Finance Gets Personal

Sometimes I think parents wouldn’t sign their kids up for so many sports and activities if they knew how much they would actually end up spending when it’s all said and done.

Take our family’s expenses for my stepson’s fourth grade tackle football team, for instance.

It starts with an up front cost of $180. While this seems steep, it pays for the uniform, mouth guard, use of the football pads/helmet and pays the referees. Plus, NO FUNDRAISER! So, not too bad so far. But it does still sting a little.

First day of football practice: I get a frantic call on my way home from work. “We need to get some cleats for practice tonight. We totally forgot!” Do last year’s still fit? I tried to buy them a little big. “No. Can you stop and get some?” Cost of Cleats: $19.99 at WalMart.

Second week of practice: “Coach says we need to buy some practice pants or I won’t be able to practice with pads.” Well, when is he going to get us the uniform pants? I thought we were just waiting for those to come in. “No, I think everyone else bought practice pants because they were on sale for $10 at sign-ups.” Well, your mom took you to sign ups and she never said anything about that. I thought everyone else was wearing their uniform pants. They all bought a pair of practice pants at sign ups? “I guess so.” Cost of Practice Pants: $20 at Dick’s Sporting Goods.

Third week of practice: Do we need to get him a cup? He should be wearing a cup, right? “Um, yeah, I think so.” Where do you buy a cup at? “Dick’s?” Cost of Junior Cup and Underwear: $16 at Dick’s Sporting Goods.

The next practice: Are you wearing your cup? “No, it’s too big! I can’t run with that thing on!” Well, you need to wear it. You’re going to hurt yourself. “Can you buy me a smaller one?” No, that one is fine! Besides, the only smaller one they have is the ‘pee wee’ cup.

An hour and a half before the first game: (Crying) “I forgot to bring my cup over to mom’s house. Can you guys bring it to the game? And I can’t find my underwear either!” After searching for the underwear… We can’t find your underwear, and we haven’t seen it since the last time you went over to your mom’s. Are you sure you didn’t leave it there? Have you not been wearing your cup at practice since then? “How can I wear my cup when I can’t find the underwear? She hasn’t seen it either!” Cost of Pee Wee Cup and Underwear: $16 at Dick’s Sporting Goods.

Half an hour before the first game: “Where are my black socks? I don’t have any black socks!” You were wearing black socks when you went over to your mom’s on Friday. Why didn’t you just bring those? “Well, I did, but coach says we were supposed to buy black football socks that go up to your knees.” What, that’s not included this year? Last year, it was included. Cost of Football Socks: $15 at Dick’s Sporting Goods.

Two hours before the second game, which has been rained out: Hurry, let’s run inside the school for football pictures! “Which package are we going to get this year?” I don’t know, let me look at the form. I don’t remember what’s included with the $180. Go stand over there with the team and I’ll give it to you in a minute. (Thirty seconds later) “They said I need to bring the form with me.” Argh, hold on! Here, we’ll just get this package. Cost of Pictures: $19.99

Last Saturday night, at a team pizza party: “OK guys, I’m going to buy three pizzas and three pitchers for the kids, what does everyone else want to do? Have you eaten? We could order four pizzas and a couple pitchers of soda for the adults and split it between the 15 families?” That sounds fine. My husband and I each have two pieces of pizza and some Coke, while some of the other parents split pitchers of beer. “OK, guys, the bill is $270. So, let’s call it $20 per person.” (Afterward) Did he split up the kid and adult orders? Did we just pay for everyone’s beer? I think we just got screwed! Cost of Pizza Party: $20, Plus $2 in Quarters for Arcade Games

Tuesday night: “I hurt my pinkie at football practice. Coach said to put some ice on it.” OK, well it does look a little swollen. Put a baggie of ice inside a washcloth and sleep with it on your hand tonight.

Wednesday night: (Crying) “My head hurts!” OK, let’s see if your grandma has any headache medicine you can have. “Can you see if she has any medical tape so I can tape my finger? Coach said I should tape my finger.” We have some medical tape at home. We’ll do it then. Is it still swollen? Does it hurt? “Yes, the nurse said I should probably go to the doctor.” You went to see the nurse today? “Yes, three times.” How come she didn’t call? Did she send a note home or anything? “No. She said there was nothing she could do, that I should probably go to the doctor because it hurts really bad.”

Ten minutes ago: “The doctor says his pinkie is broken. They probably won’t do anything about it, but we need to buy a splint and make an appointment with an orthopedic surgeon.” Well, is he still going to play? “Yes, if we use a splint and tape his three fingers together.” How is he going to be able to catch the ball? “I don’t know.” Are you sure he should play? “No.” Cost of Doctor Co-Pay and Splint: $26; Cost of Upcoming Specialist Co-Pay: $35; Other Upcoming Costs: TBD!

And we’re only halfway through the season!

Photo Credit: Little Chargers by Brit., used under Creative Commons licensing.

Wow, I feel super old.

This morning when I dropped my stepson off at elementary school, there were some fourth or fifth grade boys outside discussing which cell phone company they would choose if it were up to them. 

