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  • Antique Mommy’s Bail Out Plan – Step Two

    October 2, 2008

    Here’s where all you lovely people who left nice comments yesterday will turn against me.  But it has to be said. This financial crisis? It’s your fault. Well, not all your fault, but you are a component of this complicated mess.  No, no, not you personally.  Well maybe you personally, I don’t know, but I mean you and me, the American public — Democrats and Republicans and yes, even those wacky Independents, those crazy kids. 

    This crisis has been in the making for the last 40 years.  Universally speaking — which means I’m speaking generally and not specifically about you or your child, because no, you are charming and responsible as is your child — but we have done a cruddy, cruddy job of teaching our kids about money, teaching them to understand its power and teaching them to respect it.  We’ve not taught our children to delay gratification, to save up, to be good stewards.  We’ve got to do better and not to overstate it, but our nation depends on it. We can’t keep going on this way.

    I think most of the people who got caught up in mortgages they couldn’t afford were not bad people, but people who did not understand what they were getting into, people who were drunk on the notion of getting nicer homes for their families, people who did not understand money.  I think mortgage lenders took advantage of them because they could and because they were getting rich in doing so.  I don’t want my child to be taken advantage of in this way, I want him to understand how the system of money works.

    So then, Step Two of Antique Mommys Bail Out Plan includes Mandatory Financial Education starting in 1st grade or sooner.

    Yes, you read that right — 1st grade. Or sooner.

    I personally think that financial education, like sex education, would best be taught at home where parents can teach their children not just about the mechanics of money, but also about respect. Since that obviously is not happening, our education system needs to teach kids the fundamentals of economics, credit and compounding interest and the importance of saving and the consequence of buying things you can’t afford with money you don’t have. And I just don’t think you can start too soon.

    Earlier this year, we bought Sean the book The Ox Cart Man, a very simple story about a farmer and his family who work the land and bring the fruits of their labor to market. It is a story that explains at the most basic level the economic cycle from farm to market and back again.

    Reading the story has presented us with many opportunities to talk with Sean (a four-year-old) about how the things we buy at the store get there and how we pay for them, where we get our money to pay for the stuff we buy at the store and how our family always always has to balance our supply of money with our demand for the things we need so that we don’t run out of money – not just for today but well into the future. He has been hearing this message since he was about two. By the time he’s 18 and heading off to college, hopefully it will be engrained in his thinking that money is a powerful and precious resource that is to be handled with care and respect. If not, he will be in for a hard lesson because, unlike the government, his parents will not bail him out.

    I urge you strongly to start talking to your kids about money right this very day and to make it part of your daily conversation. Look for opportunities for them to experience the consequences of good and bad financial decisions now while the price of a mistake is low.  But more importantly remember that you already ARE teaching your kids about money by your own spending and saving habits and attitudes. They are watching you closely.

    So then.  What are you going to do to be a part of the solution?  Other than the extra $7000-$10,000 you’ll be paying in taxes.  What are you going to do to equip your children to be financially responsible adults and change the fate of our nation? 

    * * * * *

    Step Three of Antique Mommy’s Bail Out tomorrow which involves making it illegal for credit card companies to send me blank checks and unsolicited credit card applications. Leave a comment or email me with your suggestions for reform and if I like them, I’ll incorporate them and give you credit for your super awesome fiscal fabulousness.

    72 Comments »

    1. jen elslager says:

      So wise.

      October 2nd, 2008 at 3:35 am

    2. midlife mommy says:

      Wow; this post was right on time for me. I have been noodling the idea of whether it is a good time to start giving my daughter an allowance (she just turned four). I have all the usual questions — is this the right age, how much, should it be tied to chores, etc.

      October 2nd, 2008 at 6:05 am

    3. Steph @ Problem Solvin Mom says:

      When my daughter get a bit older, it has always been my plan to use her allowance to help teach her about money. I know some people don’t believe in an “allowance”, but I think there is great value in teaching a child about saving, spending and giving through a small allowance each week. My plan, at least for now, is for her to save half, give 25% to charity and keep 25% for whatever she wants.

      I would agree that there has been a definite shift from saving to spending in this country, a focus on today rather than the future. I was shocked to hear how many professionals I work with that would be in financial difficulty if they miss one or two paychecks, or even some overtime.
      I am a saver to my very nature, so other than unexpected bills or a job loss, I have a hard time relating to how this could happen. Unfortunately all of us are going to pay for this mess, and I hope the bill that is eventually passed is one we can all live with, one that keeps this craziness from happening again. And what really gets me worked up is the millions of dollars the crooked politicians that were involved with all of this are walking away with.

      Okay, how many people did I offend? Hopefully not too many…

      October 2nd, 2008 at 6:15 am

    4. Donna W says:

      ANTIQUE MOMMY FOR PRESIDENT!!!!!

      October 2nd, 2008 at 6:31 am

    5. Mary @ Simple Things says:

      This is what I’ve been saying for the last week. Yes, corporate america and the government play a big part in this mess, but so do we. People making $30K who went into the bank and got a loan for a quarter of a million dollar home were just being greedy. They didn’t listen to the terms of the loan. They didn’t care that their payments would triple in a couple of years. They were getting a McMansion! Greed, it’s been getting us in trouble for years.

      Please don’t forget to outlaw credit card companies on college campuses in you next section. I find that one of the most deplorable practices ever.

