Should Children be Paid to Excel in School?

As you know I have two children a daughter who just turned 22 and a son who is 16. I call them C1 and C2 for Child #1 and Child #2. When most people have two children, you can see differences in their personalities and their approach to things like school. But I was blessed with two children exactly the same.

C1 and C2 are very, very smart. They test well. They have a lot of natural talent and ability. Consequently, they have never learned how to work hard or put forth one iota of effort. Just to give you an example, C2 doesn't like to take honors classes in school because he'd have to open a book and read a little. I mean, I'm in awe of their natural ability. I think they got it from their dad.

Anyway, when they were in elementary school, my husband would pay them for making A's and B's on their report cards. An "A" yielded more money than a "B". I can't remember exactly how much each was worth, but they got paid. As they got to middle school and high school, it seems that they didn't need the money because they would do just enough school work to get a passing grade.

So that brings me to my question: Should children be paid for grades?

Reasons to pay.

1. When you go to work you get paid. School is a job for kids, so why not pay them?
2. Payment is an incentive. If they know they're going to get paid, that may encourage them to excel, but not my kids.
3. Life is expensive. Children have many wants. Earning money for performance in school is an opportunity for parents to teach children the money mantras: earn, save, invest and give to charity.
4. If there is some toy or gadget that a child really wants, this is an opportunity for them to learn delayed gratification.

Reasons not to pay.

1. School and school work is what you do as a child. A pat on the back should be sufficient. There should be no expectation of a monetary reward.
2. If children are paid to make good grades, they won't learn to appreciate education. They will only work for the grade to get the money.
3. There are other ways for children to earn money. For example, chores.
4. Rather than paying children for grades, children should be given an allowance. Parents can still teach the money mantras with the allowance money.

Obviously, for me hind sight is 20-20. But what do you think? Should we pay children for good grades? Should we pay them when they score a touchdown, make a field goal, or hit a home run? How do you weigh in on this subject?

Wealthy_1's Financial Epiphany

Gather Little By Little has invited bloggers to share their financial epiphany. So I'm going to share mine.

My financial epiphany first came in September of 2006. Earlier that year I had applied for and received an additional credit card with $11,500 credit limit and supposedly a 2.9% interest rate for 12 months. As with all credit card offers I had received, I rationalized that I would use this card to pay down higher interest rate cards and pay it off in a year. (I know now that one of my problems was that I never had a plan in writing.) I used this special offer card to transfer balances from my already up to the limit credit card, to pay off my retail cards, and to support my very expensive bodybuilding competition endeavor.

When all was said and done, I had reduced the up to the limit card from $12,300 to $9,100. The interest rate on that card was 11%. Because I was clueless, I decided to pay $100 per month on the $9,100 balance. I did this from June to September. Each time I'd make a payment, I would check the balance on line. It wasn't moving. In addition, I put myself further in debt because I just ran that special offer card up to the limit.

Here comes my "ah-ha". The $100 per month I was paying only covered the interest. It wasn't making a dent in principal! At the rate I was going, I was never going to pay that credit card to zero. And now I had two credit cards each with a big balance!

That was my first wake-up call. I've had several smaller wake-up calls since then. Of course, reading Dave Ramsey's book this past year really helped my to create a concrete plan and has given me the courage and confidence to work my plan.

Now, what about you? When did it hit you that change was in order? What's your financial epiphany?

Carnival of Money Stories # 48 -- Leap Year Edition

Welcome to the Carnival of Money Stories! I've dubbed this 48th Carnival the Leap Year Edition because it's a Leap Year! If you're actual birthday is Friday, February 29, Happy Actual Birthday. Enough rambling...now on with the Carnival. Enjoy!

What Does a Millionaire Sound Like? That's a good question. You'll find the answer at The Butler Project.

Christine is An American Single Mom Living in France. Recently she visited Berlin. Judging by her post The European Exchange Rate and travel in Berlin, Germany she enjoyed a budget friendly vacation.

Detail People and Bottom Line People: Differing Approaches to Carbon Footprint Dieting. Which group are you in? It doesn't matter. Money Changes Things has an electrician who appeals to both.

You Can’t Quit Poverty… but according to Iowahippiechick Dawn, you can break free.

Becky at Family and Finances and her husband are proving to be financially savvy newlyweds by checking their credit. Smart move! Ah, I love wedded bliss and togetherness. See what they discovered when you read Getting Our Free Credit Report.

Why I Started Lending Money With Prosper And Lending Club. My Two Dollars, please, tell us more!

