The Mystery Charge – A Teachable Moment

The cell phone bill came in.  It was a little higher than usual, not by much, but enough to get me looking for the reason why. 

I consider the cell phone bill a fixed expense.  Technically, it’s not since there is always the possibility that we could go over minutes at which point the charges skyrocket.  I know this.  Two teenage boys with their first girlfriends and, well, let’s just say they finally understood what I meant by girls can be expensive

But even so, we pretty consistently pay around $98/month, give or take a few pennies.  So it’s a fixed expense in my budget.

Both boys pay for their portion of the bill.  John and I take care of the family plan charge which leaves the boys with their $10 extra line charge and $5 unlimited texting fee.  That plus taxes and surcharges and the kids each owe me $17.04 monthly.  It’s a steal, really.

I located the extra charge.  It was for $5.99 and showed up under Ryan’s portion of the bill.  Ryan recently upgraded to a new phone.  His second in three years.  That’s what happens when kids have to pay for their own stuff.  They discover that they really don’t need the whiz-bang latest technology.  The old stuff works just fine, thank you very much.

Since the rest of us were not charged this fee, I figured it had something to do with Ryan’s new phone.  But instead of me picking up the phone to figure out what was going on, I decided it was time for Ryan to handle his own inquiries.  He’s 15 and quite capable.   He was also quite willing.  Again, when you have to pay for your own stuff, a $5.99 charge is worth looking into.

So he dialed the number and talked with the representative.    Here’s what he found out:  Apparently, out of the goodness of their hearts (it wasn’t in the contract), TMobile decided to enroll him in their insurance plan for his new phone.  It was $5.99 a month and would cover the cost of a new phone minus the $40 deductible (he’s familiar with deductibles) should he lose his.  He asked me what he should do.

“Have you ever lost your phone before?” I asked him.

“No,” he replied.

“Well, there’s always the chance that you will.  Is it worth it to you to pay six dollars a month on top of a $40 deductible should you lose your phone?   That’s up to you to decide.” 

I could tell he was thinking really hard about it.  He had his old phone for three years and never lost it.  He’d been scared that he had a couple of times, but we always found it.  Besides, his new phone cost him $150 plus taxes.  Minus the deductible, that would leave $110 that he was insuring at $6/month.  He decided it wasn’t worth shelling out the additional money. 

He finished his conversation with the representative who reversed the charges for him.  But the lesson is not over.  When the next bill comes in, I’ll have him confirm that it was reversed.  

Dealing with this sort of thing is definitely not fun.  It’s time-consuming and a hassle.  But I’m thrilled that both boys are at the age where they are capable enough to handle these on their own.  It puts them one step closer to being ready to go out in the world on their own…and do okay.  Sort of a bittersweet moment for me.

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Money Reflections

Excerpted from Beyond the Piggy Bank, a 15-Day Challenge

One of the goals for this Challenge is to develop healthy attitudes about money in our children. Since YOU have the greatest impact on what your kids learn about money, it’s important to take a little time to reflect honestly on the money messages you are sending them.

Ask yourself the following questions. To help clarify your thoughts, you may want to write your responses down on paper.

~What is my attitude towards money?
~Is money a good thing, a bad thing, am I indifferent about money, does money annoy me, is more money better, do I complain about money a lot…
~Why do I feel this way about money?
~What attitude about money are my kids observing in me?
~Which money personality reflects me the most?

–Worrier: I’m always fretting about money
–Carefree Spender: I love spending money. I’ll deal with the consequences later…maybe.
–Penny Pincher/Hoarder: I’m not worried about money, I just don’t like spending any.
–Giver: I’m always buying stuff for my friends and giving them money. I’ll worry about myself later.
–Saver: Yippee! I get to balance my checkbook and maybe put some more into my Roth IRA.
–Avoider: Honestly, do I really have to think about managing my money?

~What are the pluses about my money personality? What are the minuses? How can I improve the minuses?
~How do my kids see me manage money? Am I happy with that? If not, how can I change?
~How would I like my kids to manage money when they are older?
~What money attitude would I like my kids to have as adults?

Once you reflect on and understand more about your own personal feelings towards money, you are in a better position to help your kids develop healthy money attitudes.

Teaching Money Values

We impart our values to our kids through our words and our actions. Mostly our actions. Take a moment to reflect on the things you value. Integrity, compassion, honesty, persistence, courage, patience… Now think about an action that can be associated with each one. For example, returning the unpaid can of tuna you discovered in the shopping cart ~ honesty. Or volunteering to speak at the board meeting even though the thought of speaking in front of people makes you mildly ill ~ courage. 🙂

Now think about the kind of values you want your kids to live by when they grow up. Since kids do most of their learning through observation (they’re quite good at it!), it’s important to think about the messages your behavior is sending. Are you living the values that you want to help define your kids as adults?

