fun family outing, and the drive can be part of the experience. Making a different choice in the two situations is not necessarily illogical, but it is still important to watch out for proportional thinking.

Ignoring implicit costs:

We recently considered buying a treadmill to use during the cold winter months. A basic treadmill is about $300. We could afford it. But then I started considering all the other “costs”:

-It will take up space the whole year while we will probably only use it during the two very cold months.

-We will have to maintain it and potentially service it if it stops working (which is likely if we are buying the cheapest model).

-If we move (which is likely), we will have to move it or get rid of it.

-We hope to move to a smaller house at some point, which will probably not have space for a treadmill.

-Eventually, this machine will end up in a landfill someplace where it will be for millions of years.

After considering all these other “costs,” we have decided to at least try some alternatives. Doing online exercise videos comes at no cost, no environmental impact, and can be done on demand. Of course, staying healthy is priceless, so if other options don’t work, we will reconsider the treadmill, but we will try the other options first.

Coloring money

We often make different decisions about money based on how we obtained it. Let’s take the treadmill example from above. Suppose I win $300 and decide that I can have the treadmill for “free,” so I buy it. This is an example of coloring money. I think of the $300 I won as somehow different than the rest of my money. But it is not. I could have afforded the treadmill before, but I decided it is not worth it. Just because I now have a different $300, this doesn’t change any of the reasons I decided it wasn’t worth it. You should use the same logic in spending these $300 as you use for any other $300. All money that you have is the same, no matter how you obtained it.

The decision parameters change if I actually win a treadmill. In this case, I can’t choose to spend the money on something else. My choice is to take the free treadmill if I think that the rest of the implicit costs after removing the treadmill’s actual cost are worth it or decline it and get nothing. If I were offered a free treadmill, I would probably take it.

There is sometimes space to negotiate that should be explored. Imagine your child has just finished their undergrad degree, they are finding it difficult to get a job, and you want to help. You are sitting for dinner, and your kid starts talking about some certificate program that they read about that seems like the kind of thing employers are looking for. The program’s cost is $5,000, and you jump at the opportunity to help your kid and say that you will pay for the program.

This situation is kind of like winning a free treadmill. The parameters for the kid is that she can get this program for free or get nothing, so she will probably choose to do the program. But is this the optimal way for you to help your kid? Maybe there is a different and better certificate that she wants to do. Or maybe she would rather use the $5,000 to buy a car, which will allow her to look for jobs in a larger geographic area. Or maybe she needs the money to start a small business. Your money may be much more beneficial to your kid if, instead of promising to pay for the certificate, you decide how much money you want to give to your kid and then have a conversation with her to figure out the best way to help. Depending on the kid, you could be completely hands-off and give her the money and trust she will make a good decision. On the other extreme, you might want to discuss with the kid, and once a decision is made, use the money to pay directly for the item you agreed on. Either way, that will ensure that your money is spent in the most impactful way possible.

Remaining completely logical when making money decisions is hard, but it pays to think hard about your behavior and realize that emotions sometimes cloud our judgment.

A new gadget in the funky kitchen that is totally worth it

Artwork by The Child

I like my kitchen pretty empty. A few years ago, we donated most of our kitchen appliances and any extra pots and pans. We haven’t owned a mixer, a blender, or a food processor in awhile. These things occupied too much storage space, and they were too hard to clean, so we didn’t use them much. We also never got an instapot or an air fryer. We have a pot, several pans, a rice maker (when it breaks, I probably won’t replace it), and a toaster oven, and that seems to be all I need to make food. The toaster oven was a gift from my in-laws and is possibly the most used appliance in the house. I do most of my baking in it, and there are sweet potatoes roasting in it as I type. If you don’t have one of those, you probably need it!

The other appliance that I use a lot is a submersible blender. This was also a gift from my in-laws. It does most things a blender can do, but it is much smaller and doesn’t need counter space. I use it to cream soups, make vegan cheese, and even to make pancakes. About 6 months ago, it broke, and for a few months, I refused to replace it. I stopped making some things that required it, and I made my pancakes by hand (a little lumpy, but after baking, they tasted just fine). Finally, last month I decided that it is time to replace it and I found this wonderful gadget to replace it with

KOIOS 800W 4-in-1 Multifunctional Hand Immersion Blender

It turns out this is my dream gadget. The immersion blender works great. You can also use the motor to power a very basic food processor—just one blade, super easy to clean and store. I already made hummus and a salad dressing with it, and I love it. I am not so sure about the egg beater. I probably don’t really need that, but it might work as a mixer in a pinch.


If you already have a high-quality bender and a multifunctional food processor that shreds and grates and has a gazillion attachments, and you already have a mixer, then this gadget will be an inferior duplicate of what you already have. But if you don’t like cluttering your kitchen and you want one thing that will do most of the things you need relatively well, this is a gadget for you! $39.99 and no counter space needed.

