Wednesday, April 29, 2009

Money Lesson Follow-Up

Well, Munchkin is in much better spirits, which makes me very happy. She is also fully committed to going there to visit in August, which I guess means that we are on for a trip to France (at least for now). More on that as it develops...although her "budget" for the summer includes saving for that.

I guess I never followed up on the money discussion from a couple of weeks back. I brought some stuff with me on the plane to Chicago two weeks ago, and we had two excellent talks about how she will handle the money she makes this summer and beyond. I showed her how to make a budget...and we put together a little spreadsheet to handle that. I also very much appreciate the input that I got here, which helped a lot in figuring this out.

First of all, between her two jobs, I think she could very well end up earning around $2,500 after taxes. I told her that she will contribute $250 towards each of soccer camp and the trip to France if she wants to go. I also reserved the right to up her contribution to the trip based on how much she really ends up earning...

Of the remainder, she can keep 25% to do whatever she wants with...clothes, food, etc. $500 is plenty of money for her to learn exactly how fast you can blow through money when you aren't paying attention;-). The rest of it will be split two ways...half will go into her savings account, and half she will give to Papa Bear, Big Sis and Smoking Hot Roommate because they pay her school tuition (if she really does earn $2,500, then that would be $750 to savings and $750 for school).

Now, I am not even going to try and get them to actually keep the money, since they have all told me already that they won't...but they have at least agreed to take the money from her and then put it into the account that was set up for her a couple of years ago when she finally got her Dad's life insurance leftovers (if you never read it, this explains why I don't speak to some of my family...and includes me dropping the C-bomb and calling my family members "skunks"...that makes me giggle). That will at least give her the experience of contributing...and will add quite a bit to what is becoming a sizable college fund.

I decided against making her donate to charity, but I think that I will encourage her to think about some volunteering during next school year. I just feel like her time would be more valuable than whatever little money she could give, and the experience of getting involved would be good for her. We can talk about that later on, though.

She seemed to be totally OK with all of this, and definitely took in what I was telling her about budgeting. Hopefully, as she starts to earn and save it, we can have a follow-up lesson later this year about saving and investing and the different places to save. Since she already has an investment account, it would be useful to explain to her what is in it, and why.

You know, so that she can save her money for when she sneaks off to Paris in the middle of the night to chase after this boy when she turns 18;-)

1 comment:

Ys said...

All sounds very sensible to me :) My parents always left us to our own devices when it came to money we earned but we were brought up knowing that money was easy to lose and that saving for a rainy day was the best thing. Doesn't mean we always listened though... ;)