Judging from this post Life in the Punch-a-Button Lane, vh at Funny about Money is having a less than positive customer service experience. Whatever happen to a pleasant voice on the other end of the phone?

paidtwice at I've Paid For This Twice Already... explains why It’s Good To Be Broke Sometimes.

Stephanie at Stop the Ride! made enough money online to get a 1099. (I'm a poet and I know it!) Check it out: Earning 1099's Online.

Speaking of poetry, Madeleine is Banking On Money. Her rhymes are really quite funny. At Mad Kane's Humor Blog you will laugh like frog, and I hope your day is bright and sunny!

FFB is doing a little financial reflecting... If I Could Turn Back Time - Money Mistakes I've Made. I've been doing a lot of reflecting lately. Free From Broke I say look how far you've come!

Small Cents over at Small Cents says The Grass Is Browner On The Other Side Of The Fence. In otherwords, you can lead a horse to water, but you can't make it drink.

The Financial Blogger asks How Much Would Pay For A Visit At The Clinic? A sneak peak into public health care.

Over at My Dollar Plan Madison is Leaving Money on the Table…. On Purpose! No worries though, it sounds like she's prioritizing.

Cash Money Life reminds us that honesty is the best policy when he tells this story: The Choice of What is Right, and What is Easy.

Pay down the mortgage or pay down consumer debt and student loans? Read what S.B. at Be Thrifty Like Us was doing. Our Experience: Pay Off The Mortgage or Not?.

Here's an interesting question? Prime Time Money asks Do You Tell Your Parents the Details of Your Finances?.

BeThisWay at Are You Going To Be This Way The Rest of The Time I Know You? explains how to create a win-win situation in her article Saving and Spending and Everyone Wins. Oh, how I wish it could always be this way.

Exercising patience will save you money. Stephanie at Unclaimed Money explains how in her post Patience is a Frugal Virtue.

King of Debt at We're In Debt reminds us of the money mantras in this post Day 655: Applying Best Practices to Your Life.

Tyler at Dividend Money must be living the money mantras. You'll see what I mean when you read his post How To Manage Debt And Build Wealth.

To settle or not to settle? Shaheen Lakhan at GNIF Brain Blogger explains why Usually It's Cheaper to Pay Than to Go To Court.

Thanks for visiting this week's Carnival of Money Stories #48. Be sure to visit next week's Carnival. It will be hosted by Piggy Bank Blues.

Deeper in Debt

Well, I did it. Last Saturday I purchased a car. It's an 8-year-old luxury car. There was only one previous owner, and it only had 40,000 miles on it. I paid $10,000 for it: $6,000 cash and $4,000 loan. I didn't want to incur any more debt. As you know, I have more than enough. But it is what it is. The deed is done. The old wealthy_1 would have thought nothing of taking out a huge loan for a brand new car. That's what I did five years ago. My car payments and insurance were $400 per month!

I was saving $300 every month in my car savings fund. When I thought about getting a loan, I decided that I could pay $100 towards a car payment. As usual I forgot about the insurance, but the cost for me for this car is $60 per month. That's an added expense of $160, leaving me with $140. I have a four-year repayment plan on the loan, but I can pay extra on it, and I can pay it off early.

Now the question is: What should I do with that $140. Of course, the first thing that comes to mind is pay more on the credit card debt. That's a good plan, but for the first time in my entire life I asked myself, "How will I pay for routine car maintenance?" So, I've decided to continue the car fund at ING and put $100 every month into it for car maintenance.

That leaves me with $40. Once again credit card debt reduction comes to mind. Then I thought about the vacation we are planning this summer. Right now I allocate $100 per month towards vacation. Perhaps it would be a good idea to increase it to $140. Especially since once we're on vacation, money has a way of slipping through our fingers.

Natural Consequences

I received many comments on my post about C2's car accident. Several readers asked what consequences or discipline did we impose on him. Before I discuss that, I'd like to talk about the natural consequences that he has endured as a result of this incident.

First, when his dad and I got home from work that evening and asked how he was doing, he broke down and cried. He was very much aware of how lucky he and his friend were. He was upset with himself for putting the two of them (especially his friend) in an unsafe situation.

Second, he had to depend on his sister to take him to school because he didn't want to take the bus in the mornings.

Third, he had to take the late bus home from school after weight room in the afternoon when he didn't have to work. We live about 15 to 20 minutes from the school. It takes at least an hour to get to our street when he takes the late bus.

