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  • Growth Spurts, Money Jars, The Circle Of Life And Other Things

    November 2, 2009

    About a year ago, Sean’s grandmother gave him a money jar which sits on top of his dresser. It is a big plastic jar that looks like a pickle jar, only it has a slot on the top which shows a digital reading of how much money has been deposited.  The digital reading is about as accurate as taking a wild guess, or basically the same formula we are using to determine the actual cost of national healthcare.

    Be that as it may…

    Like his father, Sean likes to hold on to his money, so after a year of saving, the jar was half full with about $40, mostly in change.  Some of the money he earned from his towel folding business but most was given to him with impunity from recalcitrant grandparents, aunts, uncles and other nice people.

    Last week my favorite five-year-old was in a growth spurt or something was up because we had some attitude and obedience issues.  Normally he is a pretty compliant and polite little guy and doesn’t delight in giving me too much trouble. Which works out well for him since I don’t abide much nonsense.

    But, last week there was an incident involving the carpet in his bedroom.  I won’t say what the offense was because I don’t think anyone deserves to have their misdeeds recorded for all the internets to analyze and comment upon forever amen.  But it wasn’t an accident; it was premeditated, willful and on purpose. An accident I can easily forgive because who among us hasn’t knocked over a perfume display in Sanger Harris? Accidents happen. But this was no accident.

    I was in a quandary as to what to do about the incident because it was so far out of character for this child. I was really interested in getting to the bottom of why he would do such a thing more so than issuing a swift punishment.

    I was baffled.  I took a day or so to figure out how to proceed.  The side benefit of this delay was that it allowed him to stew just a little and meditate upon his actions.

    Finally, I recalled that one time my brother shot out the neighbor’s picture window with his BB gun and I believe my parents made him pay to replace it.  My brother is not now, nor has he ever been in jail, so I decided to go the personal responsibility route.  Rather than punishment, I decided that the appropriate thing to do was to have him take responsibility for his actions and make him pay to have the carpet cleaned. And that meant I would have to confiscate his money.

    He cried when I told him I would have to take his money to pay for the carpet cleaning.  “I was saving that money for an iPhone!” he wailed.  I told him that was really sad with as much sympathy as I could muster. And then I took away his money.

    The rest of the week passed with no further incident.  And although I never got to the bottom of why he did what he did, I did see in him a contrite heart. He was sorry.  So Saturday, I took all the silver coins and the dollars to pay for the carpet cleaning, but I let him have his pennies back for seed money for his iPhone.

    AD and I talk to Sean a lot about spending and saving so that he might grow into a financially responsible man. But we have some concern that because he lives a privileged life, that he doesn’t know what it is to want and to wait and to do without — which in our view are not bad things.

    So sometimes, in an effort to remind Sean of how good he has it, AD will tell him that when he was growing up, he just wanted to have enough money to be able to get a snack out of the vending machine at school. That was his idea of being rich.  But you know, these kinds of stories tend to fall on deaf ears.  All they hear is “Iwalkedtoschooluphillbothwaysthreefeetofsnowblahblah”.

    We are genetically programmed to say these things.  We cannot stop ourselves.

    This morning, for the first time in 11 years, AD’s work took him out of the house to work on a project.  All Sean has ever known is AD working in his office upstairs.  So this morning, as AD was heading for the door, dressed and carrying his brief case, it shocked us all just a little.  Sean stopped him and asked him to wait.  He disappeared into his room and when he came back, he handed AD a fistful of pennies. “Here you go dad, in case you want to buy a snack out of the vending machine.”

    So, maybe he was listening after all.

    I’m not really sure what in the heck happened here this past week.  I think we might all be going to through a growth spurt.

    Note: Sean is not getting an iPhone until he can buy me one too.

    What Happens When A New Car Kinda Gal Marries A Debt Free Kinda Guy

    October 29, 2009

    Go get a beverage, it’s a long one today…

    * * *

    A week or so ago, I saw on my Twitter stream that Dave Ramsey was looking for stories of people who have been living debt free for 10 or more years.  Since we had just celebrated our 11th debt-free anniversary, I took the time to send him our story in a paragraph or two.

