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 Other Literacy…Financial Literacy

We all know that literacy, the ability to read and write, is an important life skill.  It’s so important that we often create an environment at home to reflect this.  We start reading to our kids from an early age, years before they know how to read themselves.  We surround our kids with all kinds of reading materials from books, to magazines, to newspapers, to grocery lists. 
 
And then, to underscore the importance of reading even more, we read in front of them.  Yup, we pick up the newspaper or magazine and absorb the words on the pages while our kids are watching.
 
When they begin to read on their own, we ask them questions about the plot and characters. 
 
At school, monthly book orders are sent home and assemblies bring in authors who talk about how they write their books.  We even reward kids with stickers on classroom charts or refrigerators at home reflecting pages read. 
 
It’s hard to grow up in an environment such as this and miss the message that reading and writing is important.  

The Money Connection:   There’s another type of literacy which is just as important that isn’t quite as integrated into our environment.  Financial literacy.  Simply stated, financial literacy is the ability to effectively and comfortably deal with issues relating to money in a way that benefits us.  It’s important for things such as budgeting, understanding credit, and investing.  

We need to be just as passionate about our kids learning financial literacy as we are about teaching them reading and writing literacy.  But since financial literacy in the elementary and middle school curriculum is not where it should be, we’re going to need to do double-duty at home.  Without obsessing about money, this simply means that we need to be aware of opportunities to sneak in a few life lessons.
 
Here is a starter list of ways to create an environment where learning about money is simply a natural part of your everyday routine, thus underscoring its importance: 

1. Talk about money from an early age – how it is earned, how there is a limited supply, the importance of making good spending choices, how to be a good consumer, etc.

2. Just like a book is the tool we use to teach kids how to read, money is the tool we use to teach kids how to become good money managers.  Give your kids money on a regular basis (an allowance is the most popular way) and then have them be responsible for their discretionary spending.

3. Create a list of extra jobs kids can do around the house to earn additional money.

4. Share your savings goals with your kids and have them create their own.

5. Have tweens and teens keep track of their spending in a registry so they get an idea of where their money goes as well as learn how to keep a running balance.

6. As an incentive to get your child to save, offer to match their savings dollar for dollar.

7. Always look for teachable moments, such as being out shopping, to tie in important money ideas.

Kids learn to become good readers through reading.  By the same token, kids learn to be good money managers through doing money.  Providing your kids with money to manage and initiating on-going money discussions at home will help build the financial foundation so necessary for success in today’s society.

Teaching Kids to be Wise Consumers

Teaching kids to be wise consumers requires that we have them reflect on their purchases…before they spend the money. And an easy way to do this is to teach them the Three Money Questions:

Do I need it?
Can I afford it?
Does it add value to my life?

Do I need it? This gives kids practice in thinking about the difference between needs and wants. If the item is clearly not a need, and for kids this is the majority of their spending, then at least they have acknowledged that they are pursuing and willing to plunk money down for a want. Which leads us to…

Can I afford it? This one is simple – if you don’t have the money, you can’t afford it. This is a good opportunity to help your child create a goal and work towards it.

Does it add value to my life? This takes time to learn. Most kids will insist that they can’t live without the particular item/experience and will move forward with their purchase. Revisit their decision after several days or weeks by having them reflect on whether or not their choice truly enhanced their life.

The key to the Three Money Questions is to model them with your kids. When considering a purchase, talk through the questions out loud so that your kids can “see” how decision-making happens. It may seem silly at first, but if we want our kids to learn how to problem-solve through a potential purchase, they’re going to need to hear how that happens.

If your child is considering an expensive purchase, a good strategy is to have her create a pros and cons list. This helps to clarify her thinking in a very visual way. And it’s an unbelievably wonderful tool that she’ll be able to carry with her beyond simple money purchases. Should I marry this guy or not? Let me make a pros/cons list. Okay, I’m kidding, but you get the idea. 🙂

The Power of Relevance in Teaching Kids Money

Relevance is an unbelievable teaching tool. That’s because it’s much easier to learn something when it’s relevant to our lives. And, often, it’s more fun.

Consider a child studying a unit on growing plants in her third grade class. When the teacher starts talking about how healthy plants grow, her little ears perk up. This year, her dad put her in charge of he family vegetable garden, so learning about soil, watering, and weed control was meaningful to her; it had become relevant to her life.

The power with relevance is that it establishes a purpose for the learning. And when things have purpose, the learning becomes more powerful. So if we can connect the learning that kids are doing to their every day lives, in other words, if we make it relevant, then deeper learning and understanding will take place.

The Money Connection: If we want our kids to learn about and understand money – how to save it, share it, spend it, and invest it wisely – then we need to find a way to make it relevant to their everyday lives. And the best way to make it relevant? Give them the responsibility of managing their own money.

When they’re in charge, all of a sudden, learning how to effectively manage that money becomes meaningful and, by default, relevant. If they want to buy that really cool cell phone, then learning how to create a personal financial goal becomes relevant. If they want to invest in their favorite clothing company, then researching the company has now become relevant. And if they expect to save enough money to bring with them on vacation, then learning how to make good spending choices has become relevant.

When it comes to teaching kids about money, there’s no better lesson than to use the power of relevance. When it’s your money, it’s not that important. When it’s theirs, it’s a whole new story. And this story has a happy ending.

Dinosaur: A Very Large Dog with No Fur

I was participating in a webinar yesterday about kids and money. And by ‘participating’ I mean ‘listening’. That’s because I was cooking dinner at the same time.

The experts were a certified financial planner and an executive director in retail banking. They both had good things to say about kids and money. For example, they endorsed giving kids an allowance for the purpose of teaching kids how to effectively manage money. I’m all over that.

But, as someone with a child development background, I’m always amused…okay, I’m actually always annoyed, when adults try to take “big” words and simplify them for kids. For some reason, adults think they’re making things easier for kids.

Let me give you an example. When I taught elementary school, it bothered me to no end that math textbooks called 3 + 2 = 5 a ‘number sentence’. What the heck? It’s an equation…both sides of the ‘equal sign’ have the same value. What do you mean, ‘number sentence’?

Actually, I know exactly what they mean. Adults think that since kids are learning about writing sentences, they learn that a sentence needs to be complete. Beginning, middle, and end (or, if you prefer, subject and predicate). They think that kids can make the connection between what they’re learning in language arts and math. Oh, I get it. It’s a number sentence…just like when we write sentences during writing centers.

And maybe kids do make the connection. But why not just call an equation an equation?

I did an experiment when I was working twice a week in a K/1 classroom. I started to call all the ‘number sentences’ equations. At first, it was amusing to hear the kids try and get the word out of their mouths. But it didn’t take long for that to happen and pretty soon an equation had become an equation.

So here’s my issue with last night’s webinar (which otherwise I thought was pretty good). The experts were using the terms ‘money in’ and ‘money out’ to help kids understand what deposits and withdrawals were. I don’t have a problem with that as long as the “helpful” words are tied to the real definitions. In other words, if you say to kids, “To buy that, you’re going to need to take money out, withdraw money, from your account.” Eventually, the words ‘money out’ and ‘money in’ are dropped.

But I never heard the words ‘withdraw’ or ‘deposit’. So at what point do these experts think we should begin calling a deposit a deposit? And, to potentially add to the confusion, ‘income’ and ‘expense’ could also be considered ‘money in’ and ‘money out’. Now what?

We don’t help out our three-year olds by calling dinosaurs ‘very large dogs with no fur’. We call them dinosaurs and they manage quite nicely.

So let’s call it what it is. And you may be pleasantly surprised at how well they can handle it.