Fourth, he had to find a ride to work after school.

For his parental consequences, his dad and I found a young driver contract on line. We made it our own, the three of us discussed it and signed it. If any of you are interested, you can e-mail me and I'll send you a copy of the one we used or you can google young driver contract. I couldn't believe how many of them there are on the web. Next, his driving privileges consist of going to work and home and going to school and home. There is no social driving for now. In addition, he must call one of us when he arrives at work or school and he must call when he leaves. Finally, we've told him that he has to pay the $1,000 deductible. I'm in the process of working out the details based on his pay and the number of hours he works.

I sit next to a young mom at work who has two toddler girls. Every morning she comes to work complaining of how difficult it is to be a working mom of toddlers. The other day I said to her, "Just wait. Little kids, little issues. Big kids, big issues.

A Trip to the Carnival of Money Stories # 47

If you found your way here from the Carnival of Money stories...Welcome to collectingmycash! I'm wealthy_1. As you know, collegeofcash was this week's Carnival host. She did a wonderful job. I'm grateful to her for hosting and including my post. There will be more car stories on my blog over the next few posts. It seems like a never ending saga.

I always find all the Carnival posts very interersting, but this week these really caught my eye.

Becky at Family and Finances got a $250 credit! I love hearing when others get money back. Check out her story. On a sad note, she didn't get a pedicure.

If I were debt free sent his credit card company a Valentine's gift. What a clever idea! I wish I had thought of it.

Small Cents reminds us to focus on the baby steps and to celebrate our accomplishments no matter how small.

Finally, if you want to read about someone who has a handle on her money, check out my blog friend Dawn at iowahippiechick.

Once again, thanks for visiting collectingmycash. Feel free to peruse other posts I've written. Remember if you like what you've read here or at the Carnival, consider subscribing to the blog in a reader or by e-mail.

Next week the Carnival of Money Stories will be right here at collectingmycash. I'm sure there will be many great posts!

Two Weeks and a Day

That's how long C2 had his driver's license before he was involved in an auto accident. No one was hurt and no other cars were involved. He was driving too fast, lost control of the car and ended up on the other side of the road in a ditch. His best friend was in the car with him. That's against the law in our state. His fine was $103. He anted up.

The car was towed to a local garage. The mechanic estimated the damage at about $1,800 and suggested that since it was more than our $1,000 deductible we call the insurance company. All of this happened about three weeks ago.

Yesterday there was a voice message from the auto shop, saying that the car is ready to be picked up. The repairs amount to $4,000. (Now there really goes our insurance!) Our out of pocket is $1,000. The nice voice says we can pay with cash, a bank check or any credit card except American Express. The pleasant voice goes on to say that if we pay by credit card there will be a 2% surcharge assessed. Is that legal? Isn't there something in the merchant-credit card company contract that says that they can't charge a customer for using a credit card? It just doesn't seem right to me.

Thank Goodness I have the $1,000 in cash. $500 is in my short-term savings account and $500 is from the car fund. This isn't how I planned to use that money. In my January money review I speculated that I would like to pay $900 on my credit card this month. Using that $500 from the short-term savings was going to make that speculation a reality. The other $500 I wanted to leave in the car fund to use for routine maintenance on my new car. It doesn't look like either of those things are going to happen. Anyway, maybe I should ask the mechanic for a 2% discount since I'm going to pay in cash. :-)

To Quit or Not to Quit

Since my husband started his new job, he's been trying to encourage me to quit my snowflaking job. He believes that I am having too many meltdowns. He's probably right. It is challenging to work 40 hours Monday through Friday and then 16 more on the weekends. But I do it in the name of debt freedom! Anyway, his thought was that since he has an income again, we could meet our financial goals without me spending my weekends working.

So a couple of Saturdays ago I showed up at my snowflaking job, knocked on the door, and the manager let me in. As soon as I walked in, I told her that I was giving my two-week notice. She was not happy. I explained that working seven days a week was becoming a bit overwhelming. She said she understood.

I went into the back room to put my stuff away and get ready to go out onto the floor. When I came out of the back room, she asked, "Would you be willing to work one Sunday a month?" Now, I've known the manager for many years. She used to buy baskets from me when I sold Longaberger. We had lost touch until she became the store manager, and she has always been someone that I admired and respected.

I told her I would stay on and work one Sunday a month. Doing this actually serves two purposes. One is that I still get the employee discount. The second is that I still have a few snowflakes to sprinkle on my credit card debt. As you know, on December 31, 2008, the balance on my credit card will be $2,000!

