Success! September 7, 2008
Posted by Tracy Gullett in Earning, Goals, Saving, Spending.add a comment
Thanks to dedication, diligent saving, patience, and the deal at ToysRUs, G was able to reach her goal today! She purchased a Nintendo DS Lite, an accessory pack, and her first game – “Are You Smarter Than a 5th Grader?” Including tax, she paid $145.07 in cash, which she earned with checklist jobs and extra jobs, with some birthday money rolled in as well.
As we were eating dinner, she told me how the thought of buying the game system motivated her as she was cleaning all the bathrooms in the house today. She said, “As I was scrubbing, I was thinking to myself, ‘DS…DS…DS…’”
She missed one minor thing in one of the bathrooms, but overall it was a good job. She earned $19.75 out of a possible $20. All the mirrors, sinks, counter tops, toilets, and floors are nice and clean now. Yeah, I think that’s worth twenty bucks to me. 
My wife snapped some photos before G opened all the boxes. As you can tell, she is a very proud girl!
Her mom, her sister, and I are all proud of her accomplishment!
G Is Almost There! September 7, 2008
Posted by Tracy Gullett in Goals, Saving, Spending.add a comment
Ooh, the house is abuzz this morning with talk that the long-awaited Nintendo DS may actually be within reach! In today’s ToysRUs ad, there is a special offer for a 25% discount on a combination of a Nintendo DS Lite, one accessory, and one game. After doing the calculations, G and her mom figured that she could come pretty close to making this happen this week before the special expired.
G came to me with a plan to earn the money that would put her over the top. She wanted to know whether I would pay her 50 cents to clean all the bathrooms in our house. We have three and a half bathrooms here… and she was willing to clean all of them for 50 cents. OK, so the kid needs a little more training on the deal-making skills. I told her I was willing to pay more than that if she did a really good, complete job. She thought I may bump it up to a whole dollar. But when I told her I would pay five dollars per bathroom, her jaw about hit the floor and dollar signs lit up in her eyes!
After a training session from her mom, she spent about 45 minutes on the half bath and then moved onto the jack-and-jill bathroom she shares with her sister. She’s doing a great job and is sticking with it so far. I am trying to remember the last time I saw our 9-year-old stay focused on one task with this level of determination for an hour.
Keep in mind that G has been saving up her spending money for this. She hasn’t even considered pulling money out of her saving envelope to make up the difference. As this has been somewhat of a long-term goal (several months is long-term for a kid age 9), we plan to suggest she draw from that savings envelope if she’s a few dollars short so she can take advantage of the special offer. What I won’t allow is for her to draw money out of her ING Direct savings account, because that money is for true long-term savings (her first car, for example), and has already had 401(kid) matching funds applied.
At this rate, I figure we’ll be jumping into the van around mid-afternoon and heading to ToysRUs to make the deal a reality. I hope so, anyway. My wife and I are probably just as excited to see G achieve her goal as she is to get that DS!
This Kid Won’t Give Up! September 3, 2008
Posted by Tracy Gullett in Goals, Responsibility, Saving, Spending.add a comment
G just won’t give up on her Nintendo DS goal. We haven’t tried to talk her out of it much lately. We have mentioned to her that we don’t think it’s necessary, that we don’t believe it’s worth the money, and that we think she could spend her money more wisely. But, as I’ve said before, it’s her money. She’s worked for it, she’s earned it, and she can spend it however she wants (with our oversight, of course. No machetes or penny stocks.).
Today, G brought home two Scholastic book order forms in her school folder. In the past, she has always managed to find several things she wanted to buy through the book order. She has bought a door alarm for her bedroom door, a pair of spy glasses, and has actually picked out some books as well. I don’t have any problem with these book orders. I think they’re a neat deal. I do, however, prefer the books over the toys that are offered.
As I opened her folder today and pulled out the book orders, though, she immediately told me, “I don’t want to buy anything out of those because I want to get a Nintendo DS.” She just won’t let go of that goal! She has been saving her “spending” money for what seems like a very long time with this goal in mind. After working, saving, and waiting this long, she doesn’t want to do anything to slow down her progress.
Something tells me that once she finally buys that game system – and I’m sure now that she will – that we’ll never find it in the bottom of the toy box with those other, cheaper things that she “really wanted” from her book orders in the past.
Discipline with Gift Cards August 24, 2008
Posted by Tracy Gullett in Responsibility, Spending, Sports & Hobbies.add a comment
G didn’t have a birthday party this summer, so before school starts next week, her mom helped plan an afternoon outing with a few of her friends to play mini-golf and have some pizza. Even though we tried to make it clear that G didn’t need any gifts, a couple of the girls figured this was her birthday celebration and brought her some nice presents anyway.
