Westport News: A Lesson on Budgeting

Yes! I finally broke the writer's block.

One of the constructive criticisms I've gotten about this article is not spreading out the knowledge-wealth across more age groups. Specifically, a few of you have commented on my lack of financial literacy ideas for pre-school children. It has been pointed out that I do a good job talking about strategies for elementary school kids (probably because my son is in second grade) and also for the high school kids (probably because I coach soccer for high school kids). Go figure, my daughter Samantha is 4 and it seems you feel I've been neglecting this age group.

I finally had a situation come up that unleashed my writer's block for the pre-school kids.

We have two cars in our household. Stacey uses a SUV to tote the kids all over God's creation from school to practices to play dates which is better suited for running around town with all the kids. Our other car, which is smaller (and less expensive), I tend to use as my revolves around round trips to the train station every day.

Last weekend Samantha and I got into "my car," and here's the dialogue that ensued:

"Daddy, why does mommy have a big car and you have a little car?" Bingo -- here we go with a good chance to add a little financial literacy into the conversation.

"Sammi, the reason we have different cars is that we decided to budget. Do you know what that means?"

"No, what does that mean?" she said.

"Let me give you an example. Imagine you are at school and you have four apples. What would happen if you were at school sitting with Emma and Hannah and you gave them each two apples? How many would be left for you to eat?"

Now, truth be told, I had to walk her through the math, but she finally put two and two together (no pun intended) and realized that by giving her friends two apples each she wouldn't have any left for herself. I followed up by inquiring how she could share the apples and still have one herself? She concluded:

"I could give one to Hannah, one to Emma, and one for me." She understood that she had to ration out (budget) the apples if she was to have one. You'll notice she conveniently ignored the fourth apple. Obviously, she's either waiting for a fourth friend to join them or she'll hog that last one for herself.

Then I tied it back to her original question about our cars.

"Sammi, if we spent more money so that we could have two "big" cars (instead of just one), then we wouldn't have that money for other things that we might want to use it for that are more important than we think the car is. It's like you only had so many apples to share in our example. This is budgeting. Do you have any suggestions of what else we could use that money for instead of a bigger car?"

"Sure Daddy -- a toy for me."

Ugh....I still have a lot of parenting ahead of me!