    I was really surprised when the producer emailed me and asked if I would talk to Dave on the air on Friday because our story is not all that exciting. It’s not like we were $100,000 in debt, clawed our way out using Dave’s program and now live on a yacht in the south of France.

    We have been quietly living debt-free for eleven years because prior to our marriage we agreed that is how we would live.  But to be honest, 99% of the credit goes to Antique Daddy.  He does most of the work and provides the leadership and it has blessed me beyond measure.  Even though sometimes I don’t like it.

    Our story starts back in 1996 when I first met AD.  I was immediately and wildly attracted to him, not just because he is hot but because there was just a steadiness about him that really appealed to me.  Beyond being a person who shared my faith, which was of number one importance to me, he was sane and responsible and disciplined — all the things I am not.  The longer we dated, the more it became apparent to me that those things were deeply engrained in his being and not just paint on the surface, so when he finally asked me to marry him in 1998, I squealed and said, “I though you’d never ask.”

    AD and I both grew up lower middle class and poor but that experience shaped how we view money in very different ways.

    I hated being poor and not having the nice things that I saw that others had, so I worked hard and spent every dime I made on clothes and shoes and cars and other stuff that is probably at this moment in a landfill somewhere.  In my 20s, I got myself into credit card debt (twice because I’m a slow learner) in my quest to have nice things.  I was in my 30s before I finally learned that retail consumption is a monster that cannot be satisfied.  To this day, at the core of my being, even at nearly age 50, is a poor little girl who wants nice things and is a world champion rationalizer when it comes to new shoes.

    AD’s story is that his father died unexpectedly when he was eleven-years-old.  He grew up watching his mother sell Tupperware to support him and his two older brothers.  She did well, but there wasn’t a lot of extra money.  He spent many an evening at home alone while his mother went off to give a Tupperware party.  Like me, he decided that he didn’t like being poor and so he saved every dime he earned, which he pretty much still has.  To this day he thinks long and hard before buying even the smallest thing.  At the center of his being is a poor fatherless little boy who is scared of not having any money.

    I tell you this to illustrate that how we feel about money and how we deal with money is less about money and more about whatever ancient hurts and injustices we lug around with us.  We don’t just one day arrive at a financial philosophy, it has been shaping and building our entire lives.  But at some point, you have to face it head on and decide if it’s working for you or if you need to make a change.  If you are in debt, you probably need to come to terms with the emotional cues that are sparking your spending habits and fueling your bad choices.

    As we were planning our wedding, I read somewhere that the number one thing that people fight over is money. So prior to tying the knot we had a number of in-depth discussions about money and we realized that we had to figure out a way to merge our views on spending and saving if we wanted to stay married more than a week.

    I strongly encourage everyone who is thinking about getting married to do this.  It is reallllly important.  You’ll still fight about money but at least you will have some insight into your partner’s point of view.

    Before we walked down the aisle, we hammered out what would be our family’s financial philosophy, which is basically this:  If we can’t afford it, we don’t buy it. Period.

    Beyond that, the other thing that has served us well is that we agreed that neither of us would spend more than $100 without first talking to the other person.  There is a little bit more to it than that — we live on one income and below our means, we maximize all tax-free or tax-deferred financial vehicles, we never ever ever revolve credit and a few other very basic tenants. But at the core of it all, we agreed that we would not worship at the altar of conspicuous consumption.

    This agreement has on more than one occasion chafed me because I really like certain things that might be described as conspicuous, like new cars.

    I bought my first new car in 1977 when I was 17. It was a sweet little ride, a 1977 Mustang, black with red pin stripes, wire wheel hub caps and red look-like-leather seats.  To my credit, I paid for it myself – my parents did not help me other than with half of the initial down payment. Their financial philosophy is this:  “You kids are on your own.”  And honestly, that has served me well too.  All that to say, I love me some new car smell.  I do. It is intoxicating.  I am a new car kind of gal and I knowingly married a debt-free kind of guy.  And over the past eleven years, it has vexed me and blessed me all at the same time.

