Financial Literacy

For those of you who don't know, I am studying to become an Accredited Financial Counselor. What does this have to do with anything important you say?

Well, I must confess that I have been slightly embarrassed by our lack of ability in interesting the boys in any kind of money management activities. Any card carrying, AFCPE certified, Accredited Financial Counselor should have kids who KNOW THEIR FINANCIAL STUFF. True? I think so and I still have a few months left before I have no more excuses.

Add to this the fact that, every day of my work existence, I talk to 18-22 year old college students whose eyes glaze over at the mere mention of capitalized interest on a loan. I have seen the future, and it isn't pretty.

So. As of this week. And, after many, many, many, many failed allowance schemes.....(and here I must give credence to Karen Podschun who warned me that the failures would happen)....I think we have finally stumbled across something that just might work.

I'm not saying that I'm ready to write a book or anything. I'm just saying that this particular system appears to be achieving the ultimate goals -- a) to get the boys to manage their own financial decisions and to b) have them connect to the concept of "earning" money.

To get to this point in our lives, Ross and I had to get over the feeling that we were giving the boys something for nothing. We aren't. The boys have household expectations. They are and will remain active, full participants in the maintenance and upkeep of the home and yard. As such, (and this is the paradigm shift) they also get to share an appropriate for their age amount of the benefits of living in the household -- a.k.a. regular cash on a monthly basis auto-deposited into their checking account.

The amount that is deposited might make some uncomfortable, and that is where the fine print comes in.

First, to receive this amount, they both had to agree that they would give a portion of it to God -- which prompted an interesting conversation when the youngest asked, "Mom, exactly how do you write a check to God?"

Second, they had to agree that some of the amount had to be saved each month via auto debit into their savings account. This amount could not be touched for one entire year.

Third, they had to agree to always keep a minimum balance in their checking account as a safety. The youngest was particularly impressed with the fee charged by the bank for overdrafts and immediately saw the prudence of this particular rule.

Fourth, they are now in charge of any and all entertainment/electronic/game/i-tune expenses with three exceptions: 1) Mom and Dad will still give them presents for birthdays and Christmas. 2) They will still get a souvenier allowance on vacation. 3) There could be bonuses for things like good grades and quarterback sacks.

Last, but not least, if Mom and Dad have to do any chores that do not normally belong to us, we charge $10/hour for the service. That includes picking up dirty socks that are stuffed under the couch or behind the couch pillows as well as the ones that are hidden on the fireplace mantle tucked up under the greenery.

Since the implementation of this system, I have born witness to the following events:

Sam is having a friend over this weekend. "We want to go to a movie," he said. "That's a great idea," I said. "Do you have money to go to a movie?" He was silent for a while. (Context: Sam is saving up for an I-Pod Touch.)

"Maybe we could just watch TV," he said. We then had a brilliant conversation about where in town you can get a movie for FREE -- like the library. Neither boy had ANY idea this was possible. Which, quite frankly, is shocking because we have borrowed them from the library before. Obviously their minds were otherwise occupied at the time.

Isaac received his first actual piece of "official bank mail" this week. He was thrilled. This is heady stuff for a 9 year old. The mail contained his monthly statement, a flyer about what the bank does with personal information, an advertisement for e-banking and an updated fee schedule. I told him to look through the mail and tell me if he had any questions about what was in there. He silently and diligently began examining the paperwork at the dining room table.

"WHAT!" I heard him exclaim. "The ATM card fee went up to $7!" He was outraged. I nearly cried. I'm also happy to report that I am fairly certain that people visiting our home will have a smaller probability of discovering random, unauthorized dirty socks.

The day will come when we will have to levy the per hour charge. But for now, I am sitting here watching the boys rifling through the cleaning closet -- unbidden -- looking for supplies to clean the toilets in the bathroom. Life is very, very good.