Tuesday, December 10, 2013

Teaching finances to a HFA

Trying to teach Joe finances continues to be a challenge. Since he drives (and therefore has to put gas in his car) we set him up to have a debit card. I was NOT going to let any child loose with my credit card!

To give credit where it is due, Joe is fantastic about balancing his checkbook. He always records his gas purchases or bank withdrawals perfectly and the only time his checkbook didn't balance it was because he typed the numbers in the calculator wrong.

For car repairs, we usually split the cost. He does work a weekend or two a month and has some income so I don't think having him pay for oil changes or half the price of a new battery is outrageous for the free use of a car!

However, in a continuing effort to help him understand cash flow (as well as financial transactions) I frequently send him out to the store for little things.

We are getting low on Alan's lactose-free milk.
Mom: "Joe, can you run up to the grocery store and pick up some of Alan's milk?"
Joe: "Sure. That is what I'm here for." (I kid you not, that is what he says!)

Joe forgets to tell me we ran out of his favorite mouthwash.
Mom: "You can stop and pick up a few bottles after work tomorrow." (Work = his volunteer positions)
And it is done.

He is remarkably helpful that way.  Most of the time he pays in cash and I reimburse him. Sometimes this means I have to make a special trip to the bank to make sure I have enough cash on hand but DH and I figure that as more money travels through Joe's hands he will get a better understanding of how finances work.

This isn't always the most frugal option for us however. One time he bought a name brand where I would buy the generic and his answer was "but I could afford it!" Sigh. He didn't understand that even though he was giving the cashier money, ultimately we were paying for it.

Sometimes it is a pricier errand and he puts it on his debit card. He gives me the receipt and I transfer the money from our account to his. He really doesn't understand how or why this works but I feel better because I don't feel like I am trying to cheat him out of the money he has earned or been given.

Yesterday he went out to pick up a few things and the total came to about $25 so he decided to use his debit card. Fine. Then he figured that since he was low on money, he would get $40 cash back. I was trying to make him understand that either he needed to subtract $40 from his account and I would transfer $25 or he could subtract $65 and I would give him $25 in cash. Yikes. That got confusing even to me!

Then I had what I thought was a brilliant idea. I would explain fiances to him in terms of colored Legos. I told him my account was the red Legos and his was the blue. He gave 5 blue Legos to the store and I gave him 5 red Legos to pay him back and he was still even because the color of the money (Legos) didn't matter.

That actually seemed to make sense to him. But I couldn't figure out how to explain the $40 cash back. Sigh. Really it was easier teaching him the rules of the road for driving using Matchbox cars.

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