Sunday, December 17, 2006

Pig Money

By Lisa Curry

I come from a family of hardworking, thrifty people.

As I write that, I hear my sister in the back of my mind shouting, “Tell it like it is – our dad’s the cheapest man on Earth!”

In his defense, there must be a cheaper man somewhere on the planet. I just don’t know who or where.

My father, retired steelworker and farmer, probably has a credit score of 2. Not because he has bad credit, but because he has none. He’s never had a mortgage, car payment or credit card. He’s a pay-as-you-go kind of guy whose philosophy is, “If you don’t have the money for it, you don’t need it.”

As a teen, I didn’t appreciate his frugality. Particularly when I was in the bathroom getting ready for a date and he pounded on the door, yelling, “You should see the electric meter spin when you run that hair dryer!”

Better I should go out in 10-degree weather with wet hair. If I caught pneumonia, he had insurance to cover the medical and funeral expenses.

Now that I’m 43, though, I value his influence. I do have a mortgage, car payment and credit cards, and I don’t habitually monitor the rpm’s of my electric meter. But I’m enough my father’s daughter that I live within my means and save. According to our financial advisor, my husband and I are on track to pay off the mortgage, fund our children’s education and retire when I’m 58.

In turn, I try to teach financial responsibility to my sons, ages 7 and 9. They each get $5 weekly allowance, and every month, they have to deposit $10 in their savings accounts. I could withhold $10, but I want them to develop the self-restraint to save it. The consequence of failure is no allowance next month – it all goes directly into the bank. Thus far, I’m pleased to say, neither has failed.

Still, I worry about their spending habits. My younger son, Sean, squanders his allowance and complains when he can’t afford anything over $5. He never manages to save for that $20 Gameboy game. The older one, Griffin, usually does better, but lately, to my alarm, he’s asked to withdraw money from savings for an XBox 360.

On a recent visit to the bank, Griffin asked loudly, “Why doesn’t the bank let kids take money out of their accounts?” – as if a teller might respond, “Why, you poor little thing, would you like that in twenties?”

“The bank doesn’t care,” I said. “But you’re a minor, I’m your account’s custodian, and I say you can’t.”

The purpose of this trip was to cash a matured savings bond. My late grandparents – parents of Mr. Thrifty – gave me a bond every October for my birthday. I held a spreadsheet that listed all my bonds, their cost, face and current value. My financial advisor told me to cash them all, but they have sentimental value. Instead, I cash them when they stop earning interest and deposit the proceeds in my children’s college fund.

On the spreadsheet, an anomaly among the $25 and $50 bonds issued in October caught my eye. “See this $100 bond from May 1979?” I said. “I bought it. Want to know how?”

The boys nodded.

“Your grandpa said he’d front the cash to buy baby pigs, and if I took care of them until they were big enough to sell, I could have the profit from one. I made $150. He made me use $75 to buy a $100 bond and let me spend the rest,” I said. “Today that bond is worth $396. What’s the lesson?”

“Buy baby pigs?” Sean said.

“Uh, no.” I sighed. “Okay, if I had spent all my pig money, how much would I have today?”

“Nothing,” my little geniuses replied.

I beamed. “Exactly. So what’s the lesson?”

“Buy savings bonds,” Griffin said.

My financial advisor would cringe. “There are better investments, but yes, the point is to save money.”

“I still don’t see why I can’t buy an XBox,” Griffin said.

I gave up for the day. Clearly, my work isn’t done, but I have years left to curb their profligate ways and mold them into grandsons worthy of the old cheapskate himself.

So I’ve been thinking. We own two acres here in the ’burbs. My husband’s handy. He could build a pigpen…


Tory said...

I was just thinking, Lisa, how it took till I was in my 40s to appreciate the money help I did and didn't get from my parents.

The lesson? Patience is a virtue, particularly when raising kids.

Gina said...

Lisa, since you don't live on a farm, wouldn't it be more practical to make them earn their money raising weiner dogs?

Joyce said...

Lisa, you are a great mom!

Take it from me, the lessons will sink in. Josh used to spend his entire allowance on Lego sets. We had to head to the toy store as soon as he got paid. Now that he's in college, he doesn't spend a dime unless he has to. He still has all his graduation money in the bank!