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There’s lots of literature in the parenting handbooks about how to teach your kids the value of money. The advice ranges from teaching kids the value of patience, teaching them to save their money for purchases, or giving them jobs around the house so they can earn their allowances. These are all well and good, but what does a parent do when their son wants to buy every electric train he sees on eBay?
To teach Louis that money doesn’t come easy, I assigned him household tasks like taking care of the cats and helping with the shopping. I have to say he’s pretty motivated because he knows he’s going to earn cash that he can put toward his trains.
Since I work from home, I’m not always able to withdraw money from the ATM to give our helper when she goes shopping. This means I need to dip into my son’s piggy bank from time to time. The first time I did this Louis wasn’t bothered, but then he noticed that his train savings were dwindling as I got increasingly busy with work.
When he started to complain, I took it as an opportunity to explain the concept of interest. I explained that when I borrow $100 from his savings to pay for groceries, I should pay him back $110 because I was using his money. You should have seen his eyes light up at this.
“So, you’re telling me I don’t have to do anything but let you borrow money and then you pay me back MORE money?” Yes, I answered. I swear he started rubbing his hands together with glee as he pondered this. My wife and I laughed and told ourselves that it looks like we’ve created a future banker.
So, Louis was very happy as Dad “borrowed” from his train savings and paid him back with interest. “You can borrow money from me anytime,” he said. But, and there’s always a but when it comes to things like this, I also wanted to teach Louis that nothing in life is free.
The other day when I borrowed some money and failed to repay him the next day, he kept pestering me about paying him back with the usual interest. I reminded him that the money was for his school trip. “Gee, son, Dad had to pay the fee for your school spring excursion so maybe you should give me a break on the interest payment.” This dose of reality hit him like a ton of bricks. I then said: “Tell you what – I’ll pay you back with the usual interest but then you can’t go on the excursion, how about that?” His eyes got really big, then he lowered his head, and said solemnly, “No, that’s OK. I want to go on the trip.”