“Sprint’s OK, but I think I’d pick AT&T.” 

Crazy! 

But consider this:  According to a study from the University of Alabama at Birmingham, one-third of children age 10-12 own a cell phone.  And another market research firm recently estimated that 54% of 8-12-year-olds will own a cell phone by 2009.

Whatever happened to tying up the home phone line for hours?  For free!

Photo Credit: 365:027 by Groeten_Uit_Parbo, used under Creative Commons licensing

On Thursday, I wrote about my first money memories and how they may have affected the way I handle money today. I found that I was pretty oblivious about money as a child, even though my grandparents distinctly remember me telling them as a 2- or 3-year-old that “Daddy works to buy me gum.”

I had always thought my family was rich because we had a swimming pool, but around eigth grade, I started seeing little signs that my parents might actually be in debt. Here are some of my money memories from eighth grade through high school:

In eighth or ninth grade, I won second place in an Optimist essay contest on “Freedom: A Right or a Privilege?” (I think I said it was a right - after all, I felt entitled to pretty much everything). I needed something to wear to the awards ceremony, so my mom took me to The Jones Store to get a new shirt. She usually steered me in the direction of the sales rack, but on this day, I picked out a $30 long-sleeved ribbed Levi’s shirt with silver buttons. My mom said, “$30 is kind of expensive for a shirt. Are you sure you want it?” Of course, I said I had to have it. But after the awards ceremony, I noticed that it didn’t fit quite right - the sleeves were too long, it was a little too tight, etc., and I didn’t really like it. But I kept wearing it so my mom wouldn’t know. Even today, I have a hard time parting with clothes I spent too much money on. There has been a $140 J. Crew dress hanging in my closet for at least three years that I’ve never worn because it doesn’t fit quite right (it’s going in the garage sale).

For Easter, my sister and I always got a new dress to wear to church. One year, I needed new shoes to wear with my dress, but my mom told me we could only buy them if we got them at Sears. I believe now (and I think realized back then, because I felt really guilty about those shoes) that this was because her other department store cards were maxed out.

My junior year of high school, my mom took me shopping for a prom dress (yes, my mom took me shopping a lot). I chose a long, black velvet dress with an empire waist and a sheer black overlay from Dillards for $120. I remember that when we came back home, my mom hung it up in my closet, took off the price tags and told me that my dad didn’t need to know how much it cost. I took this as a lesson from my mom that men don’t understand how much it costs for women to look good (somewhat true), and that my dad is cheap (he is). At least I recognize now that hiding purchases from your spouse is not a good idea (although it is tempting).

My family hosted a foreign exchange student from France for a month when I was 16. That fall, I got a part-time job at the grocery store and began saving money so I could stay with her family the following summer. I saved enough money to cover everything except the $800 plane ticket, so my parents let me borrow the money. When I returned home, I found out the money I had borrowed actually came from my grandparents - my parents had borrowed it from them. I repaid my grandparents, but I felt guilty about it and surprised that my parents didn’t have $800 in the bank. I never asked to borrow money from my parents again.

I have always wanted to live in Chicago, so my junior year, my mom took me there to visit colleges. We went to the University of Chicago and Northwestern, and I fell in love with Northwestern (I didn’t think the University of Chicago seemed like a very fun place because students were outside studying on a Friday evening - shouldn’t they be drinking beer or something?). My parents had never talked to me about paying for college - I just assumed that if I got good grades and test scores, I could get a full-ride scholarship anywhere I wanted. My bubble was quickly burst when I found out Northwestern cost $30,000 per year and didn’t offer academic scholarships. Needless to say, I ended up going to My State U.

My parents made too much money for me to qualify for need-based scholarships or grants, but I had enough merit-based scholarships to cover my base tuition. When we met with the university’s financial aid department, they said that with my scholarships and my parents’ expected contribution (based on some kind of formula), there was only about an $800 shortage per year, and they suggested that my parents find a way to come up with the extra money instead of taking out a loan. Somehow, I left the financial aid office with the maximum allowable student loan. And that, my friends, is where my journey into debt began.

Photo Credit: 1974-12 by jacdupree, used under Creative Commons licensing

The Baglady wrote an interesting post Monday about how childhood memories of money affect your money habits. That post has inspired other personal finance bloggers, including Meg, English Major, and now, me, to think about their childhood money memories.

Here are some of mine:

As a five- or six-year-old, I was a door-to-door salesman. I would pick strawberries from my parents’ garden or make my own books, then go around the neighborhood selling them for ten cents each. I’m not sure how successful I was at this, but I remember thinking my strawberries might be overpriced once I saw how much they cost at the grocery store.

My grandparents gave me a dollar for every A on my report card. I was also usually given a few dollars when I came to visit and told to go buy myself a candy bar. Sometimes they’d give me less than what a candy bar cost though, and I’d think, “When is the last time they bought a candy bar?!?”

When we moved to the country, my sister and I had a lemonade stand. We made elaborate signs and drug a table, chairs and lemonade up to the end of our gravel driveway, which was a few hundred feet from the house. However, we failed to account for the fact that no one was going to stop for lemonade on a country highway with a 55 MPH speed limit, and we went back inside empty-handed. Looking back, it appears that this is where my entrepreneurial streak ended.

