Flashback: Bounced Check

I was going through my binder of story ideas for my monthly Kidnexions Connection newsletter and found a post-it with a story about Nathan.  It’s a good thing I took the time to write the story down because I had forgotten all about it.  So here’s the first in a series I’m calling ‘Flashback’ as I remember or find things my kids did when they were growing up that relates to learning about money.

Sometimes we adults use vocabulary words that don’t always make sense to kids.  It’s hard to do it any other way, though,  since kids  arrive on this planet with little understanding of any words.

But as our kids get older it’s easy to forget that something that makes perfect sense to us makes absolutely no sense to them.  Take the words ‘bounced checks’.  It’s been quite a while since I’ve bounced a check, and that happened because a roommate of mine handed me her rent check without the funds to back it up.   My VERY FIRST mortgage payment in my entire life bounced because of that.  Lesson learned:  just because someone has a full-time job doesn’t mean they have any rent money.  And there’s a reason people collect first and last month’s rent.

But back to Nathan.  I’m not sure what the context was, but apparently I had used the words ‘bounced check’ while he was listening.  It was probably something like, “I can’t believe my VERY FIRST mortgage check bounced because she didn’t have the money to pay for rent and never told me…”  But whatever it was, he realized that bouncing checks was not a very smart thing to do.  

Apparently he’d been giving this some thought because he finally came up to me and asked,  “Is it okay to bend checks?”  (He does know what checks are.)  And honestly, I had no idea what he was talking about until he told me that he heard me say that bouncing checks was a bad idea.  It made me wonder what visuals went through his head when he thought of checks bouncing.

Love Animals? Turn Your Passion into Money

I was so excited when Angie, an eight year old in one of my money classes, announced that the flyers she and her mom had passed out the week before resulted in a phone call for her pet-sitting service.  And the gleam in Angie’s eyes as she described for the class how she would be feeding, walking, and playing with her two charges,  a yellow lab and a golden retriever.

“They’re such friendly dogs and so much fun to play with.  I can’t wait.” 

The week before, our lesson focused on ways kids can use their talents, skills, and interests to earn a few extra dollars.  They generated lists of ideas and identified the logistics of setting up their own small business such as how much to charge and what supplies, if any, they would need.

Using all this information the kids created flyers.  “We’ve thought about doing stuff like this before,” said Angie’s mom after class, “but we never got to the writing it all down part.  That’s what made the difference this time.”

Apparently it made all the difference to another student in class, as well.  Tess, a 12-year old, secured a job for the entire month of April and several weeks into May earning $5/day.  Her tasks involve taking care of three dogs, two horses, several cats, and a lama!  By the end of her time, she will have earned close to $250 which is the amount of money she wants to save for her Happy 13th Birthday trip to San Fransisco.

But what these two animal-loving kids are learning is that when you are doing something you love, getting the money is just the cherry on top of the Ghirardelli sundae!

How do your kids use their skills and talents to earn extra money?

Have a Spender? Give Them Strategies

“Uh oh,” said Gabby after tallying the Are You More of a Savor or a Spender? questions during my 5/6 money class yesterday.  She had answered every single spending question with a ‘yes’ which translated to: she liked to spend.  Hanging at the mall, well that was paradise.  And she’s only 10 years old.  

A lot of parents don’t realize the potential problem in their kids’ spending habits because, hey, they’re just kids and what kid doesn’t like to spend?  Kids who really like spending money when they’re 10 will probably grow up to be adults who really like spending money.   And if not kept in check, it could lead to serious problems.

Time for intervention.  What Gabby, and a lot of other kids and adults need, are strategies for their shopping trips.   These will help her when she finds herself surrounded by temptation.  (The first big hurdle, recognition, was discovered when she took the survey.) 

Here are some strategies we came up with:

  • Carry a limited amount of money when out shopping.  When the money’s gone, it’s gone.
  • Never borrow money.  In fact, make sure your friends know not to loan you money.
  • Shop with a list.  Never buy anything that’s not on the list.  
  • Follow the 24-hour rule.  Wait 24 hours, (some may need longer) and if you still really want it and you have the cash, then go for it.
  • Keep a record of what you buy and what it cost.  At the end of the week/month go over it.  Rate each item on a scale of 1-10, 10 being you would buy it again.  Make a concerted effort not to buy anything that was rated under 5 or 6 again…or at least, not for awhile. 

Now that Gabby has some strategies, she can head to the mall armed and ready to keep her spending under control.

But parents, you can play a role, as well.  Teach your kids the value of saving their money.  One way is by using KidsSave to introduce them to the power of compound interest.  That’s what worked for our youngest son.  When he realized he would end up with more money without adding a single penny, he was a believer.

Another way to encourage them to save is by setting up a little 401(k) plan and matching their deposits by a given amount.

Bottom line, most kids don’t know how to save and spend wisely unless we teach them.  And reaching the spenders early will not only benefit them but you as well.

