Monday, September 29, 2008

Allowances & credit cards

Mondays mornings are the toughtest - particularly after a weekend alone with the kids. So I was hoping for a "light" topic today. But I had no such luck... P asked for his allowance. I handed him my wallet and asked him to take his 8 dollars (and his brothers' money). Unfortunately, I only had $4 in my wallet. A said he would just take my credit card and we got talking about credit cards and debit cards.

I kept it simple: pay your balance right away to avoide getting into debt and paying interests. They wanted to know why some people didn't do that. I explained some people needed extra money one month (credit) for a special ocasion or need, and would pay it in the future. Of course, others simply got into the bad habit of living beyond their means.

They wanted to know what happened if one couldn't pay one's credit cards. I explained that the 1st thing was that the cards were taken away and one had to figure out how to live without them. Then, you might need to sell your car or house to pay them, and, worst case, those things might even be take away from you. P joked about evil parents selling their kids (I hope that has nothing to do with C & I!).

A wanted to know why P & N get more allowance money now than he when he was their age. I honestly don't remember how much we gave A at this age, but I needed a quick answer because we were arriving at school so I said it was because of inflation. The real reason, of course, is that 1st borns are guinea pigs... We probably had no clue of how much to give him as an allowance. Our current rule: $1 per year of age.

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