You all know that this is a blog where I chronicle my adventures in teaching my kids about money. I started out writing about things I understood well. But now, as I learn, I write about my adventures to help others learn even more.
Hannah, my daughter, is moving to France in a few days. She will be living there for a year, without returning home. Hannah has a few prescription medications that she takes so she needs to stock up on those to take with her to France.
Hannah took her prescriptions to get them filled at the local grocery store, which is where our family normally fills its prescriptions. Hannah soon learned that the medicines were going to be very expensive. The prescriptions are very expensive because our family recently moved to a health care savings plan, which allows our family to significantly reduce our health-care premiums but as a result, we pay for more of our health care expenses out of our own pocket. So Hannah’s prescription is now very expensive.
Hannah, being the self-sufficient teenager that she is, took the prescription to the first pharmacy herself. The pharmacy called her soon after and told her that the price of the prescriptions medicines would be fairly high. I love that the pharmacy didn’t call me. They called HER. Hannah came to me and asked what she should do. Hannah has such great familiarity with money and budgets now that she also knows that one hundred or two hundred dollars is a lot of money to spend on a prescription.
Our answer to Hannah was that we would pay for the prescription, since doing so under our smaller premium plan was still cheaper than the prices, in total, under our old health plan. But we told her she had to shop around.
We gave Hannah some guidance. We told her to call the likely suspects: Target, Walmart, Costco. And Hannah did just that.
Hannah learned that our local grocery store would be the cheapest on one prescription but that Costco would be the cheapest on the other two prescriptions. She came and gave us that information. And then she followed through. She called the grocery story pharmacy and asked the pharmacist to fill one prescription but not the other two. Hannah picked up the unfilled prescriptions and, with the help of her dad, took them to Costco and got them filled.
Hannah found the lowest cost prescriptions and saved our family some money. She learned to shop around and find the cheapest price on exactly the same product. And she learned more about how crazy our health care insurance system is here in the United States.
I am very proud of her.
Justine
Jon’s spring break trip to the beach – Part 2
April 3, 2009
Jon leaves tomorrow for his spring break trip to the beach. Jon paid for his lodging on this trip by himself. It was good and cheap and a great way to get a teenager to pay his own way for a vacation.
Jon and I had discussions regarding other money topics and this trip this week. For example, there was the question of who would pay for food. Jon knows that in our family, we parents feel like we should pay for our kids to eat. So even if he is going on a spring break trip, maybe I should pay for the food. So I told Jon that I would pay his portion of the grocery bill for the week. The chaperoning mom has determined that she is going to buy all of the groceries for the entire household and split it up at the end of the week and invoice everybody. I thought that was a great solution and I told Jon I would pay that portion of his expenses.
Even so, I told Jon that he needs to bring his extra spending money. This is his trip, not mine. So go-karts, ice cream, entrance fees, pinball machines – those are Jon’s responsibility.
Jon and I reviewed how much cash he should take with him. We also reviewed the fact that he use his credit card when and where he can – that by using the credit card, he gets the opportunity to borrow the money, interest-free, from the credit card company and give up the cash later. Jon likes that idea.
So Jon is taking some cash and his credit card. A shirt, some swim trunks, a boogie board. I think that is all a thirteen-year-old needs to encounter sheer, utter happiness during spring break.
Justine
Jon’s spring break trip to the beach
April 2, 2009
Jon, my thirteen year old, is leaving for the beach on Saturday. It’s gonna be spring break and he will be gone for a week.
The lucky dog is going to be in a big front row beach house, on a Carolina beach, with about ten high school girls. It’s crazy, I know. Jon’s friend, T., finagled his way in on the trip when his older sister, who organized the trip, couldn’t fill the house with enough girls. T. told his sister that he would help her out if my son, Jon, could come as well. Don’t worry, their mom is chaperoning. But it sounds like a great time for my 13-year-old, doesn’t it?
So the opportunity came around in January. The mom said that T., the little brother, could go if he paid for his half of a spot, at the price of $100, with his own money. And that he would need to bring a friend to fill the other half-of-a-spot. Lucky Jon got invited.
The boys each take half-a-spot because they will be sleeping on sofas. The girls get real beds and bedrooms. The boys don’t care – they just want to be at the beach.
When the mom and T. pitched the idea (to me first, to get my permission, and then to Jon), I told Jon that he was paying for his $100 spot by himself. If T. was paying for himself, Jon was paying for himself, as well.