Contemplating becoming a single income household

Artwork by The Child

Funky Wife is a special ed teacher. In normal times, she mostly works one-on-one with students, sitting right by them, sharing pencils, and exchanging pieces of paper. Many of her students also have behavior issues making them more likely to defy rules or engage in impulsive behavior. This trimester she is working online, but it looks like that might not be an option for the following trimester. We hope she can stay employed part-time and continue to work from home, but there is a chance she will have to take a leave without pay.


We briefly considered the possibility of her actually going back to the classroom. There haven’t been many cases at her school. On the other hand, the schools in my county have only been open for in-person learning for a few weeks, and cases both nationally and in our state are going up, so there is no reason to believe that cases at the schools won’t go up as well. So, I think we have decided that her going to work in-person is not a risk we want to take.
The question of whether schools should be open for in-person learning is a thorny one. I fully realize that many kids do not learn nearly as much during online learning as they do in an actual classroom. Most of the learning The Child is doing happens with a parent sitting by her. I know there are many parents who either don’t have the time or the knowledge necessary to educate their kids. I also know that kids growing up in poverty are at a huge disadvantage, which compounds all the other disadvantages they have. And I know that most kids would be fine even if they get the virus.


On the other hand, both the students’ families and the teachers and their families may not be fine if they get the virus. And here again, poor students are at a disadvantage. They are more likely to live in multigenerational homes or to be cared for by grandparents, and their families are more likely to have preexisting conditions. Overall, I think a student is better off falling behind in math because they did online school for a year than losing their caregiver to the virus.


Teachers also didn’t sign up to be front line workers. A doctor or a policeman knows that they are embarking on a career that could put them in high-risk situations. A teacher doesn’t expect that to be part of their job. The same is true of paraeducators who often get paid just above minimum wage. Of course, this is also true of many other jobs which have suddenly become high-risk without a proportionate increase in pay.


So, back to our family. I don’t know what kind of choices we would have made if we didn’t have The Child, but at this time, I feel that our primary obligation is to her, and she needs her parents. Therefore, Funky Wife will not be returning to in-person work, and we will almost certainly experience a drop in income. Luckily, we already live on significantly less than we make, so our day-to-day life won’t have to change much. Also, we have enough savings that even if we have unexpected expenses during our single-income period, we should be able to manage.


Funky Wife enjoys her job, and I think she will be a little bit sad if she can’t work. For both of us, our jobs are much more than a source of income. Funky Wife loves to help students, especially the students that most people have given up on. She likes her colleagues, and she thrives on human interaction. She also knows that if she is not working, many household chores will fall on her, and she doesn’t like housework nearly as much as I like housework. So her not working is really not ideal, but at this point, we are grateful that we have this option. I feel terrible for people who feel that they need to go to work even though they are scared so they can pay their bills.

Money can seem really complicated. There are lots of books and blogs about investing, tax optimization, appropriate leveraging, etc. But there is actually only one lesson I want The Child to learn about money – live on less than you make! When you do that, you never go into debt, and your savings are always growing. When you are debt-free and have savings, you have many more choices about how you live your life, and that is much more valuable than anything money can buy.

Should you buy a Costco membership

Costco – the great warehouse store where your $120 membership gives you access to the wonders of 5lb jars of peanut butter and 8lb bottles of ketchup. Buying in bulk is cheaper, you get a back 2% of your spending at the end of the year, which usually covers your membership fee, so it is a great deal, right?


Well, not necessarily.

We had a Costco membership for several years, and we used it quite a lot. And yes, ketchup is cheaper per ounce than it is at our regular grocery store, and we did make up our membership fee in cash back at the end of the year. However, our grocery bill went up. “How is that possible if everything is cheaper?” you ask. Many of the things we bought were actually things we were never bought before, so we were not just replacing items we normally buy with cheaper alternatives, we were buying more stuff.


We bought only a few things at Costco that were actually a better deal on our normal purchases –I like their flour and their frozen fruit and vegetables and their toilet paper. The rest of our purchases were mostly snacks and pre-prepared foods and fancy water.


Costco has great snacks — large bags of popcorn, various chips, crackers, and cookies. They also have great soups, guacamole in single-serving containers (perfect for packed lunches), hummus, salsa, and naan. Costco bagels are better than those at most bakeries. And then there are the water and juice options. You will find the best deal on Izzy (our all-time favorite drink) at Costco. If you are going to eat all of those things, Costco is your store. However, all of those things added both to our grocery bill and my ever-expanding waistline. Not to mention the pounds of trash we added to landfills from all of those single-serving packages.

