One Step Closer to Adulthood

Nathan got his first checking account complete with checks and debit card.  It’s time for him to move on to the next level of money management.  At 16, he needs experience depositing, cashing, and writing checks.  He also needs to learn to use “plastic” money in the form of a debit card.

I like debit cards.  They’re convenient, practical, and as close to using cash as you can get.  That’s because the money is pulled directly from his checking account so the funds need to be there.  Okay, so banks have figured out how to eek more money out of us by charging overdraft fees.  The key is that Nathan needs to be vigilant about keeping track of his income and expenses in his registry.

Unlike females and their purses, carrying around a checkbook is not something he wants to do so he’s going to need to come up with a plan.  He used his card yesterday and, good boy, recorded the expense.

If he proves he is responsible with his checking account, and there’s nothing that would lead me to believe he won’t be, the next stage is a charge card.  Unlike credit cards, charge cards need to be  paid off each month.  I love the built-in consequence of not being able to use the card if the balance is not paid.

Eventually he’ll move to a credit card.  But right now he’s enjoying the feeling of being all “grown up”.

You GO Girl, and Girl, and Boy

Imogen got a $3 raise in her allowance.  Allison needs to prove that she can feed the cat and clean her room without being reminded and then she, too, will get a raise in her allowance.  Matthew got an allowance for the first time.

I couldn’t be giddier.

Getting money into the hands of kids on a regular basis is the best way to teach them how to manage their money.  An allowance, because it’s consistent, does this. And when I get that message across to kids and then their parents, it makes me feel like there are that many more kids who will be ready to take on the financial challenges that await them.

It starts with a conversation.  But unlike parents talking to their kids about allowance, because my class is made up of kids, I have to get the kids to talk to their parents.  Role playing is a fun way to practice.  And if props are involved, it’s even more fun.

We come up with a list of reasons why having an allowance is important and what responsibilities the kids will take on as a result.  Allison used the argument that she needed to practice money management and therefore was willing to pay for all her rabbit’s supplies in addition to buying her own Webkinz.  Her current allowance wasn’t going to be enough to cover all her expenses.  Her mom agreed.

All Imogen needed to say was that she wouldn’t bother her mom for money any more.  Done.  (Her mom’s going to find out she should have done this years ago!)

And now Matthew is getting money in his hands on a regular basis for the first time.  He’s excited about showing he’s responsible enough to make good decisions.

Talking to your parents about getting an allowance or a raise is probably not an easy thing for most kids, although my guess is there was probably a well Mrs. Hodgens says somewhere in their talks. Fine with me.  I did say.   I’m proud of them for doing it.  And I’m proud of their parents for listening to them and giving them a chance.  I believe they will be pleasantly surprised.

A New Discovery

Ryan’s been bugging me for years if he could sell stuff on eBay.  I’ve always given him permission but he needs my help to get him started and we never got around to doing it.  So last week, when he asked me yet again, I decided it was time I put down whatever I was doing and help him out.

He’s made $61 in the past week selling two items.  Subtract the shipping and listing costs and he’s still up over $50.

I’d write more but I’ve got to go scour my closets for things to sell on eBay.

It’s Just That Easy

Ryan and two of his friends were hanging out the other night.  Earlier in the day before either friend came over, Ryan had been MySpacing one of them about buying baseball cards on ebay.  His friend had bought a Willie Mays card several months ago as an investment.  According to him, it has already increased in value.

That’s when Ryan’s little ears perked up.  Ryan is all about investments.  He knows he has time on his side and he’s willing to wait.  He wanted in on this baseball card investment thing.  I told him to make sure, as always, that he does his research before putting any of his hard-earned money on the line.  I trust him to do that.

True to form, Ryan spent some time researching a baseball bat signed by Willie Mays.  He was tempted to plunk down $300 and wait it out.  But after emailing the seller and discovering that the sale was final, he decided not to do it.  It just didn’t sit right with him.  And $300 is a lot of money.

$4.25, on the other hand, is not a lot of money.  When his two friends came over later that day they checked out several other baseball cards.  I was busy doing something else and figured they were having fun discussing cards, ebay, and investments.