Little Rationalizations Can Turn Into Big Rationalizations

Here’s something interesting a second grader came up with when we were working on the Water Wonderland activity.  I’ve written about this activity before, but for those who aren’t familiar, it’s when kids get to make spending choices and at the end of the activity those with enough money get to go to Water Wonderland.  The key is that the kids don’t know about WW while they’re making choices.  The point of the activity is to show kids how important our spending choices are because if we spend all our money on things we don’t really need or want, we won’t have any left for things we really need and want.

So I got to the part where I describe the unbelievably incredible Water Wonderland, which, as I tell the kids, doesn’t really exist.  But those with enough money get to “go”.  Well I was caught off guard for just a second as one really determined second grader announced he was going to take back all the things he bought, get his money back, and head off to WW!

I have to admit, it was pretty creative thinking.  This option had never occurred to me.  Nor, I’m happy to announce, had it occurred to any of the other kids I’d done this activity with.  Because, as we spent some time discussing, it’s not really the right thing to do.  

We discussed it in terms of what’s fair.  Second graders are all about fairness.  Is it really fair to open and play with a toy and then go and return it because you decided you’d rather have something else?

It’s really a lesson on teaching kids to be ethical.   And, judging by the recent economic debacle and many of those who got us into it, it’s a lesson that can’t be learned early enough!

Life’s Little Consequences.

Ryan just called me from school.  Apparently he left his grade check sheet at home this morning and needs it in order to try out for the track team this afternoon.  Hmmm.  Not wanting him to miss out on being on the team but wanting him to be responsible for forgetting, I asked if today was the only day for tryouts.  No, he could try out tomorrow.  That made my life so much easier.  He’ll be taking the bus home after school today and trying out tomorrow.

Do I have time to drive the sheet to him?  Yes.  I don’t teach today and am home working on a variety of things, none that need to get done NOW.  But part of my job as a parent is to teach Ryan to be responsible so that when I’m not around he has the skills to do it on his own.  This means that, not only will he miss out on tryouts today, but when he gets home from school we’ll strategize ways to help him remember to get things like his grade check into his backpack.  (He remembered to have me sign it…)

It’s the same with teaching kids financial responsibility.  We need to allow our kids to learn from smaller mistakes now so that they can avoid bigger ones later.  Let them buy the toy that you know will soon break or they’ll quickly lose interest in.  And when they lose their sweater or cell phone, let them pay for a new one.  When they’re using their own money, the consequences hit home quicker.  

But also give them strategies so that they can be better prepared in the future.  If a toy is really cheap, it may not be made well so be careful when making your choices.  When you take your sweater off at school always put it in your backpack.  

But, as with most things, we also need to be flexible.  If today was the only day of tryouts I would have driven his grade check to school.  Ryan is passionate about running and to deny him the opportunity to be on the team where he will learn a lot of other life lessons seems like a harsh price to pay.  I would have charged him for my time and mileage instead.

I know he is disappointed in missing out on today’s practice.  But when I told him that I wasn’t going to drive to school with his grade check he simply said ‘okay’ and that was that.  He’s had a lot of little life lessons in his young life.  There are days he’s gone “hungry” at lunch during school.  Or missed hanging out with friends because his chores weren’t done.  But he’s learning and accumulating a variety of strategies to help him make it through life just a little easier.  And that’s all a mom can hope for.

56 minutes later.  No kidding.  Nathan just called me from school.  Turns out his English assignment isn’t going to take as long as he thought so maybe he can go to golf practice after all and would I drive his clubs over to school for him.  Hmmm, again.

 We left it this morning that he would be coming home right after school because he was swamped with projects.   He “reminded” me that his coach said that school work comes first.  That’s my rule, too, but I expect my kids to plan out their life so that they don’t have to miss practice.

Anyhoo, we decided that he really needed the day off from practice to get his stuff done and done well.  So he left his clubs at home.

Now he wants his clubs because all of a sudden, life got easier.   Easier for him, maybe.  And besides, if he hadn’t played all day Saturday and watched movies with friends until midnight, he probably wouldn’t have slept so late and decreased his homework hours on Sunday.    Then this wouldn’t be an issue.

So I’ll have the pleasure of hanging out with both my boys this afternoon.

OMG! It’s Working!

Today was my last day with this particular group of second graders.  One of the girls, Lauren, came running up to me as I was setting up the day’s activity.  “I got a job!”  she announced.  But the gleam in her eyes really said it all.  Apparently, after last week’s lesson on special talents and skills, she went home and talked to her parents about doing some jobs around the house for extra money.  She got hired to take down and bring back in (!) the garbage can once a week.  And she would earn $2 each time she did it.

Very cool!  I asked her what she planned on doing with her money.  “I’m going to take the money to the swim meets on the weekend and buy something for my brother and me.” 

I hadn’t even finished relishing the news of one of my students getting her first job when Seth came over and said that he was “going to use my notebook and a calculator so I can see how many weeks it will take for me to by the Lego Indiana Jones video game.”

And then, one of the moms, after class, told me that her son Matthew was now thinking about the idea of saving some of his money.  Apparently he used to have holes in his pockets.