    So then, in 1995, the year before I met AD, I bought a brand new off the lot Jeep Cherokee.  I have not bought another new car since and probably never will again.  In 2003, five years into our marriage, the Jeep had seen better days and it was time to replace it.  AD found a super deal on the car I drive now. It was three years old at the time, had low mileage and was just like new, although a little short on new car smell.  I took it for a test drive and agreed that I could be happy with it.  We paid cash for it, drove it home and I have been driving it ever since.  My little old car is 10- years-old now, but it gets me around in a reasonable amount of style, if not conspicuous style.

    In the interest of honesty, because Antique Mommy is nothing if not honest, I will confess that sometimes I see my friends driving new cars and I feel an itsy bit sorry for myself because I want to drive a new car too.  But the thought of taking that kind of cash out of the bank, which is the only way AD would go along with buying a new car, makes my stomach turn.  And it makes my paid for car look pretty darn good.

    The real benefit of living debt-free these past eleven years has become most apparent in this past year when the economy seems to have gone to hell in a hand basket in a hurry. The unemployment rate is supposed to be something around 10% but it seems to me that 20% of the people we know have lost jobs, including us.  But because we have been savers and not spenders, we have insulated ourselves as best we can against the uncertain ebb and flow of the economy. We expect we can ride out this storm and the storms in the distance that we hear but do not yet see.

    My final point is this:  A lot of stress comes into our lives that we cannot control, but the stress that comes with debt is a very often a choice (obviously there are extraordinary and extenuating circumstances which I am not trying to address here).

    If your circumstances are not extraordinary or extenuating,  you have the choice to eliminate the stress of bill collectors, living paycheck to paycheck and worrying about making ends meet by taking baby steps towards systematically eliminating debt, living within your means and a instituting a methodical savings strategy. And you will get there. It won’t be easy, but you CAN make it happen. And that would be an awesome gift you give yourself and your family — much better than anything you drag home from the mall.

    If you are not there yet, or don’t know how to get there I encourage you to check out Dave Ramsey or Crown Financial Ministries. And then make an agreement with yourself and your family to work towards becoming debt free.

    Living the good life means living the debt-free life.

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    Learning To Work

    October 11, 2009

    Some random thoughts on the importance of learning to work.

    * * *

    Back in the olden days, many people bore children to help them work the farm. They needed people to work the land to survive, so they bred them.

    I recently read an interview with AD’s grandmother who was born in the 1890s.  She talked about how she walked behind a plow and picked cotton when she was seven.  It was harsh, but it had to be done.  She had to help, everyone did, that’s just the way it was.  Probably your grandparents or great grandparents did similar work to help the family keep body and soul together.

    Today, children are not expected to walk behind a plow or work in factories.  And that is a good thing. However, in my corner of the world, most children I know are not expected to work at all. They watch TV and play video games and go to lessons while their mothers wait on them hand and foot. And I think that is not so good.

    Early on I decided that Sean is not a prince and I would not be his valet.  I decided that he should learn to pick up after himself and to pitch in — to embrace the concept of work.  And I’ll be the first to admit that I’ve got a lot to learn as a parent, but one thing I have observed in my own child is that the first step in training is to establish the expectation.

    And so I set about establishing this expectation of work.

    When he was around three I showed him how to use the Swiffer mop and how to dust.  He still thinks this is tremendous fun.  I began to teach him how to cook.  When he was four I taught him to set and clear the table. When he was five I taught him how to fold dish towels.  Now that he is almost six, he can fold bath towels fairly well.  I sometimes pay him a penny a towel, sometimes not.

    When I tell him what a big help it is to me that he has folded a basket of towels, he beams.  It is a bigger reward than the two dimes I give him.  His new job is to take the trash and recycling out to the garage.  Next year, we’ll start working on laundry.  My dream is that at some point he will be a man who looks around, sees what needs to be done and does it.

    My point in saying all this is that sometimes we think that children are too small to help or too small to learn how to contribute, but I don’t think that is true.  It is true that most often it is easier to do something myself rather than to take the time to teach little hands. But oh the reward that comes later for both mother and child is a wonderful thing.

