The Scenario: The wake-up call rang when the 9-year-old proudly announced that he wasn't going to work for a living.
Father: Why not?
Son: I'm going to get one of those plastic cards that you have. When I need something, I'm just going to use the plastic card and sign my name.
The Aftermath: The father, who works in the finance industry, reviewed his shopping and spending transactions. He realized that his son -- an elementary school student -- had closely watched his parents make purchases at restaurants, stores and other locations. From a child's view, the transactions seemed simple: Show the plastic card and receive stuff for free. Why work for money when you have a plastic card?
The Solution: When the next credit-card bill arrived, the father opened the bill with his nine-year-old. Here's their step-by-step financial lesson:
- The Account Numbers: The father pulled out the family credit card and asked his son to find the numbers on the plastic card. To make the connection between the credit-card statement and the plastic card, he asked the child to match the numbers on the plastic bill with the account numbers on the bill.
- The Balance Check: The father showed the 9-year-old the monthly credit-card balance. Well-schooled in math, the child was shocked by the large dollar figure. To drive the point home, the father explained that all of the things that had been purchased with the plastic card had to be paid for each month with real money from the family's bank account.
- The Bank Lesson: The father explained he wrote checks to pay monthly bills, including the plastic bill. That lesson took a while because the son argued that checks were just paper and he could just sign his own papers to pay for the plastic. Next: The dad tried to explain how the banking system worked.
"I'll get another plastic card," he told his father: "I'll get the plastic card that makes money come out of a wall."
I'm sure that the father offered a very thoughtful and detailed explanation about automated teller machines, but our car ride ended before he finished telling the story. Meanwhile, I had a lot to think about anyway. I wondered what kind of unspoken messages about money, spending and family finance that I have delivered to my children.