Tuesday, April 14, 2009

Why Money Goes to Money: A Child's Explanation

Why does money often attract more money? My 11-year-old daughter -- an old soul -- offered some insightful comments about money and saving.

Here's the scenario: From allowances and odd chores, my daughter saved about $100 in pocket money. She's saving to buy her own laptop. But as her stash has grown, she has become increasingly reluctant to part with her money. She now likes the idea of sharing my laptop or the family PC.

"You work so hard to get the money and once you have the money, it's hard to let it go," my daughter told me about a few weeks ago.

For awhile, she continued to save and hold onto her funds. Basically, my daughter learned the power of momentum. Once saving becomes a habit, she has learned, momentum provides financial assistance.

Unfortunately, a recent trip to a local mall taught my daughter another lesson about money and spending.

"Once you buy one thing, it's hard to stop. That's what I found," my daughter said. "When I bought one key chain, I ended the day with $30 less."

The lesson: Shopping can become an addicitve behavior that can drain your savings account. My daughter is still trying to figure out how she spent 30 percent of her money in one afternoon.

Her final word: "Don't bring all of your money shopping."


T'Pol said...

That's one smart very young lady! I am sure she will be a very responsible adult. Congrats to both of you!

kate said...

Great post and so true. Shopping can become an addiction.

when I was younger and had little cares in the world I would buy things just because I was at the shops. the amount of cosmetics I ended up throwing away from disuse or just the fact that I didn't really like them after all. I wish I could have all that money back again.

Anonymous said...

Aww bless her.
There are adults who still don't understand that!

Sounds like she's got a good headstart.