    As a not-prince, I have established the expectation that Sean will help me do what needs to be done to make living in this house a pleasant experience — which means if he wants to have a pleasant experience living in this house, he needs to help me do what needs to be done. Sometimes Sean thinks the work is fun and other times he grouses about it. Either way, he knows it is expected and he has to do it.

    Some families choose to do chores and I can see that there is value in that.  For me, because I am not great at keeping track of stuff I would just end up paying him for work he didn’t do and that would be bad because you seldom get paid for doing nothing in the real world.

    For me,  it works better to hire him for certain jobs, or, if he wants to earn some money, he’ll ask me if I have any work for him to do.  I think it’s good for kids to know they are expected to contribute to the keeping of the house but also to be rewarded for their work once in a while.  There are probably as many ways to balance that as there are families.

    If you were to look at the Biblical model, life is six parts work and one part rest. I hope to inspire Sean to strive towards that model.   Work provides purpose and structure and satisfaction.  These things are good.

    * * *

    He who works his land will have abundant food, but the one who chases fantasies lacks judgment.  ~Proverbs 12:11

    Let Goliath Fall

    March 21, 2009

    I was listening to a popular financial radio show the other day and a caller asked the question that people like me have been thinking:  Why do we “have” to bail out the automakers?  Why couldn’t we just let GM fail?  Two of the reasons the talk show host cited was because it would damage the US economy too much and because no parts could be made for existing cars.

    First of all. What?  The economy is already a gaping bleeding wound, so what’s the point of putting a zillion dollar band-aid on it only to rip it off two minutes later and apply another one.  Sometimes wounds heal up much better if you just leave them alone.

    The bailouts might alleviate some pain in the short term, but I don’t want to be the generation that goes down in the history books as having put a financial cement yoke around the necks of their great-grandchildren.  Instead of the Greatest Generation we will be known as the Stupidest Generation or the Greediest Generation. The sins of the father indeed.

    To his second point, I would bet my hat that if GM (or the automaker of your choice) closed its doors, that 100 companies would pop up overnight to make parts for existing cars and wouldn’t that be good for the economy?  My theory is that when big companies fail, opportunities are created for smaller, smarter, more agile companies.  That’s how supply and demand works.

    My third point is this:  I think economies that hinge on a handful of  bloated mega companies are dangerous.  They don’t allow Financial Darwinism to work because we can’t (or won’t) allow them to fail — and that is fertile ground for greed, corruption, mismanagement and criminally ridiculous executive compensation packages.  It is not an environment that brings out the best in people, but the worst.  It makes them untouchable as is evidenced by the “retention bonuses” given to the very people who couldn’t be trusted to manage the companies in the first place.

    I say let Goliath fall and let the sound of his corpse hitting the dirt be a warning to all.

    Antique Mommy’s Bail Out Plan – Step Three

    October 3, 2008

    Step 3 – This is where it gets complicated.

    We need to look long term for solutions to this crisis, beyond this current financial cycle, beyond the bears and bulls and far into the future.  This is a many-faceted problem.  One legislative act, one plan, one bail out is not a real solution.

    I think we all recognize that we are a nation of consumer gluttons. Our appetite for consumables is insatiable.  We gorge ourselves on product and purchase, always shopping and shopping, never satisfied, never really enjoying anything for very long. All we can think about is what are we going to buy next?  We gulp it down and look for the next thing to purchase. It is a joyless, empty cycle. And it is killing us.

    Add to that scenario that money is an emotionally ridden issue and that so many of us don’t understand beans about financial management and you’ve got a recipe for a very toxic stew.

    What Can Government Do?

    A few things come to mind, but I would love to add your ideas to the list.

    Heads must roll. Consequences must be paid by those who participated and profited in this financial train wreck. Heads must roll and psychologically, Americans needs to see heads roll.

    No pork please. The Bail Out Bill needs to be a single issue bill. Nothing unrelated to the bail out should be in this bill. No pork please.

    The deplorable practices of the credit cards companies need to be illegal. Every week I get blank checks from my credit card company.  I immediately feed them to my shredder.  I resent that I have to own a shredder. I do not like having to worry about what happens to my blank checks when the mailman has a bad day and puts them in the wrong mailbox.