Jon was so enthusiastic. He didn’t blink and said, “Sign me up.”
T.’s older sister said she needed the money in a few weeks’ time. I told Jon that he should get it to her now. He had the money and the sister needed to collect and get the deposit made on the house. I explained to Jon the importance of money in demonstrating commitment. Jon got that, immediately, and took the $100, in cash, to the sister the next day.
And now Jon is getting ready to go to the beach. And he paid for it himself. At the age of thirteen. Awesome.
Justine
Grocery Shopping
March 28, 2009
Do you take your kids grocery shopping?
Grocery shopping is a great way to teach your kids about money. They can look at prices, compare prices, determine if an item is expensive or not.
I’ve always had people tell me that one should not shop at the grocery store if they are hungry – go on a full stomach!
Good lessons to think about in teaching our kids about money.
Justine
Hannah’s spending money for two weeks in France.
March 19, 2009
Hannah is going to France in a few weeks. She will be an exchange student living in French families’ homes for two weeks.
Hannah needs spending money while in France. Hannah has her own money – she works and gets an allowance, so she has money to spend in France. Hannah’s father and I are not giving her any spending money. We paid for three-quarters of the cost of the trip. We required Hannah to pay for one-quarter of the trip.
But David and I WILL give Hannah money for the meals that are not covered by the cost of the trip. We believe that as Hannah’s parents, we should pay for her reasonable cost of food, even if she is on an educational exchange trip.
So we’ve asked Hannah to write a detailed request for spending money for food. Hannah has determined that she would like that money in her checking account so she can access her food money as cash from an ATM machine while in France. We are amenable to that, but Hannah needs to spell out the request. We will advance her the cash prior to the trip, and then interview her when she gets home to make sure that what we gave her approximated her actual cost of meals while in France.
I think that works.
Justine
A parental act that was generous and randomly kind
March 11, 2009
I wrote about the values of generosity and random acts of kindness earlier this week. You know that the idea was triggered by the Yoders at the Wall Street Journal. And I thought the idea was important to discuss here.
I write these posts a few days ahead of time, so I’ve had the concepts of generosity and random acts of kindness in my head for a while. I’ve been wondering if I do enough of these acts, or am I just another tightwad parent?
I had an opportunity to make a difference this past weekend.
Spring weather hit our part of the country like a lion this weekend. Hannah said she needed to get to the store to buy some shorts and dresses. Would I take her? “Yes,” I said, “I would.”
We got to Target, which is cheaper than the mall, and started looking at clothes. The plan was to start at Target, the cheaper source, and if she couldn’t find anything, we could move on to the mall.
Remember, Hannah has a clothing allowance of $120 per month. But Hannah can still find this allowance constraining and I do see her struggling to acquire “cute” clothes at reasonable prices that keep her feeling happy and confident with how she looks.
So, in the store, I had a revelation…. “Here’s my chance,” I thought. And then I said,
“Hannah, here’s the deal. Today is half price sale day at Target. I will pay, on my own tab, for half of the price of the clothing you acquire today.”
“Really?” shrilled Hannah.
Hannah bought three dresses (yey! dresses!), a pair of great shoes (expensive, to her, at $30), a pair of shorts and a tank top. I actually picked one of the dresses and the tank top for her. She wouldn’t have noticed them otherwise.
Hannah has grateful and I felt like I had helped her. Also, notice that Hannah didn’t go overboard in the amount that she purchased. She was still frugal and responsible in the quantity of the clothes she bought, out of respect of my budget and out of continued sensibility for hers.
It was a really good afternoon.
Justine
Our daughter is moving to France!
March 3, 2009
Goodness gracious. My daughter will be moving to France. This is all just starting to sink in.
Hannah doesn’t leave until August. But the preparation meetings and letters and phone calls have started in a whirlwind and it is all starting to hit home.
One of the biggest head jolts is the upending of the way we think about money and how we’ve been teaching our kids about money. Suddenly the advanced education that we’ve been giving Hannah regarding money and finances seems so propitious. And so inadequate.
This adventure will raise all kinds of questions and thoughts and new ideas and innovative practices. We will try to discuss most of them here with you folks.
Topics that have already come up include adequate spending money (since Hannah won’t be able to work in France), the value of the dollar, savings for college, the cost of a new laptop computer and what to do about her mobile phone. These are only the topics that I have thought of initially. I am not sure how we are going to wrestle with any of them. And who knows what other money issues we will encounter.
This certainly should be fun.
