In my last post — The Missus, Yippie — I thoughtfully stroked my chin wrote about some things personal finance-related that I’ve learned from The Missus. Well, in the spirit of fairness, I’m gonna write similar posts about Thing One (The Elder) and Thing Two (The Younger).
You are hereby notified that this post will focus on Thing One. Said child is a marvel. Whip smart, kind of heart, and deeply thoughtful, she amazes me every day.
Amaaaaassing grace . . .
Thing One is not yet of formal working age. But she has started babysitting. She commands the going rate in the area, which is ridiculously high and one I wouldn’t pay unless under duress an impressive hourly rate. Also, grandmas, grandpas and various other family members contribute (on birthdays, some holidays, and, occasionally, just because) to the Thing-One-Should-Have-Some-Fun Fund. Nothing huge, but enough to foster the fund’s mission. And when Thing One became a bat mitzvah a few years back, she collected a not insignificant sum. In the aggregate, between earnings and contributions/gifts, Thing One has amassed a nice chunk of change.
For kids her age — and certainly for me at that age — the temptation to spend that money as fast as it is obtained, is huge. Heck, most adults can’t even hold onto their money even if they’re in the fortunate position of not living paycheck-to-paycheck.
But Thing One is not your av-er-age bear. And this is where I wish I’d have known her when I was growing up. I’d certainly have benefited from learning about and following her financial discipline. And even today, notwithstanding my current discipline, I learn from her that no matter your age, you still have to make decisions and weigh consequences. And that not following the crowd is often the smart play.
Here are some illustrations.
Not-Hot pockets
Although she’s had more than ample pocket money for several years, money really hasn’t ever burned a hole in Thing One’s pocket. Sure, she has things she likes to buy, as anyone of almost any age does. However, bless her heart, she’s followed my lead by becoming a thrift store shopper. But reckless spending — much less spending all her money — has never been an issue with her. I’m not sure if she knows or fully appreciates it at this point, but this will serve her as well as anything in her life if she maintains this discipline.
Speaking for myself, when I was Thing One’s age, I also wasn’t a big spender. But a lot of what money I did have (which wasn’t much because I was too dumb to look into babysitting or some other job that under-16s can get) was spent on putting quarters into upright video game machines (To my millennial and younger readers: They were a thing. Trust me.) and candy. In short, nothing in the least bit useful. And certainly nothing that might be financially savvy. Unless, of course, I’d seriously thought of going into competitive gaming, with Ms. Pac-Man being my specialty. I didn’t, of course. Not to mention that there was no serious and lucrative competitive gaming going on in the early- to mid-1980s.
4change
After Thing One’s bat mitzvah, we directed her to put the money received as gifts in equal amounts into four different places: (1) charity; (2) college savings; (3) general savings or investments; and (4) her bank account for personal use as she chose. She did it. Without a hint of protest.
When I was that age, no one told me what to do with my money. I had unfettered access to it to sate my video gaming desires and lay the groundwork for cavities-by-way-of-candy. Had anyone told me what to do with my money, I’d likely have looked at them as if they had suffered a terrible brain injury.
License to chill
And here’s — to me — the coup de grâce in Thing One’s financial wisdom. She’s now of the age where getting a driver’s permit and license is in play. When I was at that age, my high school offered driver’s ed. (part of the curriculum, and free). I got a permit and license for nominal fees, which my parents paid for. In our new state, Thing One’s school does not offer driver’s ed. And there’s a convoluted series of requirements for getting a permit and license. The long and short of it is that if you want your driver’s licence on your 16th birthday, you have to start the training as early as 14.5 years old. And you need to take written and behind-the-wheel courses. If you’re willing to wait until your 17th birthday to get your license, no formal courses are required.
Thing One, when she was nearing her 15th birthday, started making noises about getting her driver’s permit and license. That’s when we looked into the requirements. Here’s the thing: those courses required to get your license cost about $600 on the cheap end. So The Missus and I came up with a plan. We explained the course-cost situation to Thing One and offered her a deal. If she wanted to get her driver’s permit and license ASAP, she could, but would have to pay 75% of the costs. We’d pay the rest. If she was willing to wait until 17 to get her license, we’d pay all costs (for the permit and for her driver’s test).
Thing One had the money to pay for the courses. And she’d have plenty left over after paying the fees. Not to mention the money she continued/continues to earn. And although I wasn’t this way when I was her age, most kids that age will do almost anything to get their driver’s permit and license ASAP.
But Thing One surprised us. She shrugged and said she’d wait until her 17th birthday to get her license. Finding myself somewhat shocked, I went over the full range of consequences of Thing One’s decision with her to make sure she understood everything. Appearing a little more comfortable and confident in her decision, she said that she understood it all and wasn’t changing her mind. Then I asked her why she was so willing to wait. She replied that she didn’t want to spend the money if she didn’t have to.
Some months later, I had another conversation with Thing One. I started by telling her how impressed I was by her decision to wait to get her driver’s permit and license. I followed that by saying that the whole exercise was one in which I wanted her to actually have to make some money-related decisions and weigh pros and cons. I’d not have batted an eyelash had she have taken our original deal. Then I told her that she’d demonstrated such maturity in her decision that we’d offer to pay a much higher percentage of the course fees (which at this point had gone down a bit for technical reasons I won’t get into). All she’d have to do would be to pay about $100, and she’d get her license by about 16.5 years old.
Thing One essentially said, “Nah. I’m good.” Again, I went over the consequences of the decision with her and mentioned that her outlay would be pretty minimal (in truth, it really was just so that she’d have some skin in the game). Again, she shrugged all this off.
And in the end . . .
I tip my hat to Thing One. And I encourage all children to save. And for adults to save the children.