    Yesterday I got an email from a reader saying that several times a week her three-year-old gets a credit card application.  Another reader said her son at college is beset with credit card applications.  Mailing out unsolicited credit card applications contributes to identity theft and other abuses of credit.   It’s reckless and it’s irresponsible and it needs to stop. In order to get a credit card, one should have to present oneself in person at the bank.  Period.  You can go here to alert your senator to this issue.

    Pro Bono. I think there is a segment of the population who needs a little help getting a mortgage. As doctors and lawyers and all professionals do, the mortgage industry needs to do a percentage of pro bono work in helping these people get suitable mortgages. If there had been no profit in providing people mortgages they couldn’t afford, we wouldn’t be in this mess.

    What Can You Do?

    Take personal responsibility.  Learn to manage your money and live within your income. My husband is amused that I of all people would be writing a post about finances.  The truth is I hate thinking about money, it bores me to tears, but it has to be done.  Antique Daddy does the bulk of our money management, but I keep up with it too because it is my obligation and responsibility as a partner in my marriage.  It is unwise for women to abdicate their financial responsibility to their husbands and it is wrong not to share in the burden. Women need to have a hand in and be aware of the family finances.

    Don’t revolve credit, never ever. Credit cards are a great financial tool if you pay them off in full at the end of every month. If you can’t do that, cut up your credit cards because you shouldn’t have them.

    Don’t buy a new car. This one kills me because Good Gravy! – I love me some new car smel!  It’s a concession I have made to my uber-financially responsible husband. I have not had a new car since the year before I met him. To be sure, I have a nice car and a car I love and a car that is paid for.  It’s just not new or anywhere near new, but it’s a small price to pay for the financial security that I enjoy.

    Work towards having a years worth of income in savings.  I’ve heard  some say 4-6 months is enough, but trust me, in this economic clime, a year is better.

    Save something for retirement every month. You cannot start too young.  Even if you are only 20-years-old you are not too young to start saving for retirement.

    Teach your children about money every day in some way. There are many many ways to do this.

    Several readers asked what I think about allowances.  Certainly allowances are one way to teach financial responsibility and a noble work ethic, but I don’t think it’s the only way.  I think each family needs to figure out what works for them.

    I prefer to “hire” Sean for certain jobs, which he can either accept or decline, which gives him a little power.  Or if he wants something in particular, he can ask me if I have any work he can do to earn whatever it is that he wants. That works better for us than an allowance at this point.

    If you are going to do an allowance, you have to be consistent and stay on top of it for it to be effective.  I don’t want to be a supervisor and have to keep up with what work has been done or not done because I would end up doling out money when no work was done and then it becomes an entitlement and that defeats the whole purpose of earning money.  If you like charts and you can stay on top of it, the allowance system is great.

    Be different!  Opt out of the culture of consumerism! Be the weirdo in the neighborhood who refuses to participate in the keeping up game. It’s fun!

    * * * * *

    Check out these sites written by people smarter than me about this kind of stuff:

    Dave Ramsey – His bail out plan is a little more detailed and thought through than mine.  Dave’s got no fancy financial secrets or investment methods, just good common sense – my kinda guy.

    I also like Suze Orman too because she’s plain spoken and direct and passionate about money management!

    Several readers said ING Direct was a great site for helping kids learn about finances.

    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.

    Antique Mommy’s Bail Out Plan

    October 1, 2008

    Step One: Seize all the assets of the CEO’s, CFO’s and anyone else involved in the failed institutions with a $15 million golden parachute (or any parachute with the word million), including homes, foreign assets, art, cars, furniture and clothes that are not from Target or Wal-Mart — including the college fund for their kids. Sorry – the whole sins of the father thing. And also because thanks to their irresponsible and unethical actions, a lot of middle class kid’s college funds are gone, so it seems fair to me. Finally, they should be banned from working in the financial industry for all eternity.

    In exchange for jail time, they should be given a minimum wage job so that they too could have the joy of earning a living and not be a further drain on American resouces.

    That’s it. The rest of my plan needs work.

    Edited to add: I just thought of step two. I’ll post it tomorrow.