These stories are perfect examples that, given the opportunity, kids can and do learn to deal with money issues.   Parents often think that seven year olds are still too young to begin learning some of this stuff.  Holy Moley.  Now’s the best time.  Let’s get ’em when they’re young and really have an impact on their future financial lives.  And besides, not having to take down the garbage can each week is so worth two dollars.

Freudian Slip

I was working with a group of 4th and 5th graders on Pet Project, a project where kids get to take care of a pet for a year.  Part of the project requires kids to go through catalogs and buy things for their pet.  They need to fill in a real order form and write a check using some old checks I saved when I closed an account (with all important information blacked out).

They love this project because they get to make their own choices. They also love it because they get to learn how to write real checks and keep a running balance simulating what adults do.  As they were flipping through the catalogs, I overheard one of the girls say to her friend, “Why don’t you just bring it to work tomorrow?”  in reference to something she wanted to see.  Then she started laughing and said, “I can’t believe I just said ‘work’.  I meant to say ‘school’ but we’ve been sitting here doing all this adult stuff, it just slipped out.”

I love it!  That’s exactly what they’re doing…adult stuff.  One day they’re going to be adults and now is the time to get them ready. And what better way to learn than through a fun project that allows them the flexibility to make their own choices.  Because learning how to make good choices, well that’s another skill they’re going to need when they grow up!

Mission Accomplished

Spending money is easy.  Ask any kid.  For most, the list of things they want is endless.  And spending money is not bad, it’s just important to spend it wisely.  That was the idea behind a lesson I did with a group of second graders.  But I didn’t tell them that.  I thought it would be more fun if I tempted them and let them figure it out.

So I printed a whole bunch of stickers for items that kids would love to have. Having a friend who is a second grade teacher really helps.  She knows exactly what second graders are in to.  And amazon.com helps, too!

Then I gave them a starting budget of $25.  That’s a lot of money for a second grader. In came the temptation.  I described each item for “sale” in a way that even I wanted to have it.  But I also made it clear that they didn’t have to buy anything if they didn’t want to.

To keep it simple, there were certain parameters such as being able to only choose up to 2 items the first go-around.  Then, to give them a little extra money and underscore the idea of saving, I matched their balance at a particular point.  Those who didn’t spend much had more matching.  

We went through two rounds of spending, the second one included new items.  Then I threw in the kicker.  I described paradise.  Water Wonderland. All day with your bestest buddies.  12 slides.  Lunch under a waterfall. Swimming with dolphins.  Boat ride in the crystal caves.  You get the idea. And if you had the money, you could go.  All of a sudden some of those have-to-haves didn’t seem so important as about half the class couldn’t go to Water Wonderland.

Now my intent is not to depress kids.  I made it clear that Water Wonderland does not exist.  At least, I don’t think it does.  And, that if it did, I am sure they would figure out a way to get there.  But my goal of getting kids to understand that we have choices with our money really made an impact. Even on the kids who “got to go”.   Here’s what Ben had to say, “I learned that if I spend my money on things I don’t really want, I can’t get the things I really, really want.”  Fait accompli!

By the way, there were two kids who didn’t spend any money at all and had the funds to go to Water Wonderland.  They chose not to go because they didn’t want to spend any money.  Spending money wisely allows us to participate in opportunities that can enhance our life.  Not spending any money is not necessarily a wise choice.

For Sanity’s Sake, An Allowance is a Good Thing

I was in Michael’s yesterday buying key charms for my money management lesson on the keys to compounding.  With my 40% off coupon, of course.  I was behind a mom who I felt increasingly sympathetic for.  But not really because she allowed herself to be in the position she was in.

The mom was there with her two daughters.  They looked to be about 8- and 9-years old.  The older one asked her mom if she could buy one of the little toys that was on the display case we were standing next to.  “No,” was the immediate answer.  And then the inevitable, “But why?”  And the standard response, “You don’t need it.”   

Then the younger one chimed in, “Can I have something?”  I’m not sure why she thought she could get something if her sister was denied.  But again the mom went through the no-you-don’t-need-it routine.

So, taking a different approach, the younger one then asked if they could go to the Dollar Store and buy something.  That didn’t work, either.

It was all I could do not to grab the mom, swing her around, and tell her to give her daughters an allowance.  Not because I want her to give her kids money for the sake of having it but because I want her daughters to learn how to handle money.  The only way you learn that is to have money to handle.

The daughters need to learn on their own that they don’t really need that toy.  And they’ll learn a lot faster if you make them pay for the things they think they need.  

But there’s another benefit to giving your kids an allowance.  It provides parents with sanity.  The mom was obviously in an uncomfortable situation having to argue with her kids about not buying the toy.  If kids have money the only thing you need to say is, “Do you have the money for it?”  That toy is an “extra”. An allowance shifts all those extras right into your kids’ little hands.

And here’s one of the best parts.  An allowance is not putting out extra money.  It’s transferring money that you spend on your kids anyway and allowing them to make decisions about it.  As I mentioned, they become much more reluctant to spend their money.  That’s good.  It’s teaching kids how to make choices.

But the lesson those girls learned that day was if you badger mom long enough, she’ll give in.  Those girls left the store with the toy they wanted.