Advanced Personal Finance

As the father of a beautiful and funny (she gets it from her mother) three year old girl, I’m continually learning new things. Sometimes it’s a new way to look at something; sometimes it’s something practical like the right way to cut a pancake; sometimes it’s something I thought I knew about. Here is an incomplete list of things my toddler has taught me about money.

• Money is worthless without time. I hire someone to maintain our lawn. It’s a small thing we decided to do at the beginning of the summer and it’s worked out great. I use that hour to play with my family instead of push a lawn mower around. Because I hire someone to spend that time, I’m $30 poorer each week. And happy about it.

• Pay for experiences, not stuff. My little girl mentions our last trip to Disney World at least once a day. And we went six months ago. She also talks about our trip to this attraction or that park repeatedly. Does she talk about any certain toy or article of clothing like that? Hell no. I’ve learned the biggest bang for our buck is spent on experiences - going places and doing things - rather than possessions.

• There’s always something else after that thing you want. When we travel through the aisles of a store - be it Target or the grocery store or whatever - my daughter will often find something that catches her eye. She wants it. Then we round the aisle and head into another one. There she finds something else she wants. The first thing is forgotten. She’s on to something different. So it is with all of us. The new sweater you loved so much last month is now old. It’s been succeeded by the new shirt you bought. Understanding that your feelings for a possession will be fleeting is good for your wallet.

• Wait long enough and you’ll probably forget about it. In the same vein as the last lesson, I’ve found if you give my daughter enough time, she’ll forget about whatever it was that she wanted. There’s too much to see and do in the world.

• Something old pulled out of storage is new again. I’m sure every parent has had this experience. You go into the closet/toy box/basement to clear out old stuff to give away. But the moment you pull out those old toys from six months ago, it’s as if they’re brand new. My little girl rediscovered all her old baby toys when we pulled them out for #2. It was like we’d just gone to the store and bought all new stuff. This principle works for adults, too, so dig out that old Sega Genesis.

• Kids don’t care what your net worth is - even if you do. A kid doesn’t care if you’re a millionaire or drowning in debt. For my three year old, it’s all about one thing - “Can we go to the park now?” She doesn’t care if the checkbook is balanced or what her 529 balance is. She just wants to play with me.

• Cheap is often better than expensive. The $50 Leap Frog electronic toy she got when she was one is gathering dust somewhere in the house. It was a complete bust. She never touched it for more than a minute at a time. On the other hand, we’ve played “Pretty Pretty Princess,” a $10 game, for hours since she got it.

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This entry was posted on Thursday, September 20th, 2007 at 8:14 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.