      October 2nd, 2008 at 7:05 am

    6. Sarah at themommylogues says:

      My girls are 3 & 5. Last night I bought some small pencil boxes (20¢ each) for each of them for spending, saving, giving to charity. That way we can get started on all of this with them. I also want to get them more involved with our Compassion child, so they see what the give away portion can do, and understand how incredibly blessed and even spoiled we are. Sometimes I refer to my husband as Mr. Fiscal Responsibility. So I have no doubt my kids will learn well. For example.

      We do not carry a credit card balance. Ever. BUT. We use our card like crazy. We use it for everything. Every time you use the card, you keep your receipt and write it down in the checkbook as if you wrote a check for it. At the end of the month, it’s all accounted for in our checkbook, and we can write one check to the credit card company. It gives us a little bit of wiggle room since the money isn’t actually gone before we write the check. And we use a rewards card, that gives us 3% back on every purchase and 5% at a grocery or drug store or gas station. We use our points for extra spending money. It usually amounts to $100 every few months. No credit card balance. Free money.

      October 2nd, 2008 at 7:36 am

    7. Wendy says:

      AMEN!

      October 2nd, 2008 at 7:37 am

    8. Magi says:

      I’m a believer in allowances, too. My father wasn’t. I remember begging for an allowance as a child. He told me I didn’t need one because he’d buy what I needed. I soon figured out he was right. With an allowance, I’d only have a few dollars a week. Since he was a workaholic with a guilty conscience, I was almost always able to get him to buy what I wanted. This was not the best financial lesson to learn.

      My daughter will have an allowance, part of which she will have to put into savings. Right now, she thinks money is food for her piggy. I know she’ll outgrow that, she’s only 2 1/2, but piggy will always get his share.

      I teach personal finance as part of a class at the high school level. It’s shocking how little they know about money when they come to class.

      October 2nd, 2008 at 7:39 am

    9. Tracy says:

      Yep. Didn’t lose me – you’re still preaching to the choir. And I started to write a zillion paragraph comment, so instead I will take that energy and try to write a blog post. Of course, right now I’m supposed to be proofreading my husband’s paper, so I’d best get back to that first.

      October 2nd, 2008 at 7:41 am

    10. Antique Mommy says:

      Allowances are a great start, but I encourage you to go creatively beyond that. Play store with your kiddos. Set up a little toy store of their toys and you pretend to be the owner and they pretend to be the customer with only so much money, the next time you be the customer. Another thing you can do is when you go to the store, talk about the process. Drive around back and show them where the big trucks bring in the merchandise, talk about how the stuff you buy allows the store owner to pay the employees so they can buy stuff for their family, etc. I know it’s hard when you’ve got a lot of kids with you, but I’m just saying look for those opportunities starting when they are two and keep talking about how every transaction has a consequence, good or bad.

      October 2nd, 2008 at 7:57 am

    11. Karen says:

      I’m wondering if you have any ideas on how to keep rent affordable – specifically to keep it affordable in places where schools are good. My husband and I resisted many temptations towards home ownership these past 8 years or so, knowing full well it was too big a stretch for us based on our income, with three kids. However, it has been an incredible challenge to afford rent in the suburbs! We feel the pull to get the credit and buy the house all the time (happy today we have not, but it pulls at us), because at least our money won’t be “wasted” on rent.

      I guess and equal an opposite response would be to greatly improve the schools where the housing prices are so much lower – but it seems like a chicken and egg type of cycle. And, I earnestly feel that we are not wrong, selfish or irresponsible for wanting our kids in good schools – sometimes, it sounds like people who are a bit better off than us want us to see that a good public school education for our kids is a luxury my family can’t afford – but I think my kids need that for a brighter future & the main reason we live beyond our means (and we do, I admit that) is that the housing cost (including heating a suburban home) are way more a percentage of our income than they should be. So, I’d like to see some preventative measures to help those of us who truly should be renting make it work.

      October 2nd, 2008 at 8:04 am

    12. fern says:

      My kids get an allowance. I think that as a member of the family they have a right to have a little cash. They also have to contribute to running the house–doing chores, helping out, etc. For major jobs, we have been known to give bonuses. They buy their extras–we take care of clothes, food, etc. But as teens, there is a lot they want. They have had outside jobs, too. Sometimes when they want something really big–athletic equipment, bigger cages for animals, we will split it with them. It helps them learn responsibility, but also that we are their to help them while they are kids. My college kid has to pay for his own text messages–but I pay for the phone–because I want to get a hold of him.

      October 2nd, 2008 at 8:13 am

    13. Jeanne A says:

      It is truly rewarding to see my 18 year old good with his money. I have some others that aren’t so good. Same parents, different personalities.

      October 2nd, 2008 at 8:17 am

    14. Kim says:

      2 words: Dave Ramsey

      For adults, for families, for kids, for Congress.

      Our kids save/give/spend their EARNED money. They have borrowed – and sacrifice to pay back. They have waited until they could afford. We are nipping that “entitlement” attitude in the bud.

