To introduce this week's tidbits, let us begin with the practical...specifically money. When we started giving the boys an allowance a few years ago, I tried a few different "cash delivery models." There was the trial Once-a-Week-Payout--which failed pretty quickly, as it depended upon Mom actually having paper money in her possession to shell out...hahahaha! (and the darn kids don't take credit cards, imagine!) Then there was the even-less-popular Phantom Allowance where I promised them the bucks, but then forgot, or failed to stop by the ATM, or put it off for so long they threatened to sue me for Back Wages (Good thing they're too young to watch Law and Order; the day they figure out how to "lawyer up" I'll be in deep trouble.) So, I finally hit upon a system that works efficiently and effectively for us: the First-of-the-Month Plan. The Bank of Mom calculates what their net total will be, then forks it over all at once (minus their automatic 10% each deductions for Savings and Donations). They are then free to tuck it away and let it accumulate toward a larger purchase in the future, or spend, baby, spend as they see fit. Over time, the boys have demonstrated very different Consumer Personalities. There's Derek, the Prudent Saver, who at several times already in his 11-years has patiently socked away cash until he has had enough for a Bigger-Ticket Item. And...there's Riley, the Happy Spender, who barely has his itchy little fingers on the bills before he's dreaming and scheming about how to get rid of them.
As their Financial Adviser, I mostly try NOT to micromanage their decisions. When I hand them the moolah, they must assume responsibility for their choices (as in--true example--"Riley, you opted to buy a Paint-Your-Own Rubber Ducky this month, now you're out of money until July. Deal with it."). Mostly, this has worked out quite well: it makes them at least stop and think about how to use their available resources before pulling the trigger on impulse purchases. I like to believe I'm helping to teach them the old-fashioned value of a dollar (which sure does not buy much these days, but they still get the point). However, I recently permitted us to tiptoe down a potentially perilous path...the one that leads to Buying on Credit. You see, Derek was hit with a sudden, powerful yearning to upgrade his Nintendo-DS (Don't ask me where he gets these crazy urges for shiny new tech toys...what?...I needed an Android phone!...Really!) He had most of the money already, but wouldn't accrue the rest for a few more months...so he requested an Advance on his allowance. (Oh, and he refused to settle for a Used model, to which his father oh-so-helpfully chimed in "Of course, you want it right out of the box, for that new car smell!" I am SOOO blaming this on the Y-Chromosome...)
After about a day's worth of deliberation, during which time he thoroughly examined the ramifications of blowing his wad of cash on one expensive toy, and I tried to weigh the pros and cons of approving this transaction, we came to the conclusion that he could go forward. The most relevant consequence as I saw it was that he would not have money for any new games to play on his spiffy new console. BUT. Since he had bought the original DS with his own savings as well, I offered to post it on Craigslist for him, and give him the proceeds. It sold in less than 48-hours. So much for the pain of being penniless until August...
Thus, in one fell swoop, I've imparted lessons about how to negotiate Cash Advances, buy desired items on Credit, and utilize the profitable Online Marketplace. Not a bad week's work for an Investment Guru. Now where's my commission? (Luckily I work for coffee and chocolate!)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment