National Bank of MomFor over a year, I have been paying J interest at the Bank of Mom.
He started with $45.00 and earned $1.35 the first month. (I pay 3% monthly.)
This month, he’s up to $231.99 and earned $6.76 in interest.
I print and email him a copy of the statement each month. (He has his own email address and when I send the statement, I add other notes and tips. Hopefully he will read these someday and remember what we talked about.)
Here’s his statement for this month:
Allowances. To give or not to give. It’s a hot topic.
To put it simply, I think there are three main camps:
If you’ve been around awhile, you know that my focus on National Bank of Mom is 1) teaching my son kick-ass money management skills and 2) fostering good communication between us.
I teach him how to balance his savings, spending and giving accounts, how to plan for a large purchase and how to save at least 10% of his income.
The more I thought about it, though, the more I realized that talk will only get me so far.
If I want to instill these skills in my son, I have to make sure I’m walking the talk. I have to look at my own actions and behavior and ask myself, “Is what I’m doing contradicting what I’m saying?”
Ralph Waldo Emerson said:
“What you do speaks so loud that I cannot hear what you say.”
That couldn’t be more true. So much of what we learn is unspoken. We pick things up from our friends, family and society around us — what’s “normal” and expected. How life works.
To that end, ask yourself the following questions and examine your behavior:
Late last year, J took a trip with his dad to visit his cousins. When he got home, he recounted all his adventures and added, “they must be rich because they have a pool.”
A few years ago, I would have agreed with him. His cousins have a very large house, drive fancy cars and take elaborate vacations.
But then I read The Millionaire Next Door. (Here’s the first chapter if you want a preview!)
In it, the author makes the important point that you can’t tell how much people have based on what they buy.
Hearing it now, it makes total sense. But for 30+ years, I can say that that thought never occurred to me.
So we talked about it. I told him that you can’t tell how much people have saved. The pool doesn’t prove that they DO have a lot of money and it also doesn’t prove that they DON’T.
I brought it up again last night. I said, “Do you remember when you said that your cousins must be rich because they have a pool? Does having a pool or a fancy car or big house mean you are rich?” To which he replied no. I asked, “Does it mean that you aren’t rich?” And he also said no. (Woo! He remembered!)
Then I asked, “What does it mean?” Unfortunately, he was hard pressed to explain further.
So I explained again that there was NO WAY to tell how much money someone had saved based on their car or house or vacations. Maybe you can tell how much they spent, but really not even that completely because maybe they got the item at a discount or given to them.
A few weeks ago, J and I went out to dinner with my parents. When the check came, my dad asked J to calculate the tip. Luckily we had just talked about this, so he was able to figure it out — but it made me think about all of the other money and finance lessons I’ve learned from my parents.
So far I’ve mentioned that my dad would drill me on the rule of 72 and part of any money I received had to go towards opening savings bonds, but there were many more lessons over the years.
My dad was relentless with the sayings:
When I was in middle school, he took me to our local credit union and we opened a checking account. He showed me how to write checks and use an ATM card.