      October 2nd, 2008 at 8:23 am

    15. Mary says:

      I have spent the last few days wondering where “we” went wrong. I compare my childhood to my children’s. Here is an example of the differences. I live in a coastal area. When I was growing up, we had a great little tonka dump truck that we took to the beach for sand play. One family of 4 kids shared one truck for our entire childhoods. Fast forward 30 years. My son had EVERY large Tonka Truck ( because they were always on sale and cheap!) After 2 agonizing trips to the beach, I stopped taking my children to the beach because it was too hard to take ALL of the trucks to the beach and I didn’t have the energy to fight about it. Our “stuff” was weighing us down and prevented my children from enjoying a wonderful form of fun and recreation. Now that my children are 16 and 18 and wouldnt be caught dead at the beach with their mother, I look back and wish that we had only bought one small tonka truck and gone to the beach every week to have fun, swim, enjoy nature etc. I wish there was not so much cheap, plastic, STUFF available to weigh us down.
      My mantra now is, reduce, reuse, recycle, refuse! Refuse to buy “stuff” that is just satisfying the urge to shop.

      October 2nd, 2008 at 8:27 am

    16. Renee says:

      AM,

      I have to agree with you that this is our fault. I’ve written about it a couple of times already. Here’s something a lot of people don’t even think about: in the 1970’s…there WAS NO CREDIT CARDS, and people didn’t even like taking out a mortgage on their house, many SAVED IT FIRST, BEFORE THEY SPENT IT!! So, in the last 30+ years we have based our economic success both as a nation and individuals on money that doesn’t even really exist! Now where are we going to get another 700 Billion? The government doesn’t have that money, the corporations expecting the government to bail them out don’t have that money, and Americans certainly don’t have it either…

      Sorry, this very subject gets me so fired up…I’m with Kim who commented earlier…Dave Ramsey!!

      One last thing, as far as kids go, I love what you’re doing with Sean to teach him about money! You might want to take it one step further and check out Financial Peace Junior. It’s a neat program for kids that teaches them (from age 3!) that MONEY=WORK. He says to put kids on commission and not give them an allowance…that way they understand that in the real world, if you don’t do anything except expect someone to give you money, you’re going to be broke.

      October 2nd, 2008 at 8:40 am

    17. mrsfuddieduddie says:

      I love your view of this crisis and being a grandmother and great-grandmother I believe your
      right in educating kids early. I just took a Dave Ramsey course and he has your same principles. I love reading your site and viewing your humor and wisdom.
      Keep it up and may the good Lord bless you with many
      fruits of your labor!! Mrsfuddie;)

      October 2nd, 2008 at 8:48 am

    18. Angie says:

      Amen, again!

      We just opened savings accounts for our two boys (4 and 6), and have been teaching them how to budget, how to earn money (a dime for every chore around the house), how to give, how to save, and how to make wise purchases. It’s a shame our government couldn’t have done this years ago.

      October 2nd, 2008 at 8:50 am

    19. katherine says:

      saving: such a novel concept.

      i am blessed to have a husband who was taught to respect money. he is a great saver! i was taught about money when i was young through, but not concepts and principles of living on less than you make when i was older (because my parents carry some debt and couldn’t teach me about something they didn’t do). if it weren’t for my husband, we wouldn’t have 4-6 months of expenses for emergencies. its a great to not feel “enslaved” to creditors!

      have you seen dave ramsey’s bail out plan? he calls it his common sense fix. you can read it here: http://www.daveramsey.com/media/pdf/the_common_sense_fix.pdf

      October 2nd, 2008 at 8:51 am

    20. MotherPie says:

      Only one of my three children had a decent class on personal finance — and that is my son at college. Every time I’m in a store and they ask me if I have a charge account and how I’ll save $$ on that purchase by having one, I launch into an educational program for the clerk.

      This is how you keep a population enslaved. Literally. Think about how Indians were given “credit” so when their gov. payments came in they owed it all. Same for slave plantations.

      I can’t believe how many offers of free credit cards and pre-approved loans came in for my college age kids.

      It is hard to parent when the culture has such different standards and values.

      October 2nd, 2008 at 8:52 am

    21. Marsha says:

      AMEN Sista, Preach On!! My husband and I were somewhat shocked a couple of weeks ago when we saw a new subdivision in our town advertising “$.99 down to get in your new house.” Yes, I did put $.99 CENTS not $99 dollars, the decimal is in the correct place. How crazy is that to be able to put 99 cents down and get in a new house? These were not small starter homes either. I just had to shake my head in disgust. Can you say “predatory lending”? I remember the days when you had to make a substantial downpayment to purchase a home.

      I love your site. I check everyday for a new post. Keep it up.

      October 2nd, 2008 at 8:56 am

    22. Refrigerator Art blogger says:

      Have you ever considering home schooling? You’d do a great job with it.

      October 2nd, 2008 at 9:01 am

    23. Heidi says:

      I just commented to my husband this morning that our generation would not be emotionally equipped to handle another depression because we are too greedy and expect such a high standard of living for ourselves. Sometimes I think we are the only family in our area who tries to live BELOW our means. We’ve often told our kids “just because we can afford it, doesn’t mean we should buy it.”
      Great post.

      October 2nd, 2008 at 9:06 am

    24. Kimberly says:

      I think you are right. When my hubs and I got married, we wanted to buy a house. We were both fully employed lawyers (not SUCH a rare thing in the D.C. suburbs). You should have SEEN the mortgage brokers salivating at the thought of us. And offering us astronomical mortgages. When we said we wanted one that we could afford just on his salary b/c we wanted to start a family and not be strapped, they looked at us like we were crazy. Seriously. We had to keep reiterating OUR maximum mortgage number. And the mortgage person and the RE agent were just baffled that we didn’t want a big house in the toniest suburb.

