Time to Change to Clothes

We put the clothing allotment into Olivia's account this week. Over the past weekend we did the seasonal clothing switch. Olivia went through what fits and what does not. She handed several things down to her sisters and bagged some for donation. We determined what she needed then what she wanted.

What do you know, she said that what she needs is socks and underwear and what she wants is a Northface fleece and a few more "nicer" shirts ("Not girly ones, Mom").
She knows what she needs and she is going to sleep on the "wants". Its so gratifying when you know they "get it".

Let's bring back "Home Ec"

Remember when there were practical life skills courses in middle school and high school. How to change a tire, change your oil, sew, wood working.....how to balance your checkbook. What happened? Why don't we teach this stuff anymore? I think, especially now, it is time to put this stuff back into our children's curriculum. And wouldn't it be cool to make it even more real life.

Why not bring the Personal Finance class back into the schools? Or why not have a local bank work with the kids at their schools? How about community jobs for kids coordinated through school? Local charities or philanthropic opportunities, too? How about the cool, fun thing to do is save?

Just an idea or two?

Real-Time Money Talk with Our Kids

It's a particularly interesting time to be doing these real financial exercises with our kids. With the current financial crisis in this country, there have been a few more articles and forum discussions than normal on helping kids with financial knowledge, budgeting, spending wisely, etc. Newsweek did a good spread on kids and fashion.

Some of the activity we are seeing online are parents posting questions on how should we talk to our children about the financial crisis and fear it is causing. While we all have many views on how and why this happened, one thing keeps coming up: financial illiteracy!

And the responses, though more urgent at the moment, are the same. Do not let this happen to our next generation... Educate your kids well... Teach them that greed never wins... If something is too good to be true, it probably is... And teach them to make decisions based on facts and intuition, and not on the fact that everyone else is doing it.

Visit Prosperity 4 Kids to read their very insightful, latest newsletter.

Learning About Interest

With some money accumulated in her "stash" (aka: cushion, long term savings), we thought it was time to teach Olivia the concept of interest and how to earn it with her money. We checked our bank's website to see what they had to offer. I explained the basic concept of giving the bank money so that the bank could lend it to other people. In return the bank pays you money, called interest. One way or vehicle that the bank uses is called a CD. "So, Olivia, tomorrow, let's ride our bikes down to the bank and get a CD." She said, "ok" with a bit of a puzzled look, and went off to finish her homework. Well, tomorrow came and when she got home from school, I reminded her of our outing. She said "ok" again, however with reservation. "Do you not want to do this?" I asked her. She said, "It's ok, but why do we have to go to the bank to listen to a CD and how is that going to help me understand interest?" Oh gosh! Generation gap? I laughed and explained. She also laughed and off we went.

Love our bank!!! At 10 minutes before closing, they welcome us in to do this transaction, explain all the details to Olivia and congratulate her on this big step in being financially responsible. They invite her to come in at any time and see how her CD's interest is doing. She signs, goes to the teller, receives her CD paperwork in a nice folder and gets the lollipop, too. I actually think that I am smiling more than her.

She explains all this with pride to her brothers and sisters at dinner . They listen, ask questions, and are all surprised that she will make money by doing nothing. Olivia also added that she feels a little guilty that she gets money for doing nothing and at the same time is glad she can help people achieve a goal they may have like starting a small business or buying a house.

Why wait until they are older (like high school or college) to explain these things to them? Of course, bank finance is complicated. The fundamental concepts are simple. And understanding something like interest motivates them to put more away. Even our youngest kids were getting it, especially with this real life example with their sister. A life long skill......

Vacation Mindset

We took a vacation at the end of the summer to visit family in Portland, Oregon. Really love it out there. The mindset and attitudes towards living greenly, collaboratively, cooperatively and honestly are purposed and clear. The physical infrastructure of the city promotes walking, running, and biking. Participation in the recycling programs is easy. The organic, locally grown or produced foods are affordable. The norm is to behave in a green manner. I could go on and on. Ahhhhhh!


So the kids had a great time and we tried to be mindful of not spending too much, not wasting too much and staying within our budgets. On vacation that is hard to do. We are out of our routine. We sometimes have to grab what we need in the moment rather than shopping around. And most activities come with the temptation to purchase. So we really used our three questions: "a need or a want", pay "cash", and "is it something we planned for".
So proud of them! They split sodas (they can never finish a whole one anyway), they remembered to reduce, reuse, and recycle. They didn’t ask for toys at the amusement park or souvenirs at the gifts stores or stuff in the expensive airport store just because we had a 2 hour layover and they were bored. We visited places that were free. We ate dinner before going to the ball park. We did not come home with stuff that we did not need. Basically, before each activity we talked about what was expected so that when it all came into view, the impulse or distraction was not as great.

Our one splurge (although not really a splurge) was going to the Nike outlet store for back-to-school shopping. We talked about it before going in. We decided that each kid could spend between $25 and $30 dollars or get three things, whichever is less expensive. It was fun for them. They looked at price tags, added their items to check totals, and tried things on to make sure they really liked them. They were so excited and proud.

So, when going on vacation, remember to budget for the expenses while you are there (not just the cost of the trip). Teach your kids that a vacation does not mean a vacation from the habits that we practice at home. Take the habits with you and use them. You will spend less and help your children learn to transition and acclimate easier when traveling, vacationing, or even moving.