The Money Connection: Our values are also imparted to our kids through the way we handle our money. We teach generosity when we share with those less fortunate than us. We teach responsibility and delayed gratification when we put a little of our money aside for the future. And when we splurge on a fancy dinner out we teach that it’s good to enjoy, as well.

Conversely, shopping impulsively teaches kids that the value of a dollar is not important. Not to mention the messages sent about lack of self-discipline. And holding too tightly onto money teaches kids that experiencing life is not important.

So take time every now and then to reflect on the choices you make on a daily basis. Because how you live life is how you live your values.

The Cell Phone: A Powerful Learning Tool

There was a huge graphic of a cell phone on the front page of the Sacramento Bee this morning. It was all about the love affair tweens and teens have with their cell phones confirmed in a study by Pew Internet and American Life Project.

If you have a tween or teen, this is not front-page news to you. But I thought it the perfect opportunity to re-print here a section from Raised for Richness, my parent kids and money primer:

Parents have been handed an unbelievable tool to help teach their tweens and teens money management. The cell phone. Yup. That object of love and hate. Done correctly it becomes an object of learning. Here’s how.

Teens need to stay connected to their friends. This is normal as they figure out their place in the world. Cell phones keep them connected. Using their “need” for a cell phone as the motivator, we can teach them basic money management skills such as budgeting, paying bills, and living within your means.

First, tweens and teens need to know that along with a cell phone comes responsibility. Keeping track of your cell phone, resisting the temptation to text during dinner, and paying your phone bill. Kids paying bills? You bet! And the best time to teach them is while they’re still hanging out with you. At least you’re not going to turn the heat off on them!

Next, it’s important to establish what part of the phone bill your child is responsible for. For example, you may pay the family plan fee but maybe your teen pays the additional phone line fee, texting, and any upgrades. If your child is old enough, you can even see if the bill could go go directly to her.

If you haven’t set up an allowance yet, this is the time to do it. Most kids don’t have jobs so it’s important to get money in their hands for the purpose of learning how to manage it. You can tailor the amount of allowance based on the responsibilities that come with it.

Now comes the fun part. Kids learn to manage their money in the context of something they love…their cell phone! Upgrades? They pay. Overages? They pay. New phone? They pay. Lost phone? They pay. Unpaid bill? No phone. See how simple it is? Okay, so it’s going to take a few months before everyone understands how the whole thing works, but when that happens, it’s a thing of beauty. Kids are happy; as long as they pay the bill, they stay connected to friends. Parents are happy; their kids are learning real life skills. It’s another win/win.

You may even find that your kids become pretty savvy consumers. Just how important is it to have the latest phone with all the gadgets? When it’s their money on the line, the difference between needs and wants takes on a whole new meaning! And that got-to-have-phone may be the perfect time to introduce them to the idea of setting a financial goal.

It’s true that some parents feel the peace of mind that comes with a cell phone is worth paying for the phone themselves. But wouldn’t you also want the peace of mind knowing that your child is ready to take on the financial challenges that await her out there? Don’t miss this silver-platter opportunity. With tweens and teens, they’re few and far between.

What are your thoughts?

Is It Worth It?

Ryan just spent $204.44. He didn’t do it lightly. That’s because he knows just how long it took him to earn that money. His one-day-a-week paper route earns him $11/week. That’s 19 weeks of folding and throwing papers.

But he also gets $10/week in allowance. Enough to help him get some of the things he wants, but not everything. (That explains the paper route.)

With the allowance, his total time was reduced in half. To a 15-year old, that’s still a long time. The good news is, he had the money saved already. But knowing the work hours needed to spend the money is a good way for kids to understand the value of the dollars they’re considering spending.

Ryan came in to my office this morning wanting to know whether he should buy an iTouch, which was $180 (minus shipping). I had no idea he was considering this; I don’t even know what an iTouch is. But Ryan rarely spends his money, so I was glad to see that something had piqued his interest.

“What are the pros and cons of getting the iTouch?” I asked him.

We set out to make a list. This is an excellent way to have kids think through a decision.

His pros:
-the iTouch can use lots of apps
-30 hours of battery (his current iPod is so old he only gets one hour of use out of each battery charge)
-it’s more stylish
-it holds 8 gigs

His cons:
-the $180 cost (he told me this counted as two cons)
-he already had an iPod
-he doesn’t really need the 8 gigs

I was leaning towards having him buy the iTouch but I didn’t want to make the decision for him. Then he throws out, “Or I could get the iPod nano fifth generation which is $60 cheaper.”

He said that he wouldn’t be able to have the apps on the iPod.