      Every time we looked at houses, we were told that we could “afford so much more house” if we would just pony up my salary.

      But, we stuck to our guns. And when I quit work and started having babies, we weren’t strapped. Unlike many of my colleagues.

      I do think it is important to remember, when we talk about “predatory lending” that the govt started this by requiring companies to lend to less than stellar credit risks.

      October 2nd, 2008 at 9:07 am

    25. sprittibee says:

      We preach about how bad credit cards are. However, we do have three credit cards. One at home depot for the lawn mower so we didn’t get kicked out of the neighborhood, one at Old Navy in case the kids needed clothes because they outgrew something, and one for the (GREED) camera. A long time ago we used to really have a lot of credit card debt. Now it is mainly cars/houses – which isn’t that much better… but we’re glad to not be on the street.

      I agree that we all need to stop living for self gratification. The last three years have taught me that gardening is beneficial to not only your body, but your wallet – eating at home is healthy & CHEAPER – and you won’t die if you wear clothes from the thrift store and Good Will. Making better choices is a family affair… which if done right will trickle down to the next generation.

      October 2nd, 2008 at 9:25 am

    26. Antique Mommy says:

      Was there not a way, a program, a system, that lending agencies could lend to the “less than stellar” credit risks without putting SO many in SO far over their head? Home ownership is good for the country, and people who are less able need a little help, but when people are getting rich making bad loans, ie predatory lending, therein lies the problem. I’m not a financial expert and don’t claim to understand the finer points. What I do know is that WE ARE ALL in a big mess and WE ALL have to contribute to the solution.

      October 2nd, 2008 at 9:30 am

    27. Luke Holzmann says:

      I have long asked that instead of spending the $2.59 on every unwanted credit card applications, these companies should just wire me the money. I’d be making much more that way than the lame 1% my bank gives me in “interest.”

      ~Luke

      October 2nd, 2008 at 9:30 am

    28. Annie says:

      This is a great post. We kids were taught about money right from the time we were kids. That is true for both me and my husband. It has helped us tremendously in our financial decisions. Maybe its also becasue both of us are from families who were not extremely well off when we were growing up. Our parents never had a creidt card until 3 years ago. Growing up Dad always told us: “Cut the shirt according to the cloth.” Wise words to live by.

      October 2nd, 2008 at 9:35 am

    29. WrapAroundSam says:

      Can everyone say the word GREED? Capitalism is all about making as much, as fast as possible and IMO the banks and other lending institutions have gotten way, way out of hand. Possibly a bit of regulation is necessary?

      October 2nd, 2008 at 9:37 am

    30. rrmama says:

      AM, I think you have covered it all. Now where do we send your letter to. We need everyone to see this. Everyone is part of the problem, but everyone can also be part of the solution.

      October 2nd, 2008 at 9:38 am

    31. Iota says:

      This is going to sound pious, so apologies in advance. I think it is important to teach our kids to be able to distinguish wisely between what they need, what they want, and what the prevailing culture tells them they need and want. Otherwise they are at the mercy of the advertisers (clever clever people), and peer group pressure. Self-worth comes in here. We need to teach them that they are interesting fun people because of who they are and what they do, not because of the latest fashion they are sporting, or the latest accessory they own.

      October 2nd, 2008 at 9:42 am

    32. Patti says:

      So right!! Our family has always lived within our means – we have no debt, at all, except a SMALL mortgage that we pay faithfully every month and have for 15 years. It frustrates me to no end that I, who has watched my money like a hawk all of my life, am now going to have to help pay for others who have lived in nicer homes, driven nicer cars, worn nicer clothes, eaten out, etc. – lived way beyond their means. I know it’s not Christian, but I’m tired of paying for everyone else to have a good time.

      October 2nd, 2008 at 9:46 am

    33. Emily says:

      I thought about yesterday’s post as I got dressed in my clearance Target clothes and changed the clearance Target sheets on my son’s bed.
      I totally agree about the “peace and prosperity” of the 90’s (AKA Keeping up with the Jones)that has led us as a country to this tough financial time. Thankfully, in 2000, when my hubs and I bought our first house, we had an ethical mortgage broker who approved us for a small loan. We even bought a house much less than that amt too.
      We had people around us offer us a woeld of advice. Even at 23, we were very focused on not living above our means. We knew that we would not live off of 2 incomes for long, so we did everything we could to live off one. We saved a large portion of my income for several years. I’ve stayed at home for the last 4 1/2 years, and we’ve had very few financial struggles (although at the time those struggles seemed much bigger than they were).
      We try to teach our children the value of hard work…Earning money, saving money, TITHING money, etc. Already, at 4 years old, my daughter has a giving heart. She gave all her $12.44 of hard earned cash to our church. My goal is to teach all my children the value of hard work and the basics of good stewardship. Hopefully, when they are in their 30’s and older, they won’t have to struggle like so many people are now.

      October 2nd, 2008 at 9:58 am

    34. Common Mom says:

      Ah yes – the money talk. Soooooo important! Most children have no clue how their parents pay for things, or how much things even cost for that matter!