One gift was a $15 gift certificate to a sporting goods store. G is a bit of a tomboy, in that she absolutely refuses to wear dresses, she wants to be a race car driver, and her main savings goal is to buy a Chevy Avalanche when she turns 16. With that in mind, a sporting goods gift certificate is a pretty thoughtful gift for our 9-year-old girl.
We went shopping tonight to give G a chance to spend her gift card. She decided not to take her spending money along, since she has been working so hard to accumulate it for that Nintendo DS (I still haven’t been able to talk her out of it). She is planning to sign up for volleyball this Fall, so she wanted to use the gift card to buy a nice, new volleyball. When we looked through the store, however, the least expensive ball they had was priced at $19.99. Had she brought her spending money with her, we would have had no problem with her adding five or six bucks of her own money to the gift card so she could buy the ball. Since she didn’t bring her cash – a wise move to keep her from spending more than she intended – what do you think she did?
Nope – wrong-o!
She didn’t even ask us. I don’t think it even occurred to her. She’s gotten used to the way things work in our family. Mom and Dad cover necessities and the occasional treat, and things the kids want, they buy with money they earn. I can’t say this happens every time. Once in a while, they want something so bad that they have to at least ask the question. But “no” means “no” and we very seldom hear any begging.
So, the volleyball gets put off to a later time. We know they’re sold for a lower price at other stores. And besides, Mom and Dad might spring for a new volleyball eventually. We haven’t even been asked yet. It was her idea to buy it herself.
Surveying the store, G found a shirt that she liked pretty well and could afford to buy with the card. But then she found something that she was actually excited about buying – and could afford to buy with the card. She decided to go with some accessories for her Crocs sandals. She picked out one package at $9.99 and one at $2.49 and had to stop at that point because if she added another one, the sales tax would put her over the $15 limit. As I turned to my wife to ask whether she thought we should cover the tax so she could get another package (I struggle with my own discipline at times. Okay, all the time.), G skipped off toward the checkout register, happy as could be and not concerned that she wasn’t getting her full $15 worth.
Setting ground rules, applying them consistently, and talking through the reasons behind them with kids makes it possible for the kids to learn self-discipline so that parents don’t have to apply discipline quite so often. Rather than returning home with parents irritated and kid disappointed, we all came home feeling like we had a fun family outing.
They’re Listening! August 14, 2008
Posted by Tracy Gullett in Education, Spending.add a comment
This is just a quick update on G’s quest for the Nintendo DS. We were in a Best Buy store tonight to pick up a replacement for our recently retired cordless phone. While there, we took a detour to check out the DS Lites – y’know, just in case there was a half-off sale or something.
After thoroughly drooling over the game consoles (at the full $129.95 price), cases, accessories, and games, it was time to head out. G stopped me as we left the aisle and said, “Dad, I’ve saved about 110 dollars in spending money. Can you give me the extra 20 so I can buy a Nintendo DS tonight?”
I let out a jolly chuckle and delivered a flat “No.” She was okay with that. She understood there was no way that was going to happen, but she couldn’t help herself – she had to ask the question. I don’t blame her. Her shoulders drooped a bit as she said “Okay.”
A few minutes later, though, she surprised me with another question. As we entered the checkout “corral”, she said, “Dad?” (My girls always say “Dad” before they ask or tell me something, even if I’m the only other person in the room. I don’t know why.)
Yes?
Will stores like Best Buy bargain on stuff?
Woah! My 9-year-old wants to haggle with Best Buy? This is great! I’ve told her in the past that we don’t always have to take things at face value. We can negotiate. We can make offers. We can bargain with people. In response, I’ve received a lot of head nods and Okays. But, good grief, she was actually LISTENING! She was going to talk them out of that twenty bucks.
I gave her a quick answer as we walked up to the cashier to pay for the cordless phone. I told her they likely wouldn’t deal with her on a DS. After leaving the store, I explained in more detail, citing the popularity of the item she wants and that the store has no reason to make a bargain when there are so many customers that are more than willing to pay their full asking price. In retrospect, I should have let her try anyway.