After NoSnack September, we discovered that life is better is you stick to the basic food groups, which for our family means fruits, veggies, and dried goods. Fresh fruit and veggies are not particularly great or particularly cheap at Costco. Our local coop often has the same or cheaper prices for organic produce that Costco has for conventional. I sometimes miss the packages of frozen broccoli we used to get at Costco. They are a great deal but certainly not worth the price of membership and the drive to the store. I pay a dollar more per pound at the coop and save a trip.


Costco does have good prices of bulk dried foods like chickpeas, lentils, rice, and flour. But it turns out Amazon comes pretty close. These items are easy to ship, and many producers, some of them Costco suppliers, sell their products directly to customers online. I don’t have to leave the house, and I have more choices.

Costco has great prices, but it also has many temptations. For now, I am staying out. The few dollars I could save are not worth the drive, and the risk I will walk out of there with 5 lbs of kettle corn. Someday, after the pandemic is over, I might ask a friend to take me to Costco a few times a year. There are also prepaid cards that you don’t need to be a member to use. Instead of rewarding you for spending more as membership does, these cards limit your ability to spend.


So, before you commit to Costco for the sake of saving a few dollars on 8 lbs of peanut butter, consider if you can really walk out of there just with the items you normally buy, if those few dollars are worth the trip, and if you even can, or should, eat 8 lbs of peanut butter before it goes bad.

Our September spending and No Snacks September report

September spending: Let’s start with the total: $3060. That is about $600 more than last month but we spent $600 on the Child’s Spanish lessons which is a biannual expense. If we ignore that big purchase, we kept our spending the same as August.

The Child is taking Spanish classes with Homeschool Spanish Academy and we love them. All classes are on Zoom and she gets to talk to native Spanish speakers. For $10 per hour, we consider it a great deal. The lessons come in prepaid packages and this package of 60 lessons should last for about 7 months at our current rate of two lessons per week.

Our other significant discretionary expenses were a modem that allows us to control what websites the Child has access to and a chair for Funky Wife who now works from home. These are some expenses related to Covid but they are actually less than our usual expenses for gas and parking that we have during non-Covid times.

I am also happy to report that our grocery store bill is down to $771 which I believe is about the average for a family of three. We are continuing to buy a mixture of organic and non organic produce but we have cut out most pre-prepared food. Cooking from scratch is definitely cheaper although it is more time consuming.

No Snacks September was a huge success! In terms of money, there probably weren’t much savings. Our snack spending went from an average of $183/month to $32 for September but instead of grabbing sleeves of crackers and bags of popcorn, we are now eating more apples and bananas which it actually more expensive but way healthier. Most importantly, the Child is eating more healthy food (and she wants you to know she hates it). I have even lost a couple of pounds. So with a 2 to 1 vote, we are keeping the No Snacks challenge for the month of October!

How did your September go? Link your spending below.

Allowing your kids to make mistakes with money

One of the hardest things for me as a parent is to watch my kid make mistakes and suffer the consequences. Now, I do my best to stop her from making any really big mistakes with big consequences — I make sure her seat belt is on, I don’t let her talk to strangers online, and I make her wear a helmet when she is riding a bike. However, when it comes to money, I am committed to letting her make mistakes, suffer the consequences, and hopefully learn. The consequences of money mistakes for a tween feel tragic, but they are still fed and have a roof over their heads. The same mistakes at 21 or 41 can get you in a lot bigger trouble.


For the last two weeks or so, the Child has been earning her own money to buy extras with. That includes snacks (we are no longer buying junk food, but of course, she is welcome to snack on apples for free), and in-app purchases. She gets 5% interest on any money she has left at the end of the day. She can earn $2 per day by doing her schoolwork and chores, but she can get overtime for doing extra chores.

With a 5% daily interest rate, the winning strategy is to accumulate some money, say $100, and then “retire,” making $5 per day just in interest. And because of the magic of compound interest, getting to $100 would take her just 25 days of not spending. In just 66 days of not spending, she can accumulate $1000, generating $50 per day and be completely financially independent! (OK, if she really got close to that, I would reduce her interest rate.)


Despite these amazing possibilities, for now, the Child is behaving like a typical consumer. She is doing a good job, “going to work” every day and earning her $2. So far, she has not elected to work overtime. Almost every day, some shiny in-app purchase tempts her, though, so her account fluctuates around $5. At the end of the month, some of her memberships will expire. I am not sure she will have the money to renew them. She also loudly complains about the lack of junk food in the house. Still, because we only shop about once a week, she has trouble accumulating enough money to buy enough junk food to last her the week (not that I am sad about this. I don’t really want her to buy junk food).


Of course, her behavior is very typical for many young (and not so young) adults. I know plenty of 20-year-olds who spend their weekly paycheck on the newest electronic or at the bar, and at the end of the month, they don’t have enough money to pay rent. Or 30 years-olds who have shiny cars but find it impossible to save for a downpayment on a house. Or 60-years-olds who have pulled out the equity in their home so often that they are still looking at another 25 years of mortgage payments and have no retirement savings to speak of.

