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« My Story from Rags (Kinda) to Riches (Kinda) | Main | Are MBA Schools Finally Getting a Clue? »

October 01, 2007

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My parents taught me the value of saving, but unfortunately the money that was saved from 0 to 18 years old was earning barely any interest instead of put into CD's. So basically I lost $ to interest but not from spending.

I'm on the other side of this. It's my parent who needs to be taught how to handle money. I'm not rich by any means, but my wife and I are doing well for our young age (net worth of ~80K, and we're 27 and 25).

My mother on the other hand has a networth of maybe a few hundred dollars. She always complains about having no money, and my grandmother gives her money every month to buy food, and has bailed her out of credit card debt mutliple times in the past few years. I've tried talking to her about finances, but she doesn't listen to me, so I've thought about setting her up w/a financial advisor, but I'm not sure it'll work. My father passed away a few years ago, and she got a decent amount of money in life insurance (not enough to live off of for the rest of her life...but enough so she wouldn't be destitute). She had spent it all in about 2 years, and was able to rack up a bunch of credit card debt. She's of the opinion that my sister and I owe her, so she can spend whatever she wants, and we should take care of her. Any thoughts on how to deal w/that situation?

Wow, I am in a similar situation with the in-laws. However, they would never take any help from us unless maybe they were on the street. Hmmm, a tough one, if you come up with a solution, let me know!

I wouldn't be forking money over to her though! When there's no $ she'll have to learn sometime...

oh, don't worry, I'm not forking money over to her. It'd be one thing if she really were destitute, and needed money. However, since she can't manage money, is in a house she can't afford, and won't do anything to help herself, I'm not going to be giving her money to waste.

I'm starting my 6 year olds allowance (age weekly) coming up in November. We're drawing up an agreement that she will save 15% of it, keep 15% for investing, and keep track of her spending.

I got the idea from an article I read recently about a similar contact between a rather wealthy father and his son. I can't remember the site or the person though.

Each week that she has expenses and kept track of them successfully she will get an extra 0.25, up to a max bonus of $2.00. If she doesn't keep track properly her bonus goes away and she tries again.

If both my kids (my son will start when he hits grade 1 as well) and do this their whole life, I would be willing to bet they will be one wealthy set of kids when they retire at 65. If I can teach them to respect other people on top of all this, I think they will make out OK.

Someone recently reviewed the National Bank of Dad, which I thought looked interesting. I also plan to be a good financial example myself. Hopefully finding bargains can be a game for our kids and not stressful.

Let's see...spend several hundred dollars near HS graduation once they've probably already developed a bad habit or two, or teach them from early childhood where it doesn't cost you a dime and can start early with good habits. Hmmm. It's good advice for kids to learn about finances but I don't think CNN's suggested method for doing so is especially good. It's by no means even remotely frugal.

The title reminded me of an old pet peeve. You know how to flawlessly and seamlessly pay the pizza driver without leaving a tip? Give the money to your (non-adult) kid and have your kid pay the driver. The kid knows nothing about tipping, and the driver wouldn't even think of shorting the kid. If you don't have a child handy, send your spouse to the door with a check for the exact amount. I once got a $4.25 (exact) check from the spouse of a state representative who later became governor.

MW - $4.25 sound like it was the tip!

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