I also told her the story about a friend and me shopping for a new flat-panel TV the day before the Superbowl last winter. After searching through the store’s inventory, my friend decided that one of the display models, which was already marked down, was a perfect fit for his needs. Since it was an otherwise out-of-stock item and was already out of the box, he was able to negotiate a price significantly less than the already marked-down price. My point was that the store’s willingness to negotiate depends on the item and circumstances, so she shouldn’t be afraid to ask
I told her one other thing as well – How proud I was that she had even thought of asking the question. Is there any better feeling than when you realize that the lessons you’re trying to teach are actually being learned?
Be thoughtful and careful when speaking to your kids. They’re listening!
Being Our Kids’ Financial Advisor August 3, 2008
Posted by Tracy Gullett in Education, Spending.add a comment
When it comes to financial matters, parenting is a bit like being a good investment advisor. We provide information, suggest courses of action, advise what we would do if we were making the decision… and then get the heck out of the way and let the kid decide. And like a good investment advisor, we don’t let our clients do anything that’s just totally against their best interest.
G has wanted a Nintendo DS for quite a while now. Her friends have them, her cousins have them, and she wants one too. She’s saved her commission money, earned extra money, and has frequently counted it up to see how close she is to her goal. As of now, she is about half-way there.
The game system is priced at $129.95 just about anywhere we look. However, we recently discovered that no actual games are included at that price – just the console. Browsing through the Sunday newspaper ads, we found that games range anywhere from $15 to $50 each. So, including a single game, plus sales tax, she will need to spend about 20% more than the $130 she had originally planned. Even after she buys the console and the first game, at the rate she has been earning commission money lately, it’s going to take quite a long time to fill her spending envelope with enough money to buy that second game.
Putting myself in her position, I can’t justify putting that amount of money into a single pursuit. I shared my views with G, and she was obviously not happy about it. At this point, she is still fully convinced that the DS is where her money should be spent. And this is her money – that she legitimately earned and designated for spending – so I can’t veto her final decision when she makes it to her goal.
Of course, if she was considering something like a “My First Flamethrower” or a “Junior Accupuncture Kit,” I would be the bad guy and overrule her. But if she thinks video games are where she wants to invest her money (Mom and Dad will review and approve the actual games), and she continues to fund her Saving and Giving envelopes, then I’ll leave it up to her. If she later finds that she never has money to spend on anything else and that the game system wasn’t everything she thought it would be, then that will be a good life lesson that I hope would stay with her.
One of the best effects that is caused by saving toward a goal is that when you reach the goal, you may find that the goal has changed. You allow yourself the opportunity to really evaluate the importance of what it is you are working toward. By allowing our kids to make financial decisions early in life, we give them the opportunity to make mistakes. If handled properly, these mistakes turn into lessons they can use later in life when the stakes are much higher.
Rockin’ Robin and Juicy Fruit July 26, 2008
Posted by Tracy Gullett in Responsibility, Saving, Spending.add a comment
We’ve all seen kids – maybe even our own – who just don’t appreciate the things they’re given or respect other people’s “stuff.” When she gets off a bicycle and just drops it to the concrete, or he can’t get to level 6 of a video game and throws the Nintendo DS across the room… I can almost guarantee that these aren’t items that the kid paid for with money they earned. They might have been gifts, hand-me-downs, or they may not even be their own property. Our initial reaction (I’ve been guilty of this) may be to ask “Do you know how much that thing COSTS?” Well, no, they don’t. It didn’t cost them anything! If that one breaks, they’ll just get a new one, right?
Separating gifts from earnings is very important. If we consistently buy our kids the things they want, it makes the “real” gifts (birthdays, holidays, etc.) less special. And if gift items are special, it’s more likely that they’ll be treated with the same level of respect that earned items are. Besides necessities, we limit the things that we buy for our kids just because they want it.
Our 9-year-old has been asking for a guitar for a couple of years. When we started the checklist and envelope systems, she knew right away what her first savings goal would be – an electric guitar. She wrote it right on the front of her Saving envelope. Every week, she would put half of the money she earned into the envelope and count up the balance. We had taken a trip to a guitar studio to get some ideas, so she had a rough idea of how much the guitar would cost. It took her 8 months to gather enough cash – long enough that we felt confident that it was something she really wanted because her enthusiasm hadn’t waned. After a trip to another guitar store, she was all set. She knew the guitar she wanted. She’d held it in her hands and plucked the strings a little – having no idea how to play it. This was it.
“Dad, can I buy it today?”
“Do you have your cash?”
“No.”
“Well, then there’s your answer.”
