The kid needed a new pair of shoes.
To go shoe shopping, I asked him get the cash from his dad.
“How much ?” my husband asked. The kid didn’t know how much to ask for because he knew the kind of shoes he wanted, but he didn’t check their price range. He knew the price range he was permitted for shoes and that he will have to limit his purchase to the amount of money he got.
So he goes online to find the price of the kind of shoes he was looking for and asked his father for Rs. 3000/-.
“Why can’t we buy online ?” the kid asked.
“We have the time. It will be fun to go to the mall, try shoes and buy. And you are going to pay in cash, so no online purchase for now.” I replied, looking forward to the shopping expedition.
We try various brands; end-of-season sale is in progress and there are discounts on offer. Finally we reach the Converse store. There were two shoes he liked, one priced Rs 2500/- and the other Rs. 3000/- after discount.
” Which one are you going to take ?” I ask
” The Rs. 3000/- one, it has better ankle support.” the kid replies. He takes the cash from his wallet, pays for the shoes and collects the packet. He is happy.
“Can I have a Frappuccino from Starbucks ?” the kid asks.
” You have cash ?” I ask. No the kid says.
“If you had bought the Rs 2500/- shoes, you would have some money left-over for the Frappuccino.” says me
“Dad gave Rs. 3000/- for the shoes and he will ask me for the bill and the left-over cash back. I am supposed to spend cash only on what I had listed out to buy and hence I spent it all on the best shoes I could get in the budget; any money remaining would have to be returned. Frappuccino can be your treat. ” kid said.
And I treat him to a Frappuccino from Starbucks.
What do you think, he should have spent under his budget and saved some cash for a treat or utilised the full amount for the purchase ? The option one is tempting if you don’t have to produce any proof of your purchase and are not accountable on how you spent the money. But if you have to show the bill and return any un-utilized money i.e if you are accountable to how you spent the cash, then option two is preferred.
We ask the kid the bill and the left-over cash, only to validate that he has collected the balance amount correctly, esp when he goes out with his friends.
We teach our kids many life skills and how to manage finances is one life-skill that is often ignored, hoping the kids will learn by themselves in due course. But even if we ignore to teach, they pick up the basics watching us; seeing how we earn, spend and save. They will either make the same mistakes we did or may learn from our mistakes. Teaching them the good basics at home will go a long way in sowing seeds of some good financial habits, the rewards they can reap later.
Till next post, take care.