I love to spoil my daughter, and I wish I could afford more of this behavior (so does she!). Instead, I often need to pull in the reins before my budget is damaged beyond repair. Since I'm a single parent, I also need to look at my motivations for my actions. Any psychologist might say I over-compensate monetarily for the times I spend away from Cora. I might agree, because when I buy things for her I feel so GOOD.

On the other hand, Cora also experiences my tight side. This side is grumpy and worried, with cramped fingers from pinching pennies too hard. Over the years, Cora and I came to an understanding of sorts about my yin-yang pattern of overspending/under-spending. If she wants something, I ask her how much she wants it. Actually, the situation improves if she wants two things. Then, I can ask her which "thing" she wants more than the other "thing." We've played this "either-or" game for years, and I'm sure it has something to do with the way she treats money today, but I'm not sure. For instance:

Cora: "I'm better with money than you are, because I'm a Taurus and you're a Scorpio."
Me: "What do sun signs have to do with money?"
Cora: "People born under Taurus are naturally frugal and they attract money like magnets."
Me: "And Scorpios are 'bad' with money?"
Cora: "Go look in the mirror."

Of course, I don't attract money "like a magnet," otherwise I'd look at myself in the mirror everyday to make sure I wrestled that last penny off my super-charged body. Instead, I avoided my reflection and reminded Cora that she probably learned the value of money as she watched several responsible adults in action over the years. I include myself on this list of responsible adults, because I try to teach her how far her money can go if she looks for bargains or how short that cash can fall if she doesn't watch where it goes. This strategy involves "either-or" choices to help save money.

I've done fairly well with this job, because just this past week she made a decision that proved she learned to rationalize her budget (which means my budget). Cora and I are movie freaks, and we spend vast amounts of time each summer in theaters or at home with videos and DVD's. One movie out in theaters this summer featured one of her favorite actors. Without my encouragement, she created a choice between movie tickets (total: $14.00) or beading wire (total: $3.49 on sale) to feed her new interest in jewelry-making. After she read a few reviews on this flick, she made the choice to catch this film next summer at home rather than in the theater. Then, she dragged me to the bead shop to buy wire. All total, this decision saved almost ten dollars (add tax to that $3.49 and it comes to a little over $4.00).

If ten dollars doesn't seem much to you, just ask your children what they would do with that money. They can dream up more ways to spend a ten-spot than they can list ways to save it. Last week, we prompted you to ask your children to make a list of how they can cut corners to save cash. One way to help them envision this process is to show them receipts from outings, like to the grocery store or to that theme park. Once they compare that tiny ice cream purchase at Wetter-Than-Wet-WaterWorld to the cost of a gallon of ice cream from the grocery store, they may experience an epiphany. Be prepared to explain why ice cream at the grocery store is much less expensive than the same product at the theme park.*

Receipt comparison is a great way to teach children about taxes and surcharges and how these amounts increase the total bill. You're also tutoring them for future tax preparation, especially if your children are old enough to understand the difference between tax-deductible expenses and what I call "frivolities," or non-tax deductible costs. If you use credit cards for payments, you might also let them compare your credit card bill to actual receipts. This way, your children get a glimpse into the harsh reality of interest rates and how these payments also add to the total cost of a specific item.

So, if Joey or Susie really, really, really wants that specific pair of shoes for school this fall, ask them what they can live without this summer so they can help you save for those shoes. Remind them that a seventy-five dollar pair of shoes might cost closer to ninety dollars after taxes and interest rates. Of course, you can always just say "no" to any request; however, remember that choices affect decisions. If you offer your child a choice between that pair of shoes and one or two other products or services, they can rationalize their decisions and learn how to focus on a specific goal.

One choice, of course, involves socking money away into their savings account and their portfolio. This is why we encouraged you to open these accounts for your children this summer (see Summer Projects I). While you may not have a Taurus in your brood, you may discover one or two children who resemble bullish savers once you open accounts for them. A child who starts back to school in the fall with less-than-cool shoes may not care if they have a savings account, a portfolio and, most importantly, some short- and long-term goals to shoot for down the road.

Hopefully, you opened a BUYandHOLD account for yourself and you've become familiar with how your online portfolio works. If so, then ask your children this week which companies from previous lists they would like to hold in their portfolios. If you can't afford to open a portfolio for each child, you might open one account and combine their choices. If you or your children are still undecided about which stocks you might pick from the lists you made earlier this summer, never fear. Cora and I will show you how we discovered a few stocks through our "either-or" money-saving strategies next week.

Until Then,
Linda Goin

* The difference in ice-cream cost could include such things as overhead, transportation, marketing, and - to put it bluntly - rip-offs. When Cora and I head out for the day, we carry back-packs filled with bottled water (we re-use our water bottles and fill them with filtered tap water) and treats (not ice cream, of course). Or, we treat ourselves to heat-sensitive treats when we arrive home. This action saves money, and it also provides a focus for something great to look forward to at the end of the day.