Sunday, September 14, 2008

Learning the value of a dollar

Josh and I are fairly frugal people. Scratch that. Compared to our grandparents (and to a lesser extent our parents), we spend money like it's going out of style. But compared to the rest of our generation, we're pretty damn thrifty.

Aside from the 30-year mortgage on our house, we live debt free. I put 15% of my pretax salary in a 401K and Josh funds a retirement account for the self-employed. We shop sales, clip coupons and stock up on kids' clothes and toys at rummage and consignment sales.

But have I instilled any money sense into my preschooler? Z's almost four, and while she can count and do basic addition, she has very little grasp of the value of a dollar. She doesn't know if a candy bar costs more than a dress, but she's pretty sure cars, bikes and houses cost "a lot of dollars."

Z's also learned that unless it's "on sale," it isn't definitely isn't going into our cart. And since she's not reading, it's up to me to determine what's on sale!

And while I'm not technically telling her the truth every time I say "Mommy doesn't have enought money to buy ______," it would certainly be true soon enough if I caved to every demand.

As she gets older, I plan to introduce an allowance and encourage Z to save. I'd like her to experience the satisfaction of saving up her allowance to purchase something she wants "with her own money," and I also hope to encourage long-term saving by matching any funds she puts in the bank.

Even though I want one more than words, I'm too cheap to buy an iPhone. But I want to win one, which is why I participated in this Money Doesn't Grow on Trees blog blast, sponsored by Capital One.