Proficient Note Buyers
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May 18, 2009
Making Financial Literacy Exciting
The newest thing to hit our neighborhood is a skateboard-like contraption called the RipStik. The kids up the block have a couple of them, and my kids have spent a little time trying them out, learning the nuances of the thing.

My oldest son has decided he absolutely NEEDS a RipStik. I'm sure I was no different at his age, but 'wants' and 'needs' are still the same to him. He also knows his parents aren't just going to rush out and buy him whatever his little heart desires: He needs to save up his money from babysitting, mowing yards, etc. until he has enough for whatever he wants to buy.

My wife took him to a local retailer to check out the RipStiks this weekend. Unfortunately, he was about $15 short. He asked his mom if we could loan him the money, and he would pay it back through chores over the week. That plea would probably work on 98% of the parents out there, but it won't work on us. The rule in our house: If you can't afford it, you need to continue earning until you can.

My son has been through similar situations enough to know the rules, and he understood. He now has a goal to earn enough money this week to be able to buy a RipStik while we're in Montana this next weekend. That's the other thing he's learned about financial matters: If you buy products in Montana, you don't have to pay sales tax. In essence, he'll be saving himself over $6.00 in taxes by buying in Montana vs. Washington.

Generation after generation grows up with absolutely no concept of how finances work. How can a parent teach a child fiscal responsibility when they don't know anything about it themselves? I think it's criminal that schools aren't required to teach about finances; instead, we're just raising one NOW generation after another (I want it / need it NOW) - and perpetual debt and financial disaster is assured.

All three of my kids also feel they NEED cell phones. My oldest is 12, and my youngest turns 9 next month. The only people they ever speak to on the phone is their grandparents. Why on earth do they think they NEED cell phones? All their friends have them, that's why. As with everything else, I let my kids know their approximate monthly cost if they want to add a line to our cell phone plan, and when I would expect payment each month. Once we've had that discussion, their NEED for a cell phone becomes greatly diminished, apparently.

How is your financial knowledge? Do you understand how compounding interest works? Do you know about the time value of money? Do you carry credit card debt or do you pay off the balances every month? If you feel your financial literacy is insufficient, I'd like to recommend a book to you: It's called 'Taking the Mystery Out of Money', written by Lonnie Scruggs. I have all of Lonnie's books, and I can assure you this one will be required reading for all three of my children before they graduate high school. You can buy the book at www.notetools.com/tamyoutofmo.html.

There is no other subject so vital to our success that garners so little attention than financial literacy. If we teach it early, our children won't make all the same mistakes we made. Just look at the financial meltdown we've experienced in the last couple years: Unless we learn from our mistakes, we are doomed to repeat them. If you're not financially literate, you need to be. If you are, share your wisdom with those that aren't. Future generations are depending on you.

Make it a great week.

Clint


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