Carnival of Money Stories #46

Mrs. Micah was the host of this week's Carnival of Money Stories. She did a wonderful job hosting, and I thank her for including my post on buying a car. I'm still looking and have received great suggestions from many readers. More on that later.

One reason I enjoy the Carnivals is that it's a good way to find new blogs and bloggers. Here are three new ones for me.

SB at Be Thrifty Like Us has already filed her tax return! She is pondering what to do with her tax return before the money arrives. What a great idea. I think she's very organized.

Mr. Debtbeater is getting back on track after a small detour from his financial plan at Christmastime. I wish him continued success!

Bethisway is my idol. She's going to sew (darn) her sheets. I took sewing in middle school. The teacher made us smock a pillowcase and put a zipper in. She gave me a C minus. I don't think I've sewed anything since.

Thank you for visiting collectingmycash. I hope you enjoyed these and other posts at the Carnival. Remember if you like what you read on this blog or any of the blogs at the Carnival, consider subscribing in a reader or by e-mail.

Shopping for a Car

C2 has taken over my car. I had hoped to wait until the end of June to begin car shopping. I knew he would need transportation for work, school, and after school activities, but I was hoping that it would be later rather than sooner. I had planned to save $8K to $9K by the end of June and he was to save $1K.

Well, here it is February. I have $6k and C2 has zero dollars saved. He's working almost everyday after school, so I have no ride home from the commuter lot. If I want to go to the gym or to my pilates class, I have no transportation. So as much as I didn't want to do this, I took out a $4k loan. I figured it's an improvement over totally financing a car. Before I became financially focused, I financed a new car 100%. This time I'm looking to finance a pre-owned car for $4K and with my $6K in cash pay $10K for a pre-owned vehicle. My goal is transportation. No bells and whistles.

If you are a car salesman, I mean you now disrespect. We all have to make a living. I've never sold cars, but I imagine that there is some gratification in doing so. Basically, I'm sure it's a noble profession. Here's the but...I hate the process. I don't understand why I can't just walk onto the lot and tell the salesperson exactly what I'm looking for and then he or she says to me yes we have that for you or no we don't. Why do I have to talk to one person who relates what I tell him to another person (the manager, I presume) only for that person to tell me he can't sell me what I want in that price range?

As you have probably already guessed, I spent my day at a dealership today. Even after doing some internet research and making some telephone calls, I came away with no car. I am a little disappointed, but I'll keep looking. This is a new experience because my immediate gratification self wants to spend the money on all the bells and whistles right now. But my delayed gratification self is trying very hard to be discplined and stick to the goal, which is reasonably priced transportation.

A Cash Advance?

Today I was reading Liz Pulliam Weston's piece on the tax rebate. Now, I'm not very well versed in financial matters, but that's what it sounds like to me...a cash advance. As far deep into the shackles of credit card debt that I am, one thing that I have never liked to do is take a cash advance. Why? Because whenever I cash advance, I pay a lot more interest.

So my understanding of my economic stimulus is this: Wealthy_1 we're going to advance you $1,500 ($1,200 for my husband and me and then $300 for C2) from your 2009 taxable income. Then when April 15, 2009 comes around, you've got to give it back.

Okay. So, maybe when I get the $1,500 I should put it in my savings account to earn interest so that when you ask me for it back at least I've made a couple of dollars on my cash advance. How's that going to stimulate the economy? Here's another question I have: If I owe $1,500 in 2009, does that mean I'm going to have to pay $3,000 in taxes? $1,500 that I owe and then $1,500 because of the cash advance?

Hmmm. Why am I not excited at the possibility of receiving this money?

Here's What's in My Wallet

Yesterday morning when I got to work, I decided to splurge on a cup of coffee at the little coffee shop in the lobby. In order to pay for it, I had to put down my three bags (purse, lunchbag, and tote) and get my wallet out of my purse. I pulled my $1.33 out of my wallet, paid, set my wallet on counter and put the lid on my coffee. Then I slid all my stuff to end of the counter so I could organize my bags and coffee and head towards the elevator. As I was preparing to go, I looked at my wallet sitting on the counter. I thought to myself, "If I left my wallet here and someone picked it up, would I know exactly what's in it?" I put it in my purse and was on my way.

Later in the day while perusing the blogosphere, I came across Mrs. Micah's post. She asked the same question: "What's in your wallet?" I took this as a sign. It must be time to purge my wallet and make a record of its contents. With that task completed, here's what's in my wallet.