I could almost feel the knot in her stomach – the knot you get when the thing you want is right in front of you and you can’t reach it. We’d have to come back another time. And we did so about a week later. She brought her cash and was on a mission. She got the guitar, an amp, a tuner, a cord, and a beginner guitar book. The kid could not have been more proud of what she’d gotten – what she’d earned. She wanted to play that thing all the time. She wanted to sign up for private lessons (Mom and Dad are paying for these – we’re not complete tyrants.) And she’s been practicing diligently and improving much quicker than I imagined someone with those little bitty hands could. What once sounded like “bing… bing, bing, bing, TWANG!” has evolved into a nice little melody to which I can whistle, hum, or even sing along. “Rockin’ Robin – tweet! tweet! tweet! – Rockin’ Robin – tweet! tweedle-e-deet!” I believe that if it weren’t for those 8 months of planning and saving – if we had just bought her a guitar when she asked for it – the frustration of “bing, bing, bing” would have overtaken the enthusiasm and we would have a 6-string dust collector that would end up on our upcoming garage sale.
The appreciation of earned stuff vs. stuff that is handed to a kid isn’t just limited to big-ticket items or long-term goals. Even the most simple things can be very rewarding – especially for the littler folks. I got home from work the other day, pulled into the garage, and walked in the door to find our 5-year-old, M, right in front of me. She was practically jumping up and down, she was so excited. My wife had taken the girls on a mundane trip to the drug store to pick up a few things. M had a hankerin’ for some gum, and her mom’s gum wasn’t the kind she wanted. So as they got ready to leave for the store, M grabbed her princess wallet (her version of a “spending envelope”) and clutched it close to her as they drove into town.
Scanning the huge rack of candy and gum, she found what it was she wanted – a package of Juicy Fruit gum. She waited in line, plunked it down on the counter, and paid $1.25 in cash out of her wallet. As soon as she was back in the van and into her booster seat, she had a piece of that gum in her mouth and was chomping away. I’ll bet that was the best gum she’d ever tasted. Thus the excitement when Daddy got home. She’s very proud of those 17 sticks of chewing satisfaction. This presents another opportunity for parenting – Teaching the value of sharing with Dad. 
Savings, Giving, Spending July 8, 2008
Posted by Tracy Gullett in Giving, Saving, Spending.add a comment
Each week on “pay day,” my kids deliver their checklists to me and I pay them based on our individual agreements (base pay minus red Xs). But rather than let them go blow all their money on video games and gifts for their dad, my wife and I have them use an envelope system to divide their earnings. They have three envelopes: Saving, Giving, and Spending. We’re trying to teach them the basics of budgeting and saving towards goals.
Our 5-year-old, M, captured one of her goals last night. Ever since her big sister started looking at electric guitars, M has had her eye on a ukulele. Well, she finally took the plunge and bought a baritone ukulele with $54 from her Savings envelope. She was so proud of her purchase and couldn’t wait to get home to show her mom. Her sister taught her how to play some notes, and she wants to sign up for lessons to learn how to play like Jake Shimabukuro. It’s amazing how much enthusiasm a kid can have for something she’s wanted for a long time and paid for with her own money.
The way the pay day money is divided is based on percentages. Roughly 50% of the money goes into the Savings envelope, which may only be used to pay for established goals. Another 10% goes into the Giving envelope, which is used to give to a cause of the girls’ choice. FInally, the remaining 40% goes into the Spending envelope, out of which all “fun stuff” is bought. The girls take their money and divide it up themselves, with my help with the math if needed. It’s crucial to the training that they do this themselves. Otherwise, they don’t see where the money comes from and where it goes. My kids usually count the money in each envelope each week so that they can keep track of how fast it is growing.
Originally, we based the distribution percentages on the base pay, with Savings and Giving coming first. In other words, with M’s base pay of $5 per week, $2.50 would go to Savings, $0.50 would go to Giving, and the remainder – whatever that might be after red Xs were tallied – would go into Spending. Using this method, she would get no money for her Spending envelope if she received 8 red Xs for the week (i.e. she failed to do 8 jobs).
Well, we have revised the system just a bit by making the red Xs more proportional. Now the percentages are based on the actual pay. In the above 8-red-X scenario, M would receive $3 for the week. Applying the percentages, she would technically put $1.50 into Savings, $0.30 into Giving, and $1.20 into Spending. However, since we don’t like dealing with anything less than quarters, we may round it to $1.50/$0.25/$1.25.
Is anyone lost at this point? I hope not! Once the system is established, it’s really quite easy to follow! Pay Day has become a time that the whole family looks forward to each week and is a good bonding opportunity for Dear ol’ Dad and his little girls.