      My kids are now 8 and 5. A couple year ago, neither one of them understood the ATM. We tried to explain that we can’t just go to the bank and get more money. We can only take out money we’ve already put in there. So, we bought Dude an ATM bank. It’s AWESOME! Really, the best thing ever. It’s like a piggy bank, but it has an ATM card, and a PIN (which he knows to keep secret) and he puts the money in and it keeps track. However, he has to specify if he’s making a deposit and count bills himself (it counts the coins). When he takes money out, he has to count it and enter the withdrawal and it’ll tell him how much he has left. It really is awesome. Princess will be getting one soon.

      On top of that, we also tell them that anytime they take money out of their piggy bank to buy something, they have to take that much more out to put in their savings account at the bank. So if they want to buy a $10 toy, they have to have $20 and put $10 into savings. I also make them factor in tax when they go to buy something . . . if they have $10, they can’t buy a toy that is $9.99.

      I make them look at the prices at the grocery store and choose which brand is less expensive. I refuse to buy them $40 tennies . . . they have to choose something similar for less, or they have to come up with the difference from what I’m willing to pay.

      When they ask why we don’t have a big screen TV “like so and so”? Because we don’t NEED it. Ours works fine. Why don’t we have a Wii? Because when would we use it? We’re always outside riding bike, hiking, playing, sledding. And when we are inside with “nothing to do” – we play games. It’s not money we need to spend. Why don’t we have a bigger house with a huge basement? Because we want to be able to eat out every now and then, and turn the lights on, and pay for gas for the car so we can go hiking up in the beautiful mountains.

      Basically, they’re learning that everything is a trade off and there are consequences for everything. You have to have this now, you don’t get that later.

      I love your plan. The problem is, most adults don’t know how to manage their money, so they can’t teach their children. And, I think it’s ridiculous that parents won’t let their children in on the family finances . . . how else would the kids ever learn how to budget and figure out how to use the money in the wisest manner? Don’t want to worry the kids with financial issues? You’re doing them a disservice.

      Sorry to hijack your blog on this one. Guess I had an opinion.

      October 2nd, 2008 at 10:00 am

    35. Sarah says:

      You go Antique Mommy!!

      I wish everyone would forward this (and these comments) to their Senator or State Rep so they would hear what Main St. American has to say! This is a democracy, the people have the right to be heard!

      October 2nd, 2008 at 10:04 am

    36. Brigitte says:

      We have credit cards, but never use them unless we already HAVE the money (or will have it by the time the bill comes). We’ve never once carried a balance over to the next month. I’m sure the credit card company hates us, but we’ve always felt it makes more sense to save up for something before we get it (and if we can’t – car, house – pay it off asap).

      Our daughter is only now starting to notice things on TV and want them, so I am only now starting to explain that they cost money, and daddy has to go to work to make that money, etc. Small steps!

      October 2nd, 2008 at 10:07 am

    37. Andi says:

      Amen & preach it sister!

      Luckily for me I married a very fiscally conservative & sensible farmer/rancher. Mostly we are living within our means. This means things such as buying a fixer upper of a house that we intend to stay in for a long time, we don’t get a new SUV every time Chevy changes body style, didn’t buy my daughter the $150 hair straightener she wanted, she won’t get a new cell phone 2 or 3 times a year like some of her friends do, we take one vacation a year and do so on a budget, I buy on clearance or at outlets 90% of the time, we don’t eat out often (except for 1/2 price night @ DQ on Tuesdays), and we waited for 10 years to do the homeremodel we are doing now. We talk to the kids often about finances, and explain why we do things the way we do. We’ve told them about the 401K I have, and before the market tanked I was feeling pretty good about that! My husband has been building up the cattle herd and paying off land and upgrading equipment to increase everything’s worth, but doing so at a reasonable pace. When something goes wrong at the house 9 times out of 10 my husband fixes it and our 9 year old son helps. We are trying to teach the kids to be resourceful and conservative and responsible. The outside influences to be the opposite are crazy and constant.

      Unfortunately for us my parents do not live the same way. They don’t live within their means, and haven’t for a long time, and now they are having big trouble. They got quadruple whammied this year-mom with cancer, dad with congestive heart failure, cars breaking down, and their oldest son starting college. At the beginning of last year they bought my brother a brand new car. Now they have one car between them and are severely financially strapped. Their insurance is not nearly adequate so they will be paying off medical bills for a long while. Up until a few years ago they had no insurance. I wish they would have better prepared instead of taking trips and buying video game systems and toys and dogs.

      October 2nd, 2008 at 10:08 am

    38. Linda says:

      You are right on lady!

      Today people want it now…right now! The microwave age. There is a respect that is needed today. Good advice!

      October 2nd, 2008 at 10:54 am

    39. Katherine says:

      Well, perhaps I will be the unpopular one.

      Greed and irresponsiblity are tough words to assign to folks who were largely told that the house they were buying (at a price already artificially inflated by the market) would continue to rise and that affordability would come through equity.

      Realize, its not just the families in McMansions with Lexus’ (Lexi?) who are suffering and contributing to this problem. It’s very likely also your neighbors who aren’t as savvy and save-y as you who have suffered a period of unemployment related to, I don’t know, pick your poison – the real estate market (how many “title companies” were in your local strip mall 8 months ago? how many today?), the associated downturn in new home construction (honest drywall hangers suffering all over despite their good work ethic and responsible spending) the following downturn in the auto market (Detroit dies again, not to mention your local salesmen’s salary is generally running 30% compared to previous years).

