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Thursday, November 3, 2011
The Value of a Dollar or How Jingles Ruin Christmas
This post was underwritten by BMO Harris Bank, which offers a matching $25 on a new savings account opened for your child through their Helpful Steps for Parents program. Learn more at bmoharris.com/parents. I'm so excited to be writing my first sponsored post! BMO Harris bank asked me to write about our experiences with saving money and teaching Darian the value of a dollar.
If you have read my posts on couponing or frugal meal planning, then you already know that we are a budgeted family. We weren't always this way, but with the changes in the economy and the decreases that have occurred with our family income, we've had to make changes in the way we spend our money. Collin and I have made sure to share our situation with Darian. We don't scare him, but we make sure he knows that money needs to be managed. We have talked with him frequently about how our household runs and where our money goes. He has learned that we can't always go out and buy something just because we want it.
We started talking to Darian about money when he was around five years old. We talked to him here and there about how much money it cost to buy things and how if he wanted an extra toy between birthdays and Christmases, then he would need to save money that he got as a gift to buy the items he wanted. We didn't really realize that things were sinking in until Christmas a couple of years ago.
Darian got a five dollar bill in his Christmas stocking when he was six years old. When he pulled it out he was extremely excited. Collin asked him what he wanted to do with his money. Darian quickly told him that he would put it in the bank. Such a good kid! Collin replied that it was play money and that Darian could do whatever he wanted with it. After thinking for a minute or two, Darian piped up with "I know what I could get! I could get a five-dollar footlong!" We giggled quite a while over that one.
So he had the foundation there, but he was obviously still influenced by other things around him. Collin and I kept with it over the years and told him about our mortgage and how many hours it takes to pay for things like the water bill. The first time we asked Darian how much he thought our house cost, I think he said something around $5000. Not quite, little man. He was shocked when we told him what the real price had been and when we told him how much we have to pay every month just to get to live here.
We now show him how much bills are when they come in and he helps us with the couponing and meal planning. He understands why we don't go out to eat very much, even though he'd live off of chicken nuggets if we'd let him.
When he got his report card a few weeks back, his first question to me was when our bank starts paying out on their "Pay for A's" program. He was sad to know that it wasn't until 7th grade, but I was shocked to know that he had paid such close attention. He obviously understands the concept of working hard to earn money. Our banker Debbie will be so proud.
I wanted to what else he's learned from us along the way, so I asked Darian about it today.
Me : Tell me what you know about saving.
Darian : Saving money can sometimes be a very long process. It can take a long time to save up for something. Money can buy stuff and some things cost a lot and you have to save up for it.
Me : What do you do with your money when you get it? (We have taught Darian that about half of his birthday and Christmas money should go into his savings account. We only make him deposit it about twice a year, so he's in charge of what ultimately goes into savings and what gets spent.)
Darian : When I get my birthday money, I keep it until the next time I look in my wallet and decide if I have enough money to buy what I really want with it. I've been saving for just games and toys. I mostly put my money into savings because I can't really think of anything else I want to buy. I usually want to get more money than my toy or game costs because then I don't have to start back at zero. You want to put money in savings because you can get interest every month and then you have extra money.
Okay. He clearly grasps the savings concept. But I wanted to see what he knew about more "grown up" savings and spending.
Me : Why do Dad and I need money and what do we do with it?
Darian : You need money to pay off your bills because you need a house to live in, you probably need a car to drive, you need water and electricity and gas and heating. Most of your money is spent on bills, but not all of it. Sometimes you save just a tiny amount, not a whole lot. You do this so you can pay your bills and still have a little more money in case you need anything and you haven't got your paycheck yet. Whatever you have left that you haven't used you put in your savings for retirement.
I have to admit. That answer totally impressed me. I had no idea that he'd picked up on the whole retirement concept. So I wanted to see if he really understood what he was saying.
Me : Why do we save for retirement?
Darian : So that when you get old and you don't have a job anymore you can still buy food and what you need to buy with your money.
Alright! So I'm feeling pretty good about how we've taught Darian to save and use his money wisely. It really hasn't taken a lot of effort, just involving him in our household activities, but I think we've given him a pretty strong foundation to do well with his money in the future. Good. Maybe he'll become a millionaire and take care of us when we get older. Then we wouldn't have to even be bothered by how much money we have in retirement!
I was selected for this sponsorship by the Clever Girls Collective. To learn more about BMO Harris Bank, visit their website http://bmoharris.com/parents.