Justine
Max, the ten-year-old, wants a credit card
March 2, 2009
Wow. I think I have created a monster.
Or I am doing a really, really good job of getting my kids jazzed about managing finances.
On Sunday morning, Max woke up and asked what was for breakfast. I told him that I had some delectable homemade Apple Butter Cake and some fresh blackberries.
“Nah,” said Max. “I want donuts.”
Great. I make homemade food and and the boy wants preservatives and that really-bad-for-you-kind-of-fat.
I said, “Well, good luck getting donuts.”
Max responded, “I’ll just ride my bike to the grocery store.”
Long story short, I am pretty liberal with my kids in letting them do crazy stuff, but not my husband. I responded that there was no way Max’s dad was letting him ride by himself to the grocery store.
Well. I was wrong.
Off Max goes to the store – but wait! He doesn’t have a credit card. Jon and Hannah are the only ones who have ridden to the grocery store (possibly with Max in tow) and they have credit cards to help facilitate purchases at the store.
Max wanted to know how he is going to pay for the donuts. (– Oh, important point… Since this will be food for the family, Max knows I will pay for the donuts. He doesn’t have to pay for them out of his own money. And he knows to get lots of extra donuts so we can have some around the house for our busy week.)
I think about it and I tell Max that I guess I am going to have to give him some good old-fashioned cash.
You should have heard that boy grumble! About how that is not very efficient! How we aren’t using the credit card company’s money for free! How the exchange of cash and returning the change is a hassle!
My goodness. I have created a monster. Isn’t it great?
I told Max that maybe I will move his credit card ownership date up from the the age of twelve to the age of eleven. He said, “That would be a good idea, Mom.”
And there you have it.
Justine
Teaching our kids to negotiate
February 27, 2009
Yesterday we introduced the topic of teaching our kids about negotiation.
Not the kind where our kids say, “Ah, mom!” and use the word “but” and talk back. No, not at all. I really do not stand for that anymore in my house.
But I do want my kids to negotiate all financial arrangements with me so that they can get practice negotiating. And I like to coach them when they have the opportunity to negotiate with the outside world.
An example of negotiating is when I give one of my kids a chore:
“Max, I need you to sweep out the garage.”
Silence.
“Max, there is three bucks in it for you”
That, in and of itself, was a negotiation. Max was in a position in his relationship with me that he knew he had some leverage. He wasn’t in trouble that day (for a change) and he felt he could negotiate with me. And he did so with a pregnant pause.
And I needed the garage swept!
I like my kids to try to negotiate every single transaction with me. I think it gives them the skills that they need and can obtain only through practice. Negotiation can be so complex and rich and varied, that I think it is important to have all kinds of negotiations and outcomes with one’s kids.
I have told my kids, every time I propose a chore, they should start negotiating. Sometimes they forget (which I think I might be grateful for.) Sometimes I won’t negotiate. That is a good thing for them to learn. And sometimes I will. I tell them that if I propose $4 for a chore, they should counter with a higher number. Always. Sometimes I will give in, sometimes I won’t. Just like in any other negotiation in life.
Now, granted, my kids can’t say no to me. If I have a chore I need to have done, it WILL get done. But I tell my kids that with anyone else, in a financial transaction, they can always walk. And we practice that, too.
Justine
Teaching your kids to haggle
February 26, 2009
I recently came across an article about the benefit of negotiating, particularly in a difficult economic environment like the one we are currently in.
The article noted that national chain stores are increasingly willing to bargain with consumers and that negotiating also can save hundreds of dollars on gyms, cellphone plans and rental cars, and thousands of dollars on a new car.
I thought the article was interesting because it reminded me of how important it is to teach our kids to negotiate. Our American culture has historically seen a lot less economic negotiation than other cultures. One can negotiate for almost anything in countries like India and China. But here in America, we don’t negotiate for much except in mergers and acquisitions or purchasing a car.
Which means that we as American’s don’t get much practice at negotiation. I only became a good negotiator late in life. And I only realized late in life that all job offers should be negotiated. Why didn’t I learn that sooner? How come my dad didn’t teach me that?
Now, I teach my kids to negotiate. I entice them to negotiate with me. I harangue them if they forget to negotiate with me. And I point out to them, afterward, how they could have made a negotiation go better with me if I feel they screwed up along the way. I want my kids to always remember that ANY money situation is negotiable. If they don’t get it in their minds now, how will I be able to teach that to them later?
Justine