      While folks might feel enraged about helping out the Lexus folks, lets try to remember the honest folks caught up in this mess through no fault of their own.

      October 2nd, 2008 at 11:07 am

    40. Janna says:

      My main issue with all of this is that no one is willing to accept personal responsibility. If I get myself into debt (which I have not), I do not expect anyone – especially the government – to bail me out. I screwed it up, I have to fix it. Personal responsibility, along with personal financial responsibility, are two of the greatest gifts we can give our children.

      Thank you for being vocal about this!

      October 2nd, 2008 at 11:47 am

    41. MrsNehemiah says:

      I’m thinking that the $ for this required financial course, should be coming as a tax on advertizement. the more often a product is on the tv, radio, web, billboards etc., the higher the tax on that advertizment & the more $$ for teaching fiscal responsibility.

      MrsN

      October 2nd, 2008 at 12:35 pm

    42. Anne says:

      I couldn’t agree more! Might I recommend a book called “Rock, Brock and the Savings Shock” written by my boss. 🙂 Rock and Brock are twins but Rock is a spender and Brock is a saver. The book gives a good lesson on the benefits of saving.

      http://www.amazon.com/Rock-Brock-Savings-Shock-Sheila/dp/080757094X/ref=sr_1_1?ie=UTF8&s=books&qid=1222964951&sr=1-1

      October 2nd, 2008 at 12:40 pm

    43. Jenn @ Casa de Castro says:

      You’re just oozing with wisdom!

      When we were little, my dad had an envelope for each kid in which “our money” was kept. We could put our allowance in there, birthday money, whatever. The outside of the envelope served as a sort of ledger on which he would record and date – with us watching – every single deposit and every withdrawal, complete with a description of what the money taken out was used for. On a few occasions, he needed to “borrow” some cash, so there’d be a meeting at the envelope for proper documentation of where our money had gone.

      What happened was that we learned EARLY about saving for things and NOT buying something if there wasn’t enough cash on hand to cover it. We learned about the freedom in knowing there was cash if we actually, you know, NEEDED it. As adults, we’re debt free (except for sensible, affordable, reasonable mortgages) and we’re lovin’ it. We’re not slaves to any lenders, but instead are grateful our parents took the time to teach us to be good stewards of the gifts we’ve been given and to handle money responsibly.

      October 2nd, 2008 at 1:03 pm

    44. JoAnn says:

      As a sixth grade school teacher, I spent the last 4 weeks of school teaching economics using Ing Direct’s website for children. If you haven’t checked it out, it is amazing. I homeschooled my children and both of them learned so much from the IngDirect site for children. Now, both of my kids have accounts with Ing and are great savers:>
      But it was crazy when I taught this subject in my classroom as the children’s parents would have fits because I stressed the importance of saving! I would give each child a dollar and assign the homework of opening a CD with IngDirect. So many parents called me and told me that they didn’t want their children to have saving’s accounts! Or they argued with me that a dollar couldn’t open a CD (it can on IngDirect)… I don’t know how much my students learned as their parents sabotaged any financial education.

      October 2nd, 2008 at 1:03 pm

    45. MarathonMom says:

      What you talkin bout AM? Last night on the newsbox they said they passed the bailout so we can lease cars and get credit cards!!!! And I think the 3rd one was get a mortgage, but I was too busy trying to decide whether to lease the Mercedes or the Lexus.

      October 2nd, 2008 at 1:26 pm

    46. Laura says:

      Well put! Bravo for you for talking about the elephant in the room. Our problems were indeed caused by plain folks’ mishandling of their money. (And the greed of the sub prime lenders. They knew full well that those poor suckers they put into those loans could never pay them off.)
      Can’t wait to see tomorrow’s post.
      Laura

      October 2nd, 2008 at 1:27 pm

    47. Diamond says:

      How we pay,we pay dearly. We can only teach what we know. An expermental process was ongoing in our country to make us a moneyless society as told to me by an IRS friend, what communities that was taking place in I do not know. I know having money, even wheelbarrows full of money when in severe economic crisis will only get you a stamp,then government will tell you what you can purchase with that stamp,that is documented history. A news story, reported on a major network, related a story that US.Savings Bonds were not being honored and they are now only a piece of paper. I wonder if that story was accurate. Wall Street is in Manhattan, and Manhattan was purchased from the Indians for 24 Baubles,(showy of little value) wonder what kind of baubles they were.I don’t know where I’m going with this rambling but we are a young country with much to learn. First I must learn,
      then I can teach. History always repeats itself. I’m left with a question what can and will we do? It is not an easy question. What do we do when our government fails? We pay dearly.

      October 2nd, 2008 at 1:50 pm

    48. Tam says:

      How about that foul “E” word….entitlement? Doesn’t much of this mess come back to that notion? When my husband and were first married, we did not feel entitled to live in the size home our parents owned. We did not feel entitled to two cars, or even one new one. We operated with one used car. We rented and saved (yes, saved!) for a down payment on a house, smaller and less elaborate that what our parents owned. Eventually, we bought a new car, AFTER the students loans were paid off. My husband and I were 40 years old before we owned a new car. We still have the ten-year-old used car. Meanwhile, I have students at the university where I teach who are driving brand new cars given to them by their parents, who are also paying their tuition. My husband and I were both blessed with parents who never allowed us to believe we were entitled to anything. Allowances are a fine thing, but as parents we must get the point through to our children that a lifestyle is something you earn, not something you are born into.
      Thanks for this topic, AM. I really enjoy your blog.

