My Marketing Strategy
Nicolette Lemmon, President & Founder
To teach my daughter about money management and the meaning of a loan, my husband and I had her take out a loan to get her iPod Touch.
Here’s her take on what the loan meant to her…
One day I was inspired to get an iPod Touch so I went on the Internet and found how much an iPod would cost.
In my piggy banks I only came up with half the amount it cost. I decided to go to my parents and ask for a loan, and we made a deal that I would come up with the other half of the money that they lent to me by doing chores for six months which was until Christmas.
We made a chore sheet with a list of the names of the chores and places next to them to check them off. There were sections for ‘Daily Chores’ and ‘Weekly Chores.’ The ‘Daily Chores’ were for chores I had to do that day and the ‘Weekly Chores’ were usually only one or two chores, but I had to do them over the week’s time such as clean my room or wash the car.
The loan was so I could get the iPod sooner than a year later when I had saved the money. Also, I was allowed to do other money earning activities beside my already ongoing chores, such as rake the yard or baby sit. During the time of doing the chores, the best thing was I had my iPod with me because I had bought it with the loan.
There were limitations to the loan that I had to be responsible for like, if I got twenty dollars for my birthday, should I buy that cool new toy I saw at the mall yesterday or put that money into the loan? This may be tricky, but not impossible to answer. Once I put that money into the loan, I built trust with my parents.
So if you need money for something, a loan is one way to get it!
What money management skills have you passed along to others?
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Thanks, Jeffry, it is an achievement to live debt free in this economy and this society. However, as you mention, it is important to give our young people the knowledge of what it takes to utilize debt in the right way, paying it off with hard work and doing it on time to earn the trust of others. So many young adults are never schooled by their parents about credit and get mired in credit card debt that lasts for years. As my daughter becomes a young adult, there will be so many of the institutions that you write about that may come knocking at her door (and in her inbox)that I believe in having her well prepared in how she uses credit!
A generation or two ago, parents made this same kind of arrangement with their kids, except that the money wasn’t lent. The kid would have to save up and earn all the money before the iPod was purchased.
Teaching kids about credit is a necessity these days, but have we lost lessons of thrift and how to live within one’s means? I worry that kids only learn one side of the financial equation these days — that you can have anything you want with credit — fueling a continuous cycle of conspicuous spending and consumerism.
In our society, borrowing money and using credit was considered an embarrassing last resort. Now it’s everyone’s first choice. Financial marketers have done a fantastic job stripping the stigma off of borrowing. These days, you’re considered some sort of abnormal counter-capitalist if you don’t carry a credit balance. Personally speaking, I love living debt free. Debt free should be the “norm,” not “leveraged to the hilt.”