Teaching kids (or even adults) about money and budgeting isn’t always easy. Each person comes into the discussion with preconceived notions about how best to spend (and save), as the case may be.
One thing that has become abundantly clear over the past 15 years of operating this site, providing thousands of articles and recipes is that people often forget one simple fact, We don’t buy things with money . . we buy them with precious time from our lives.
Yes, it can be argued that the actual purchase is made with cash (or a credit card), but in order to get that cash or pay that credit card, we must work. Each and every hour spent working to earn money to buy things is time that we are away from our families, our friends, our gardens, our homes, our very short lives.
Clearly we must work to earn a living and pay the bills, but here’s how I taught my children to view their money . . .
First, take into account how much money you make an hour. For example, our eighteen year old son works in a fast food joint while he is attending college making a whopping (*sarcasm*) $8 an hour.
Next, take into consideration how much the item you wish to purchase costs; Perhaps it’s the new latest greatest iPhone for $200.
Figure the REAL Cost
How much of your lifetime are you giving up to purchase that item?
$200 (+ sales tax) divided by $8 an hour, less taxes that they take directly out of your check for ol’ Uncle Sam, so roughly $7 an hour after taxes = at least 28 hours of your life.
Let’s put that into perspective for a moment, that’s 3 1/2 days working full time, or about a week of part time work (for the college student only able to get 4-5 hours at a time) or 1,714 minutes (at least) that you can never get back, not to mention the time spent researching the item to find the best price, the time spent traveling to the store to buy it, the time spent in line waiting to pay for it. These seemingly brief minutes add up rather quickly.
Now, ask yourself, is it worth it to you? Is it somehow going to save you time and money down the road? Is it going to MAKE you money? Is it worth the effort, the time lost that you could be doing other things, the time spent at work with people you may or may not like working with, Is it worth the time away from your family (your kids?) it is worth all of that?
If it is, by all means, buy it.
This is how I have taught my kids to view their money, as well as how I view MINE.
How do you view your potential purchases and money?