1. My debit card.
2. Discover card. I only use this to purchase gas for my car.
3. My snowflaking job credit card. Using the card is the only way to get the employee discount. I am learning how to charge my purchase and then come home and pay the bill on line immediately.
4. A cash card for my savings account. I have a savings account at a bank far, far away. I call it my short-term spending account. I guess it's like a mini emergency fund. I transfer money into it every payday. I use it to pay for sports registrations for C2, clothing or small Ninja Bills, if necessary.
5. Driver's license.
6. A Victoria's Secret gift card that I got for Christmas. Unfortunately, I missed the big semi-annual sale.
7. Health insurance cards: medical, dental, and health allies.
8. Discount cards for Famous Footwear, Aerosoles, my favorite spa, and The Body Shop. The Body Shop card wasn't free. I'm pretty sure it was an impulse purchase on a credit card. I don't think I've used it since.
9. $6.25.

It's a good thing I did this. I had expired and obsolete cards in my wallet. I bought this wallet several years ago. I paid $20 cash for it. I like it because it's a small tri-fold wallet. If I decide to switch to a smaller purse, I don't have to worry about changing out my wallet. I'm not a big purse changer, but I guess that's a post for another day. Perhaps the real question is: What's on my key ring? That's where I keep all the scan cards.

By the way, what's in your wallet?

My Favorites from the Carnival of Money Stories #45

Welcome to collectingmycash! If you came upon this blog from the Carnival of Money Stories #45, thank you. I'm glad you stopped by. Many thanks to bankergirl who hosted the Carnival this week and included my post. This was her first time hosting a Carnival, and she did an awesome job.

Just like the Carnival host, I like to share my favorite posts from the Carnival. This week's top three are topics that I can relate to very well. Here they are.

My Dollar Plan is in the process of deciding whether to go back to work or stay at home with her children. I admire the fact that she is weighing the pros and cons. I stayed home with my kids, and I've never regretted it. What I regret is not having a plan.

Money Blue Book compares spending money on memories to spending money on stuff. Up until now, I've always spent my money on stuff. It wasn't until a couple of years ago that I figured out that I could spend money on memories. Having spent a lot of money competing in bodybuilding contests over the last two years, I think it's much more rewarding to spend money on experiences and memories than spending money on stuff.

Credit Withdrawl's post entitled Are You Afraid of Money? is very appropriate for my family and me. I have often felt uncomfortable having money left over after paying bills, and I've always had bills. Since I've started focusing on my finances, I am learning to have a better relationship with my money. I do have to remind myself on a regular basis that it's all right to have money sitting in the emergency fund. It's for emergencies.

Well, those are my picks from the Carnival of Money Stories. Which were your favorite posts?

Thanks again for stopping by. Feel free to read other posts that I've written. If you like what you read, consider subscribing in a reader or by e-mail.

The Book Meme

I've been tagged twice with a book meme. I was tagged by iowahippiechick and financeandfat.

I love being tagged for memes. I think they're great fun! Thanks Dawn and thanks Eden for tagging me!

The rules are:
Pick up the nearest book of at least 123 pages.
Open the book to page 123.
Find the 5th sentence.
Post the next 3 sentences.
Tag 5 more people.

I always have How to Stop Worrying and Start Living by Dale Carnegie next to my bed. Sometimes I just pick it up and turn to a page and start reading...like this meme! Here it is: page 123, the next three sentences after the 5th sentence.

"3. Just for today I will take of my body. I will exercise it, care for it, nourish it, not abuse it nor neglect it, so that it will be a perfect machine for my bidding."

Now, I'm going to tag Cynthia, bankergirl, ntbeachnc, moneychallenge, and Sharon.

How am I doing--January 2008

My husband set me up on MS Money. I spent most of this evening assigning categories to my entries. As old school as I am--you know, paper check register, manual recording of items--I can see the benefit in using a debit card or credit card for all purchases when using this program. Hopefully, with the February review I'll have good data. Right now in MS Money it looks like I overspent in January--there's a negative balance. I spent a lot, but I didn't overspend, and I paid cash for all of my purchases.

As you can see from the side bar, I reduced my credit card balance to $10,805. In January I paid $450 towards the balance. I'm starting to get that impatient feeling. I've been trying to figure out if I can double that in February. I'm not sure it's totally realistic.

Finally, I love interest income! My emergency fund has increased to $1,018.87. I owe it all to compounding.