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Now, before I even get started, I want to tell you this article is not about some miniature financial wizard. It's about a real life, Nintendo loving, 10-year-old boy who often tries to spend his allowance as fast as he can get it, but has learned a few things about how to get more for his money!
From a very early age, Joel loved to beg for things. He would see an expensive toy at the store and ask for it. Probably at least by age 3 or 4, I started explaining the financial facts of life to him. "Jobunny," I would say, "You could get this Whatchamgizmo for $50.00, and you would probably be tired of it in a week. But I happen to know that if you look at enough yard sales this summer, you'll find one just like it for around $5.00 or less. Then, think of what we could do with that other money." Then I would proceed to explain to him how $50.00 could buy him a new winter coat, or a membership to the zoo, or several trips to McDonalds when our friends asked us to go, or 1/2 a week's worth of groceries, or keep the electricity on at our house for 2 weeks so he wouldn't freeze at night.
Most of the time, he was quite agreeable with that. I think talking to him in very specific terms about the pleasures, comforts and necessities that money could provide made it a much more concrete concept for him. Little people don't deal well in abstract thinking. Come to think of it...neither do many of us bigger people!
When he was around age 8, I started thinking seriously about the need to teach him about working toward goals (bit by bit) and delayed gratification. At this point, we introduced him to the concept of lay-away. When he would find an item he wanted, we would figure out how many weeks of allowance it would take to pay for it if he spent all of his allowance on it...or if he kept back some money for "spending". Sometimes, he waited until a Birthday or Christmas financial windfall gave him a larger chunk of money to put a more expensive item in layaway. Then he would have a good down payment and be able to get the item from lay-away before the store's deadline.
While other kids beg for the "hottest" and "newest" electronic gaming systems each year for Christmas, Joel has learned that lagging a year or so behind the latest "technology" can be to his benefit. His buddies get the game systems they crave, but are lucky if they have 2 or 3 games to play on their new tech-toy. Joel, however, buys last year's wonder model on clearance or at a resale shop, yard sale or even a pawn shop! Then, when the stores start marking down the "old" games to make room for the "hot" new clones, he buys some then, or puts a stack in layaway. He also gets great deals at game resale shops and yard sales. (Actually, he's also learned that if you just stand around and look cute and sound smart, some young adult or teenage friend will pass along a few electronic hand-me-downs.)
Of course, Joel didn't learn this all by himself. My husband and I have explained these things to him, and experience has proved to Joel that we do know what we are talking about.
Once in awhile, we let him really "blow" it so he will know we are telling him the truth. If the expenditure is small, perhaps, we let him make his own decision even when we know he will be sorry later. Perhaps he wants to buy a very flimsy toy that we know will prove to be a disappointment. We warn him once, then let him decide for himself. We've know we'll have to deal with his hurt feelings later, but kids need a chance to find out things for themselves.
We have encouraged Joel take care of his own business as much as possible. We want him to feel confidence in business dealings and all public interaction. We started this in simple ways. For instance, if he found pickles on his hamburger at a restaurant, I would casually say, "Well, go tell them you said mayonnaise only." So he did. I would keep an eye on the situation, intervening only if he was being overlooked or mistreated. Often, I would just get the cashier's attention and, pointing down toward the small, dissatisfied customer, say, "He has something he needs to say to you." Now, if he needs to return something he has purchased, he never even thinks of asking me for anything but transportation.
Here are some of Joel's tips:
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