At each stage, it becomes harder for a parent to watch their child suffer, and we all know of middle-aged adults whose parents still “help” them financially. I don’t want that for the Child. So, I will listen to her complain about the lack of junk food in the house, and I will let her memberships in her favorite apps expire and hope she learns this lesson early so in 10 years, I don’t have to worry about her becoming homeless because she couldn’t pay her rent.

If you have kids out of the house, now is a good time to stop “helping” them financially. That doesn’t make you a bad parent. They will feel better about themselves if they can figure out how to manage their own finances. If you don’t feel you can stop “helping” abruptly, you should plan with them on how you will gradually decrease how much money you give them and stick with the plan. Being a parent is hard work, but ultimately the goal is that your adult child truly becomes independent from you, and financial independence is a key step in that journey.

Teaching money skills to tweens and young teens

As the Child is approaching the ripe old age of 12, it is time to teach her to the skills she will need to be able to manage her money as an adult. As every teacher will tell you, to design a good lesson, you need to start with learning objectives. So what should a tween or a young teen know? Most tweens are ready to be introduced to all the complexities of money that they will need as adults. The amount of money they will earn, manage, and spend is, of course, smaller than those an adult would manage. You will also need to “speed things up” so they can see their money grow in a time frame they can follow. Earning 10% interest per year might be a reasonable return on investment for an adult, but a 12-year-old would have difficulty noticing such growth. Here are some basic money management skills you might want to teach and ideas on how to do it.

To make money, you have to do something. Set up a list of “jobs” that your child can do to earn money. We are allowing the Child to make money for doing each of her school subjects as well as doing chores and getting physical activity. She can earn about $1.50 a day for her “work” (we are probably breaking some minimum wage laws here). Each task she has to do is worth 25 cents. She gets a completion bonus of 50 cents if she finishes all her tasks for the day.

Consider overtime pay to give your tween or teen a chance to earn extra money. We pay double rate for additional chores. Also, consider performance bonuses for jobs well done. We pay significant bonuses for exceptional school performance. The Child made $10 this morning by getting an A on her Spanish test.

Some parenting books will tell you that kids should not earn money for chores but should have a set allowance because they should learn to aim for internal motivation. The child shouldn’t strive to get an A on the test to earn a performance bonus but to get the satisfaction of a job well done. While I understand this argument, I don’t think I can expect more from my child than I expect from grown-ups, and we all appreciate getting paid for our work, so I am OK with the Child being motivated by a performance bonus.

Once you have some money, you can get your money to work for you. There are two ways to think about discretionary income: extra money to spend or a tool to help you on your financial independence journey. Here is an example from the adult world. Two families get a $5,000 end-of-year bonus. Family A decides to upgrade their TV and their cell phones. A year later, they are craving an even bigger TV and even newer cell phones. Family B puts their $5,000 in investments. A year later, they have $6,000. We all know how this goes after 20 years. The family with the new TV will have no financial cushion and will fear retirement. The family who invested every year will be sitting on a couple of million dollars and will be in a position to choose if they want to work or take a trip around the world.

Consider paying interest to your child on the money they haven’t yet spent. For a tween, you might consider paying interest every day. As your tween grows up, you can move to weekly or monthly payments. Our 11-year-old will earn 5% each evening on any money she has left at the end of the day. If your child is a natural saver, use lower interest or longer intervals. The power of compound interest is amazing, so be careful not to overcommit.

You can’t buy everything. An essential adult money skill is the ability to prioritize and save for bigger purchases. To give your tween or teen practice, you need to stop buying everything for them. Of course, you shouldn’t stop buying anything they need, but you should cut back on funding their wants. We have stopped buying snacks and online subscriptions. The Child is generating a very long list of things she wants, and I am sure the list will keep growing as she discovers the power of money. Her many wants create the need for her to prioritize. She will also learn (we hope) that if she wants a $10 membership, she can’t spend all of her daily earnings on candy.

Debt is bad. I know some people will disagree, but in my opinion, all debt is bad. Really, really bad. And consumer debt to buy optional items is truly evil. Unfortunately, for most kids, the only way to teach this lesson is to let them get into debt and experience the pain for themselves. And for the pain to be real, you need to charge interest and have consequences if the debt is not paid on time.

One option is to secure the debt. The kid needs to give you something of value, which becomes yours if they don’t pay you back. I know I am not strong enough to stick to this rule, though, so instead, we are doing unsecured debt like on a credit card. The Child is allowed to borrow money at 10% interest per day. Her credit limit is $10. If she exceeds the limit, she will not be able to use screens or spend anything until her balance is under $5. An older child should have the ability to get into more significant debt which will take longer to get out of.

Those are the four main lessons about money that I think every adult should have mastered. What are you teaching your kids about money? How are you teaching it?