Lesson Eleven: Future Value of Money

I am the proud owner of an MBA.  A degree that I earned as an adult, with much blood, sweat and tears.  While I am thrilled to have the degree, there were definitely classes that I did not look forward to at all.  Finance and Accounting classes were at the top of that list.  I didn't like them, didn't understand them, and told myself over and over again that I would not go into either Finance or Accounting.  (My last job was for a large financial services organization, but that is a totally different story!)

So imagine my surprise when I found myself  having a discussion with my daughters about the Future Value of Money.  My kids, like many, have certain chores that they are responsible for and for which they get paid.  We are pretty strict about chores and if the chores are not completed, they do not get paid for them.  We only pay for actual work completed.  Along with the chores, there are certain things that my husband and I view as just part of living in the house.

In our house, doing dishes is not a paid chore.  It is just part of the deal for living here in the house.  The other day after a quick after school snack, my girls left the kitchen table looking as if a hurricane had blown through the house.  Dishes on the table, garbage on the table, crumbs everywhere.  I asked the girls if they would please clean up their mess and put their dishes in the dishwasher.  While they were at it, there were a couple of glasses in the sink as well and I asked them to put those in the dishwasher as well.

"Those aren't ours."  Yes, well, I understand that, but it isn't going to kill you to put two extra glasses in the dishwasher.  "Is it part of our chores?"  Nope, that it isn't, but still would be nice for you to do.

While my girls sat there dumbstruck, my smart husband says to them.  "Maybe you should do it so you can bank it for the future".  Brilliant!  They are all about money right now so this perked up their attention.

We explained to them that sometimes the cost of doing something now (in this case, 5 seconds to put two glasses in the dishwasher) has the possibility of growing into some larger value later on.  We explained that maybe if they worked on "banking" chores that the next time they asked for something, we might be more inclined to say yes because the value of their going the extra mile would grow.

The future value of money, or in this case, time, had never occurred to them.  They put the two extra glasses in the dishwasher.  Then they went upstairs, cleaned out their closets, cleaned up the play room and made their beds.  Unbelievable!  I'm quite certain we are going to feel the repercussions of their grasp of the future value of money sometime soon.  But for now, I am basking in the glory of getting something useful out of those miserable Finance classes!

Lesson Eleven:  Future value of money

Lesson Nine: Cheaper Is Not Always Better

As far as my girls are concerned, the best part of Christmas is the shopping to be done after the holiday is over.  They take inventory of what they received, any cash that was received, collect coupons, gift cards, sale notices and off we go. 

We made a trek to Portland this week to visit with friends and family.  The girls had money to spend so they wanted to do some shopping.  My husband and I were along for the occasional help with discounts and math, and to guard the dressing room doors.

We spent all day on Thursday shopping through downtown Portland.  Well, to be honest, the girls shopped, my husband and I mostly sat and waited....and waited....and waited.  The fact is, they each had a finite amount of money to spend and they wanted to get the most for their money as possible.  They are generally pretty good little bargain shoppers.  They check for sales, shop the clearance section, prowl through consignment stores and do everything possible to go home with a large amount of bags.

The girls are at the age where they can't necessarily just shop for their age, especially with jeans.  They need to try them on for waist size and length.  Since the obsession with skinny jeans continues, they tried on maybe 30 pairs of jeans trying to find the exact right fit.  My youngest daughter found a pair that fit her really well and she loved them.  They happened to be on sale for 18.00.  My oldest daughter could not find a pair on sale despite her best efforts and had to accept the fact that she was going to pay 36.00 for a pair of jeans if she wanted jeans that fit.  While she was less than pleased with the price, she has worn the jeans every day since buying them.

Once the jeans mission was accomplished, it was off to find some boots.  Once again, they tried on every single pair of boots in the place.  After much discussion, they both chose a pair of boots that were on sale for 20.00.  My husband and I took one look at them with their cardboard-like soles and realized that they would be ruined within a week.

We asked them what they would choose if they didn't have to worry about money.  Without hesitating, they each chose a different boot.  These boots were not cheap at a nice round 50.00.  Not wanting to see them waste their money, my husband and I offered to kick in 20.00 for each of them and asked them to make their decision with that in mind.  It was not an easy decision, but in the end they both chose the 50.00 boots, now costing them 30.00.  We were finally able to convince them that cheaper is not always better especially if they were to spend 20.00 on a pair of boots that would be taking up space in the garbage within a week.  Sometimes you really do get what you pay for.

Lesson Nine:  Cheaper is not always better.