In elementary school, I thought we were rich because we had a swimming pool. But I knew we weren’t as rich as my friend Leandra, because she was the first person I knew who had a Nintendo.

In fifth grade, our school took a field trip to “Exchange City,” which is like a fake city where the kids have jobs and learn about money. I applied to be the vice president of the bank, but I ended up being the bookkeeper of the snack shop. I decided that being a bookkeeper is boring, and working in fast food sucks. I envied the kids who worked at the radio station and the newspaper.

In 7th grade, my friend and I were invited to take the PSAT. I was at her house while her dad helped her fill out the application, and when she got to the household income question, he told her they could fill that part out later.I never knew that money was supposed to be “secret” before.

All in all, it seems I was pretty oblivious about money and any financial problems my family might have had up until about 8th grade, when I discovered that having a pool and taking vacations don’t always equate to having money in the bank. But more on that later…

What are your first money memories, and do you notice that they affect the way you handle your money?

Childhood Money Memories Part II

I have a nine-year-old stepson who receives an allowance of $9 every two weeks. Out of his $9, $2 goes to savings and $1 goes to the charity of his choice, leaving him $6. So, from his allowance, he is able to save $52 per year - not bad, but at that rate, he’ll be lucky to cover the cost of textbooks for one semester of college.

If you really want your children to get ahead financially and make saving automatic, you’ve got to set savings rules for their largest source of income: cash they receive from relatives. I would estimate that my stepson probably pulls in an amount equal to his allowance in cash gifts from relatives each year.

A few years ago, we started making him save half of this money. And by “save,” I don’t mean “I’m saving for a Game Boy.” It has to be for a long-term goal, such as buying a car or paying for college. Today, he has $583 in the bank.

It was a difficult transition for him at first, but it’s working better than I had hoped. He now voluntarily saves half of all non-allowance money he receives. When I asked him this morning what he plans to buy with his proceeds from our upcoming garage sale, he replied, “Well, I’m going to save half of it, and buy something with the rest.” I was fully expecting him to say “video games.”

We plan to continue this requirement through high school, and also make him save half of any money he earns from part-time jobs.

What are your thoughts on this? Do you think it will make it easier for him to save a large portion of his income as an adult? Or do you think this will backfire and he’ll turn into a spendthrift once we’re not there to “make” him save?

All I know is that I wish my parents had made me do it.

My stepson turns 9 next month, and we are in the process of planning his birthday party. It’s not going to be too elaborate - we’re renting a couple of lanes at the bowling alley during “cosmic bowl” for about 8 kids and having cake. Total cost: $56 plus the cost of invitations, cake and paper plates/utensils.

A few years ago, we had a bigger birthday package at a different bowling alley, where there were about 13 kids, pizza/hot dogs, cake/ice cream, arcade tokens, a private party room and a bowling pin that all the kids sign. Total cost of that package: $170 plus cake. I’m glad most of the parents stuck around, because there were so many kids I’m sure we would have lost one.

Last year, we decided to keep things “simple” and had a slumber party at our house with three guests. It was pure hell - the kids were arguing, crying, chasing the dog, jumping off stairs and spraining ankles, etc. So we decided not to do that again until the kids are older. I will gladly pay the bowling alley $56 to avoid having a party at our house!

Many of my stepson’s friends have much more elaborate parties than we do, however. Common parties include mini golf/go karts at a local fun center (package cost: $256 plus tax/gratuity), attending professional baseball games, lazer tag, parties at pottery studios, etc. Granted, most of the people throwing these parties can afford to, but it can create high expectations for the other children. For example, my stepson came home from a party last year and said, “Jake’s parents gave him $300 for his birthday! Can you believe that? I want to get $300 for my birthday!” So I calmly and politely explained that there is no way in hell that is going to happen.

The trend toward more and more elaborate birthday parties for children is happening throughout the country. If you are interested in the topic, check out this website I found on the subject: http://www.birthdayswithoutpressure.org/

When I was younger, I figured I’d have a baby when I was 24. Then, it became 25, 26, etc., and now I’m hoping to get to it before I’m 30.

What happened? Well, student loans, credit cards, cars, a house..plus, I wasn’t really ready until recently. So now that I’ve started seriously thinking about it, I’m not sure when the best time would be. And while I know there’s no “perfect” time, my husband and I have a goal of getting completely out of debt (including the house) within five or six years so we can explore lower-paying, more fulfilling careers.

Will having a baby ruin our plans? It might create a few detours, given the cost of daycare these days. But there’s no way we’re waiting five years for a baby. So our target date for the baby being born is December 2009, when we should have most (if not all) of our non-mortgage debt paid off. Then, I’m hoping my mom might want to watch the baby, since she only works part-time a few days per week. I’d like to pay her more than she makes now, but less than the cost of daycare. But I need to talk to her to see how she feels about it (although I hate the idea of people knowing we’re “trying” - it grosses me out).

I’m sure everything will work itself out. But I’d rather have a plan that goes awry than no plan at all.