“You really like playing games,” I reminded him and his eyes lit up.

“That’s like the main thing,” he replied. That’s when I knew it was the iTouch or nothing.

Letting go of money can be just as hard for some people as saving money is for others. Teaching kids this balance is important. I couldn’t stand it any more.

“Buy the iTouch,” I said. “You’ve worked hard for the money and deserve to spend some of it on something that you’re going to get a lot of joy using.”

Within five minutes I received an email from eBay for the purchase of an APPLE IPOD TOUCH 3RD GEN 8 GB MP3 PLAYER WI-FI + BONUS.

I’m not sure who is more excited about the purchase. Saving money is good. But knowing how to spend it wisely is just as important. I’m glad to see that Ryan is developing this healthy balance.

Tapping Into Kids’ Desires to Be Grown-Up

One of the best ways to teach kids anything is to get them actively involved. Take check writing, for instance. Although most of us have turned to online banking as a way to pay bills, there are times when the only way to get money to someone is through a check. This actually happens a lot to parents: soccer sign-ups, picture day, fee for art class supplies, field trips, and on and on.

So the next time you find yourself pulling out your checkbook, instead of you filling in the information, have your tween or teen do it. Of course, the signature will still need to be yours.

And here’s something fun. Have your child practice his/her signature. Tell them their signature is unique and is an expression of who they are. They’ll be using it on many important documents, like checks, when they’re older. Practicing their signature makes them feel grown-up. Let’s tap into that to teach them an important life skill.

You Can’t Do That Yet

I was back in Michael’s picking up glitter stickers for a money activity I’m doing this weekend. As I was deciding between the funky flower stickers and something a little more “masculine”, a little boy, about the age of 4, appeared at the end of the aisle. He was looking at a wooden train that was packaged and hanging on display.

He stood in front of the train just staring at it. I love 4-year olds and how they “do” life. He was obviously taken by the train even if he couldn’t use words to explain it. Then he reached up to touch it.

“You have to paint that. You can’t do that yet,” came grandma. She said it so matter-of-factly that I was a little taken aback.

I felt a little for the boy who kept staring at the train. It looked like a cute little painting project that the kid would have fun doing that afternoon.

Grandma took his hand and walked down the aisle I was standing next to. I went back to contemplating stickers when the boy showed up again next to the train. I looked for grandma. She was still at the end of the aisle. When she discovered he was back with the train she said, “You have to paint that. You can’t do that yet.”

That’s when I surreptitiously grabbed a piece of paper from the bottom of my purse and wrote down her quote. She had said the exact same thing twice. And that’s when I started thinking about it.

The kid was four years old. Unless the grandma expected him to come out of the gate painting like Picasso, he was going to need practice. And the train project was perfect practice, one…because the boy really, really liked the train, and, two, because that train would be the cutest thing ever when he finished with it. It would make the perfect gift for…a grandma.

I was getting a little annoyed with grandma.

So the kid leaves again with grandma and…a few minutes later (I’m really glad I was having such difficulty deciding on the stickers), he comes back again. This was the third time this kid stood in front of that train. I was SO TEMPTED to buy it for him myself.

Then back tromps grandma ready to rain on his parade once more. Which is precisely what she did. Just like a broken record I heard the familiar refrain, “You can’t do that yet.”

It’s not my place to interfere with grandma’s “raising” of her grandchild. After all, she wasn’t being abusive in any way. Grandma loved him and simply didn’t think he was “ready” to paint a wooden train.

But as I was standing there, all my child development training came flooding in…as well as my natural instincts. How in the world is this kid ever going to learn how to paint if he’s not given the opportunity? But what really got me was the fact that this little boy wanted to paint the train. He was interested and motivated. That’s the PERFECT opportunity to teach someone a new skill. Unfortunately, it was a missed opportunity for this little guy.

And it got me thinking about expectations for our kids. If we don’t think our kids can do something, then chances are they won’t be able to do it.

I used to see this a lot when Nathan and Ryan were little and we were at a playground. It always surprised me how many parents would not let their kids climb on certain equipment because they didn’t think their kids were “ready”. With support and guidance and a hand to reach out if necessary, it’s really amazing at what our kids can really do.

So my thoughts then turned to kids and money management. If we don’t think our kids can learn about money when they are young, then the chances are they are going to grow up without the skills needed to effectively handle money. And just like learning to paint well, learning how to manage money takes practice. Lots and lots of practice.

Like the boy and his fascination with the train, kids are fascinated with money. Not in an obsessive way but in a curious kind of way. It’s the perfect opportunity to tap into that interest and teach them money.

I was a little sad as I left the store with my stickers; I chose the glittered flowers because they were a little bright spot in an otherwise rainy day.