National Bank of MomEven though I’ve been budgeting for over 10 years now, things have felt more and more tight with every passing year.
J just graduated from high school, and I decided to sit down and calculate just how much his senior year cost us!
(Just a note that AI was NOT involved in the writing of this post.)
Below is a list of expenses for his senior year.
Kids ask great questions, if you’re paying attention. Here are three questions that my 11-year-old asked recently about credit and loans.
One of the earliest conversations to have with kids is the difference between a debit card and a credit card. This is a difficult concept for kids because they often look exactly alike.
A debit card is tied to a checking account (an account at a bank that normally doesn’t earn interest). You can use your debit card to make purchases only up to the amount available in the checking account. If you have $500 in your checking account, you’ll be able to spend up to $500. (Prepaid cards like FamZoo work in a very similar fashion.)
A credit card isn’t tied to a bank account; it’s basically a loan. When you’re approved for a credit card, the credit card company will say you can borrow up to a certain amount of money — this is your credit limit. The amount of credit extended to you is based on your credit history and how likely you are to be able to pay it back. If you check your statement or online account, it will show you the amount of available credit you have left (minus any purchases you’ve made).
Letters from Mom is an ongoing series where I share words of wisdom with my son. Read more letters from mom.
Dear J,
When I graduated from college, I was really fortunate to get a job immediately at a great company with an excellent starting salary.
I got paid monthly and took home $2,673.61 in my first full month of work. Curious to see the actual pay stub?
At the time, I knew enough to put some money aside into a savings account. I set up direct deposit to deposit $100 to my savings account per pay period and the rest to my checking account.
With each raise, the rest got bigger and bigger. The amount I was saving did not.
Guess what happened?
Today I’m starting a new series called Letters from Mom. At 10, there are only so many money lessons I can teach and that J can practice. However, there are things he’ll need to know later, and that’s what I want to focus on today.
Dear J,
I’m hoping that by the time you’re older, you’ll be very financially healthy.
The markers of financial health and success (in my opinion) are:
But financial health alone won’t give you the happy, fulfilling life I wish for you. There are several other areas that are important.
In the early 2000’s, a friend of a friend started an investment club. If you’re not familiar with the term, the SEC says:
An investment club is generally a group of people who pool their money to invest together.
To participate in the club, you would send him money each month. The group would choose and buy stocks. And ideally you’d make a profit.
Nothing could go wrong there, right?
At the time, I was in my early 20s. I knew I should be doing something with investing or stocks or the stock market, but I didn’t know what. Here was someone who supposedly knew; he was someone I liked and trusted, so I started sending him money every month. (I didn’t participate in the group otherwise and didn’t help choose the stocks.)
At some point I stopped sending him money and lost track of how much I had sent.
A few years later I got an email inquiring how much I had invested. The leader of the club was in trouble for embezzlement.