      October 2nd, 2008 at 2:43 pm

    49. Angela says:

      You don’t need strokes—or maybe you do and you play it cool, but this is VERY well written and I applaud you for writing it.

      I’ve got my Amex out, and I’m going to buy 3 copies of that book for each of my children. Right now. One of them is only 1, but I want him to have it in his hands, the moment he wants it.

      I kid. I am buying that book though. Thanks for the tip.

      October 2nd, 2008 at 2:51 pm

    50. Kelly @ Love Well says:

      My husband used to work for a company that did sub-prime lending. So to answer your question AM: There isn’t a program, necessarily, to protect people who got in over their heads. But that’s the pro-con of capitalism. I’m no economics major, but from what I understand, greed is the flip side of a free market. I think it’s similar to having freedom in any area of life. The more freedom, the more risk that someone will hurt themselves or others. But that’s the risk you take.

      October 2nd, 2008 at 3:05 pm

    51. happy geek says:

      I totally agree about teaching your kids. OVER and OVER. My husband grew up under that kind of teaching and we are so blessed by it. We have 15 years of post-secondary between us and got very little help from family but NEVER took out a loan. We will rip up our credit cards the day we carry a balance and pay cash for our cars.
      However, from the same teachers came his sis. She is terribly financially irresponsible because his parents taught them a second lesson (much more subtly.) We will always bail you out if you screw up. Every time my MIL writes a cheque she swears it is the last time, but she continues to throw away her hard-earned money on her daughter’s foolishness.
      So, don’t just teach your kids, model it. Live it. Let them learn the hard way. Let them screw up a time or two.
      Gonna get that book out of the library. (too cheap to buy it!)

      October 2nd, 2008 at 3:57 pm

    52. Antique Mommy says:

      Kelly, I’m all for anyone taking all the risk they want. I just don’t want to have to pay for it if it doesn’t work out for them.

      October 2nd, 2008 at 4:48 pm

    53. mom of three says:

      Can you figure out how to stop the airlines from selling info from the frequent flyer club? My three-year-old son receives at least one credit application a week. That right there is a big part of this mess..offering credit to young consumers. I got my first card on my college campus but was disciplined enough to never spend more than I could cover at the end of the month. Our family has no debt, except the modest mortgage, we have money in the bank, and we have two vehicles…both were bought used with cash and, yes, one is a Lexus. If we would all choose to consume wisely and with discipline, that would be the best lesson for our children.

      October 2nd, 2008 at 4:50 pm

    54. Terri says:

      Amen to whoever said Dave Ramsey! Wonderful tool for anyone of almost any age. And would be good for our government too!

      October 2nd, 2008 at 5:12 pm

    55. Shalee says:

      It’s because Mr. Right and I have struggled with money our whole married life that we have been adamant about teaching our kids about money. They hear no a lot, along with the reason that we can’t/don’t want to make a purchase. They’ve made their share of financial mistakes because sometimes experience is the best teacher. We truly want our kids to understand that it is God’s plan for us to be free from the burdens of this world, especially when it comes to money.

      “The rich rule over the poor, and the borrower is servant to the lender.” Proverbs 22:7

      I hate that I had to learn the truth of this scripture the hard way.

      October 2nd, 2008 at 5:43 pm

    56. Colleen says:

      Is it ok to say I feel a little stupid? My folks taught us we had to work for what we needed, and perhaps we’d have a little left over for something we wanted, and I’ve lived my entire life within my means, simply, with no debt but a mortgage. Yes, I have credit cards, but nothing is charged that can’t be paid for in full when the bill arrives.

      Now, I find out I could have had everything I wanted, accrued enormous debt, and the government would help save me. Silly, silly me…..

      Perhaps this crisis will lead us toward a simpler lifestyle, focusing on family and friends rather than things.

      October 2nd, 2008 at 7:30 pm

    57. Stretch Mark Mama says:

      It’s been awhile since I’ve read that book. I’ll have to check it out again.

      Meanwhile, I totally agree about the sex ed thing. I started when the kids were 3-4 and as awkward as it was, it’s been good, good, good for them to hear it from me first. Here’s my review of my favorite book series on the topic:

      http://stretchmarkmama.blogspot.com/2007/06/let-me-tell-ya-bout-birds-and-bees.html

      October 2nd, 2008 at 7:59 pm

    58. Carrie says:

      Thank you, thank you, thank you. As a first grade teacher, I completely agree that children should be taught financial literacy early. They need to learn to set a goal and then SAVE their money until they have enough to buy what they want.

      Financial literacy should be required for graduation. It should be taught in every grade. It’s right up there with language arts and math.

      Like JoAnn said, INGDirect is a great resource.

      October 2nd, 2008 at 8:58 pm

    59. Sue says:

      Please add to to the “It ought to be against the law” list– mailing credit card applications to young people. My college-age kids get many applications, which I promptly throw away because I wish we’d never seen one. I wish I had started listening to Dave Ramsey earlier, and I wish I could get my other half “on board” now. I wish more churches would offer his books as studies. I read his books and listen to him almost every day. Gotta go– debate is on now– may add more later.