That’s when Ryan came to me and asked me for my paypal account number.  Excuse me?  Apparently, his friend decided to add on to his collection and Ryan allowed him to buy his card using our ebay account.  In all fairness, we’ve done this before for one of Nathan’s friends but have long since retired that habit.  Ryan did not know this.

I now found myself in an awkward position.  I didn’t want to embarrass Ryan in front of his friends.  Unfortunately, I was so shocked that they had bought the card, I forgot to check my comments at the door first.  “Are you kidding me??  Absolutely not,” I blurted out.

All’s well that ends well.  I tried back peddling which never works, but paid for the $4.25 using my credit card.  Then I had Ryan pay me the $4.25 in cash.  I’m pretty sure his friend is good for the money, but I’d rather not be the one waiting around for it.

This little incident got me thinking about how easy it is for kids to buy stuff online.  Especially if they know their parent’s password.  But password or not, what are kids thinking about money when either they or their parents place orders on line?  Is there a connection between the hard work done to earn the money and the item that was bought?  Has technology made things so easy for us that it’s really making things harder?

And should parents be filtering their children’s access to “spending sites” just as ferverently as they filter their access to “adult” sites?

Some things are just too easy.

Really? You Can Save Money?

“What else are you supposed to do with it?”  was the answer I got when I asked one of the kids in my math camp why he spent all his money.

Matthew earns a weekly allowance for doing his chores.   He loves video games and spends most of his money on those.  He’s not a big saver.  In fact, he’s not a saver at all.  Apparently he didn’t even know he could save his money.

Matthew is 9 years old and he’s already learned that money you earn simply gets spent.  That doesn’t mean that somewhere along the line he won’t be introduced to the idea of saving, it’s just that in the interim, he’s going to lose out on valuable time.  And maybe even make some big mistakes.

Does that mean we should we be requiring that 9-year olds save some of their money?  I personally think putting aside a small amount on a regular basis, even at 9 years old, is a good idea.  Hey, one day they’re going to want to be driving around town on their own four set of wheels…not to mention owning a home.  And don’t get me started on their retirement.  The sooner they get in the habit of saving, the better prepared they will be.

Research tells us over and over that most of our money lessons and habits come from our home environment.  The fact that the idea of saving hadn’t ever been introduced to Matthew is a little disconcerting to me.   We need to find ways to reach these kids and teach them healthy saving and spending habits.  And then maybe they’ll go home and teach their parents.

One Dog, Two Families

Here’s something creative.  My brother was sharing with me the way two families he knows handled their want of a dog and the recurring expenses that comes with it.  They share the dog.  One family gets to play and bond with Fido one week, and the next week, family number two gets the pleasure.  Food and toys are each individual family’s responsibility; expenses for medical needs are shared.

This is a first for me.  It actually never occurred to me that two families would want to share one dog.  But after a little thought I realized the beauty of their situation.  And from a money management perspective, it’s a win/win.  Why not share a dog?

I do an activity in my intermediate money class where kids get to choose a pet then “take care” of it for a year.  It’s all done in two class periods but by the end the kids have an appreciation for the money side of owning a pet.  Month-by-month kids, using their pet allowance, get to pay for food, toys, shots, medicine, and all the other expenses that come with owning a pet.  And since life happens in unpredictable ways, along the path of taking care of their pet, they may find themselves with an extra unplanned expense…their dog may eat the Sunday paper and need emergency care.  The kids need to make sure they have the funds in their budget for these unexpected expenses.

This project is a highlight for the kids.  They look forward to it each year.  They love going through catalogs and placing orders.  They learn how to write checks and balance a checkbook.  They also learn how to make choices between items they want for their pet.  After all, you can’t have everything you want.  We don’t do credit cards.

But owning a pet is much more than buying it food.  It’s often a very joyous experience.  Pets provide unconditional love, fun and happiness.  Pets are true family members.  That said, however, they are also a part of our budget and the money side of the equation needs to be considered.  That’s why I think it’s wonderful that these two families worked together creatively to come up with a plan that would allow them the joys of pet ownership with the security of shared expenses.  But the real winner is Fido.   To be loved by two families!  I wonder if excessive tail wagging could become a medical expense…