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September 11, 2011

Money Money

Monkey got her allowance today. She was impressed by the wad of cash in MonkeyMama's hand. She asked how much it was. MonkeyMama told her it was about $100.

Monkey then asked how long it took MonkeyMama saved that much money. MonkeyMama replied, "About 10 years."

Monkey then mused, "So it would take a long time to get a bunk bed?"

MonkeyMama said, "Yes, probably. A bunk bed costs $900. So how much more money do I need to save?"

Monkey counted with her fingers, answered, "8 10."

MonkeyMama had no idea what she was talking about, so she said, "Yes, about $800 more."

Monkey nodded, "Yes, it would take you eight 10 more years to save."

"That would be 80 years." MonkeyMama was amused.

Monkey dropped her jaw.

Then Monkey went back to her favorite topic. There is this $40 horse at WalMart she has been eying (eyeing?) for months. She asked how long it would take her to buy that horse.

MonkeyMama said, "Well, you have about $20 now, so if you save $3 a week, it will take you about 7 weeks to get there." MonkeyMama couldn't have the heart to explain the concept of sales taxes.

"7 weeks? When will that be?"

"About two months from now."

"What is that?"

"It is September, so two months from now is November. That means, after Halloween, you will have enough money to buy the horse."

Apparently that sounded pretty far away. Monkey was very discouraged.

MonkeyMama suggested her to come to the computer to look at her allowance spreadsheet. It listed all the ins and outs of her money. She was very impressed. We went over all the expenses she made over the months. She happily commented on each purchase she made. MonkeyMama then realized she actually had more money saved, so it would take her about 5 more weeks, or before Halloween, to get the horse.

She said, "You keep track of my money?"

"Of course! You need to know where your money is going. When you are older, maybe in a year or two, you can take over."

We then looked at her sister's spreadsheet.

Monkey was very curious about the household expenses, so MonkeyMama gladly showed her such. She saw the amount of money MonkeyParents brought in every month. She was pretty stunned by how much things cost to run the household. She noticed the biggest expense was the mortgage. She couldn't believe it was not free.

"Do you pay for the house forever?" she asked.

"No, only for 30 years."

MonkeyMama took the opportunity to explain why we needed to save money. If either MonkeyDaddy or MonkeyMama lost the job, we could use the money to pay for the house.

Monkey asked what happened if we didn't. MonkeyMama replied, "We would lose our house and live on the street. There are people like that."

"We can't live in a hotel?" Then she answered her own question, "Oh yeah, it costs money."

Naturally we went over the expense category on children. We could tell that she was very interested in the lesson and wanted to continue. We had to make her stop because it was getting late. We promised we would share more later.

Posted by Mike at September 11, 2011 10:30 PM

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