      October 2nd, 2008 at 9:03 pm

    60. Cyndi says:

      My mom worked through a Junior Achievement in-school program with 1st-5th graders; tho I don’t think there are requirements, it’s a great program.

      October 2nd, 2008 at 9:26 pm

    61. Kathy says:

      You are brilliant, AM. I also think it should be illegal for credit card companies to send cards to college kids who do not have an income. Lots of college kids get in over their heads and ruin their credit right there. Go Ox Cart Man!

      October 2nd, 2008 at 11:39 pm

    62. Lorie says:

      This is something we started talking to our kids about from a very young age and we will continue to do throughout their lives!

      October 3rd, 2008 at 12:14 am

    63. Prairie Rose says:

      And don’t forget the chapter in Farmer Boy where Almanzo learns the value of fifty cents, and the rewards of investing vs. spending. Best financial lesson for kids ever, in my opinion!

      October 3rd, 2008 at 12:19 am

    64. The Roost says:

      Preach it sista, Preach it! 🙂

      October 3rd, 2008 at 12:25 am

    65. Dianne says:

      You go, girlfriend!!! I sometimes think about the difference between when I was a kid and right now in my own kids’ lives. Not that I was taking any fiscal classes, but the real-life examples were there. And they were very different from those my children see. Sigh. I am part of the problem. Recognition is the first step to recovery.

      October 3rd, 2008 at 9:59 am

    66. canadacole says:

      Amen.

      I’m so glad you said it. I only wish that more than those of us in the choir would hear it!

      October 3rd, 2008 at 10:13 am

    67. Janelle says:

      I feel the same way!

      We talk with our boys (0-6) all the time about money and how the things they want to do cost money and we only have so much money-thus we have to choose, toys every time we go to the store or save up for a family trip to Disney? Stop and buy ice cream cones or make it at home five times?

      They’re learning. I don’t want one of my boys to be forclosed on because they didn’t understand.

      October 3rd, 2008 at 3:38 pm

    68. Kira says:

      Not only do we need to teach our children to be financially responsible adults, but we also need to teach them how to delay gratification and to avoid equating possessions with worth.

      Children today are shockingly entitled. A chief complaint on so many parenting websites is clutter. Instead of spending money on “storage solutions,” how about buying less toys? I recently read an article on how the economy affected back to school. I expected to read about school lunch programs being cut and things like that. Instead, it was interviews with parents about how their children won’t be getting a new backpack this year and how all the kids have to walk to one bus stop instead of being picked up at their doors. What?!? I have had a grand total of 4 backpacks in my life – 1 for elementary school, 1 for middle school, 1 for high school, and 1 for college. I was very careful with them and I patched or mended them if they ripped. And I never heard of children being picked up by the bus at their doors. With the childhood obesity epidemic, shouldn’t we be making sure they get all the exercise they can get?

      We enforce the 10-toy rule. We only allow our 3-year-old daughter 10 toys at a time (books, art supplies, and sporting equipment don’t count and toys may have parts). If she gets a new toy, one of the old toys goes. We either donate it or store it for our next babies (we’re having twins in January). My daughter gets so much more out of her toys than her friends, who have countless toys. She also has an amazing capacity to amuse herself. Despite this, I get no support from my family and many of my momma friends. They all think I’m crazy and “mean,” but we’ll see what happens in the next 18 years.

      October 3rd, 2008 at 6:01 pm

    69. Adrian says:

      I am totally all about being smart with money and teaching my kids to be smart with money too. I’m going to write a post about it soon with some specific ideas.

      However, I do have a great idea for the bailout. Take the houses that have been foreclosed on and are sitting there empty. Sell them to people from New Orleans, Galveston, and other flooded areas in exchange for title to their flooded property and a modest mortgage. Then tear the flooded houses down and turn the area into a wildlife refuge. We would save billions of dollars in infrastructure costs by not having to rebuild all the flooded schools, roads, and other structures in the damaged areas that really aren’t fit for housing anyway.

      October 4th, 2008 at 2:55 am

    70. Jessica Washburn says:

      The Ox Cart Man = a great book!

      October 4th, 2008 at 6:26 pm

    71. Abbie says:

      We love The Ox-Car Man so much! It’s a favorite.

      October 7th, 2008 at 11:24 pm

    72. Karen {simply a musing blog} says:

      We are a nation of self-indulgent folks (I’m speaking about myself here too – so don’t hate me people). We have no concept of delayed gratification and want all the things our parents waited to get until they were in their 50s while we are still in our 20’s and 30’s. (I’m not in my 20’s or 30’s, but I still felt that way)

      That is why folks seek out bad risk loans and make the stupid (yes, I said stupid, again, don’t hate on me) decisions they make with credit cards. And that only one of the reasons why our country is facing the problems it is today.

      The other reason, in my opinion? (and this is strictly my opinion) is that as a nation, people have forgotten that our nation was founded on Christian principles. We are too busy serving our own desires to want to serve God anymore.

      2 Chronicles 7:14 states that “If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land.”

      Sorry for the diatribe…and for hijacking your comments section, but I’m praying that people will wake up before it’s too late. No one man (President) is going to be able to fix this mess – you’re right – WE have put ourselves in this situation.

      /rant.

      October 11th, 2008 at 11:27 am

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