Dub Family Saving

Last night, we decided to go ahead and add our daughter onto the Acorns Early app as well. Being the younger of the two, and understanding her current relationship with money, I wasn’t expecting to have much success in her willingness or excitement when it came to learning about saving. Not much to my surprise, the excitement quickly turned into boredom. Being eight years old and having to learn about saving money must seem like a daunting and ridiculous task. She went ahead and did three of the learning missions before stopping entirely. To her credit, and to be fair, the app wasn’t working properly and even this morning it shows on her account that the funds for completing the lessons are still pending. Possibly seeing that in her account might keep that fire burning?

If nothing else, having a place where she can conveniently keep her cash (the reason all of this started in the first place was because of her leaving some cash laying around), then I would say the app is a success. I believe that even if the most bare-boned basics is all she retains at her age, then she would be better off than myself at that age. I do find interesting that the first few lessons they learn on the app are related to how people used to exchange goods, why the invention of money, and how we earn money in general. It is fascinating that the bartering of goods was the beginning in which it was realized that the trade of goods such as food were the reason money was brought into the equation.

With our son, his approach was obviously much different. The excitement of doing something relatively simple and earning money from it, is what keeps him going. Although, we can see as his little pot of gold starts to fill up, old habits begin to surface. They have always gotten what they wanted or needed, for the most part. Albeit, admittedly, that was probably not the best approach as parents. We should have created a healthier relationship with money, taught them the significance of saving money. But as children are, they are observant, they can see our own faults when it comes to our own relationship with money and lack thereof when it comes to being responsible about saving. Our son completed one of the lessons yesterday afternoon, which covered the basics of loaning money. It was then he quickly came up with an idea of a new “lesson.” He asked if he could borrow some money in order to purchase a new video game, of course, so he can understand the concept of having a loan.

I kept the premise simple for him. At first, asking him how much he was wanting to borrow and what he wanted the money for to begin with. He said he needed all of fifty dollars in order to buy a couple of games that are on sale right now (bargain shopper or con artist). I asked him if he had any idea of what the average interest rate of a credit card would be. After looking this up, he came back and let me know it was around twenty percent. I let him know, as a first time borrower with little credit history, he should expect the interest rate to be on the high side. I let him know, if he wanted to borrow fifty dollars, it would have an interest rate of twenty-four percent, that his minimum payment would be fifteen dollars a month and that he would pay his loan off in approximately four months. This seemed simple enough for him, and at that point was still very much interested. Then I went ahead and hit him with that as the lender, I was going to need to see proof of income. As he mulled the idea of how he would show proof of income, I believe the nail in the coffin for him was that if a payment wasn’t paid on time, he would be hit with a late charge.

As I reflect on this exchange with him about loans, I realize he is no different than many adults who have little financial education and go through very similar exchanges. Of course, as adults, we have the ability to look past all of this information that sounds utterly ridiculous, and sign our name to get the line of credit anyway. Now I don’ believe credit cards in general are inherently bad. With the main focus of improving your credit history, showing that you can be reliable to borrow someone else’s money and pay it back per the terms of the agreement. What I do believe to be the problem with the credit card industry as a whole, is that the main population of individuals that use them are not well versed in the “lingo” that is the agreement. To me, its a supply and demand type of equation; if more individuals stopped accepting bad or not in favor terms in lieu of more reasonable ones, then the credit card companies would have no option but to reduce their profit margins and give terms that are better for the consumer. As with many things though, this education, this mindset, has to be taught at an earlier age.

All in all, we do want to continue using the Acorns Early app. To see where it takes their relationship with money and saving. To see how their mindset might change as their relationship with money changes. As with a lot of people, we all get lost in the idea of finding that one thing, that will make us financially stable overnight. The premise of saving and investing seem so dull compared to the overnight success story. Of course with the internet nowadays, you don’t often see the success story of someone who has been saving and investing since they were twelve years old and how well that worked out for them. Sure, there are a few stories out there, but typically you see the, “buy this course, you will learn in minutes how to become a millionaire with this one simple trick!” Maybe if the message was simpler, to achieve financial freedom, one must save, invest, stay away from bad credit, and find more frugal options to introduce into their life?