But the thing he wants above all else? A swimming pool. Not just an above ground pool...He wants a huge, Olympic sized inground pool. We just bought a home in August, and while we have a decent sized backyard, a pool is an undertaking we're not quite ready to tackle. We have plenty to keep us busy inside the house before we worry about the cost of installing and maintaining a swimming pool. Plus, we have 2 toddlers, so a pool is a liability I am not ready to take on just yet.
We have the "Pool Discussion" at least once a week. So rather than just tell him "No" like a broken record, I decided to sit my son down and have an adult conversation with him about the value of money and how much things cost. I asked him to name all of the things he really wants and to let me know what he thinks they cost. His answers were surprising, and opened my eyes to the fact that my son needs some financial guidance and tips on money management.
iPad: "I think they must cost about $75 or $100 dollars." In a perfect world they would, but this is not the case at all. If they only cost that much, Mama would have an iPad! Maybe someday....
iPhone: "An iPhone might cost $50." I then asked him about service plans and monthly payments. This is something he hadn't considered at all. He assumed that once the initial investment was made in the phone itself, there were no additional payments or fees involved.
Laptop: "A laptop probably costs between $200-$500 dollars." This was the closest he came to guessing actual retail prices. I explained that there are many laptops in that price range, but that there are still fees associated with the internet as well as software that must be purchased. And let's face it: Software can be quite expensive!
Inground Pool: "I think an inground pool probably costs about $1,000." Ummm...This one had me floored. I explained to Kyle that inground pools cost much, much more than that, and that maintaining a pool can be very expensive as well. With all of the chemicals, water treatments, and the cost of winterization, owning a pool can be a very pricey endeavor.
After our talk, my son seemed very surprised to learn how much things actually cost. He really thought that everything was much more affordable! We then discussed how he can make smarter financial decisions and save money to purchase the things he wants on his own. This helps teach responsibility as well as the value of a dollar.
Here is my son's plan on how to earn and save money:
1. Work: We don't give an allowance for daily chores. These are expected and come with living in the home. He's expected to pitch in and help, and we do not pay him for this. (Unless you consider food, shelter, and clothing payment!) However, we are more than happy to compensate for chores that are above and beyond his regular workload.
2. Ask Neighbors: We just moved to NE Ohio. For anyone who hasn't been here before, it snows A LOT in the wintertime. During the fall, there are leaves galore! We have some older people in the neighborhood who cannot physically conquer these tasks. I told Kyle that he can make some money by offering these services to our neighbors. Realistically, he can make decent money raking leaves, shoveling snow, or deicing a windshield or two.
3. Sell, sell, sell! My son has a lot of stuff. Much of which he never uses anymore. So I told him that sometime soon, we can have a yard sale. He could keep the money that he earns from selling his own unwanted things,
4. Contribute to Savings: My son has had a savings account for years. I told him that when he earns money and deposits it into his account, it earns interest. Sure, it may not seem substantial, but over time, that interest can really add up!
5. Thinking Long Term: Kyle is finally starting to realize that if he wants those big ticket items like a laptop or iPad, he needs to be wise with his money. Sure, that pack of gum looks appealing, but it chips away at the money he is saving. Purchases that seem small and inconsequential can add up quickly, sapping him of his savings. Self-discipline and being goal oriented is key!
These are just a few of his ideas about how he can earn and manage his own money. I think that seeing what things really cost opened his eyes to a lot of things. For one, he finally understands that we cannot afford to just hand him everything he wants. And even if we could, we wouldn't. At his age, he needs to prepare for the "real world" and learn how to budget, save, and plan. I think he's on the right track.
***Disclosure: Information sourced from Genworth Financial.All opinions are my own.***