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What do monkeys and money have in common anyway? Well, nothing really. We call our kids monkeys because they are always acting like monkeys and hanging on us. But now it appears that some of them are also finally getting the “hang” of the money lessons we have been trying to teach them. FINALLY!
First and foremost, we have had one child who has a penchant for name brand things. Which we have been doing our darndest to eradicate because of the sheer amount of money people spend on brand name versus no name products. Last year he spent his birthday money on a pair of Air Jordan’s, that he then refused to wear most of the time because he didn’t want to get them dirty. He has now had them for a year and worn them a handful of times. What a huge waste of money!
We talked to him about this last year, when he got them, and tried to explain what a poor decision that was. This is due to the fact that he is still growing and his money could have been better spent on other things he wanted that were more useful.
He actually ended up agreeing with us about his poor birthday gift choice after realizing that he never wore them for the whole year. So this year, when his grandparents took him birthday shopping again, he made a different choice.
Myles was so excited when he came home with a Nike backpack instead. Now, it is still name brand, but this time he did his research. When his grandparents took him to the store he apparently looked at the Air Jordan’s, but then decided that it wasn’t a smart choice.
He told us that he decided to make a wiser choice and use the birthday money to buy something that he really needed that would be the most useful for him instead of something that he didn’t really need and that wouldn’t get used. What?!
Myles said that he chose this backpack instead of the shoes because it had a lot of pockets, and a side pouch to put his water bottle in (which his current backpack didn’t have) and was bigger so he could put all of his notebooks in it and not have to go to his locker as much. Not only that, but the backpack was on sale and was half the price of the shoes. So, he was saving money!
I don’t recall seeing a smile that big on his face in quite some time. He was so proud of himself!
There were high fives all around and we told him how proud we were of him for thinking through his choice more carefully this time. And the backpack is pretty awesome to boot. We call that a parenting win!
This isn’t the only lesson that he had a breakthrough on this week though. We also talked to him about the $100 that was burning a hole in his pocket, that he received from another set of grandparents for his birthday. He was having a hard time just keeping it because he felt the overwhelming need to spend it. So we discussed opening a savings account for him as another option.
When we told him that we could help him get an account set up and put his birthday money in there instead, and it would earn interest, he was curious. Bryan explained to him that if he didn’t have the money on him, that it would be easier for him not to think about it. Not only that, but that his money would earn interest while it was in his savings account.
Interest & Compounding
Myles didn’t know what earning interest meant, so we explained it to him. While savings accounts aren’t making nearly as much as they were before the Great Recession hit, making anything on your money is still better than spending it and not having anything left. We gave him a brief rundown of the interest rate at our SECU bank and then tried to explain compounding simplistically.
One of the best places we have found to show compounding is here, so check it out!
After we explained interest and simple compounding, he jumped on board so fast it made us laugh. We told him that we would take him to open a savings account, but he let me keep his $100 until we did so. He said that he didn’t want to lose it or be tempted to spend it. Smart thinking!
This was an exciting break-though for us since neither of us expected him to jump at the opportunity so quickly. It made us feel like we were finally getting through to him about how important it is to save and keep tabs on your money, instead of blow it all on things you don’t need.
It may only be baby steps, but we will take it. After all, Rome wasn’t built in a day!
Stay tuned next week when I continue this story about one of our other monkeys and how she is coming around.
Until then, what have been some of your tactics to get your little monkeys to grasp the importance of money?