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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308428  
Subject: Debit card irresponsibility Date: 10/16/2009 10:32 PM
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This is, I guess, mostly a rant.

I am entirely irritated at the financial irresponsibility of my 18 year old son. When he was 17 he got a joint checking and savings account with his dad. He got a debit card and overdrew it. They drew the money out from savings but charged him big fees for it. I talked to him, explained it, etc. He just wouldn't write down his checking account balance so he kept overdrawing it for piddling amounts. His excuse was that he would call the recorded account information and so if it said he had $40 in his checking account he would then use the debit card and spend $30. The problem was that, for example, he would have spent $15 that day that hadn't posted yet so when it posted and then the $30 posted they would draw $5 from savings and hit him wiht a fee.

One overdraft of less than $5 led to cascading overdrafts and almost $200 in fees! We took the debit card from him for months. He reformed got it back and did the same thing. He just couldn't get it in his head that the recorded balance may not transactions that haven't posted yet. His argument is that they should be there. My argument is that is irrelevant...they aren't.

Finally a few months ago, he turned 18. We insisted that he get his own checking account (his dad didn't like having his name on a constantly overdrawn account) but forgot to take DH's name off his savings account. So yesterday I went in and made a deposit of his allowance to the savings account which I have access to since his dad's name is on it. I noticed that our son had had an overdraft on his savings account and he had zero in the account. That told me that he probably had a negative balance in his checking account. I deposited his allowance.

Today I look and he has transfered the allowance to his checking account (which I don't have access to) and he has a negative balance in the savings account (probably the overdraft fee from the checking account overdraft but unclear -- my son has no clue).

What really irritated me was that when we talked to him I found out that when he took his date to homecoming dinner last weekend he paid with the debit card knowing that he didn't have enough in his checking or savings account to pay it. He figured the bank would pay it, charge him the overdraft fee, and then he would clear the deficit when he got paid today (6 days later). (Unfortunately, he was correct). I told him (for the nth time) that the debit card is not a credit card, that the bank doesn't have to honor those and he could be charged with theft, and that eventually the bank may not want his business and no other bank will either. He had told me after the last go round that he was going to act on a cash basis but he didn't have enough for the dinner out last weekend so just put it on the debit card. I'm just unbelievably angry that he would do that knowing he doesn't have the money.

Tomorrow DH's name is coming off the savings account. That protects DH. Of course, that leaves our son to have to manage his accounts himself. He is extremely hardheaded and just won't believe it when people tell him bad things will happen. When he was in 9th grade, he didn't do his homework or turn in work and wouldn't study. We paid for a tutor and talked to him ad nauseam that he was going to fail. He refused to believe me and ended up failing 3 courses. Since then he has actually done well in school but he had to fail to get the message. I hope that he isn't going to have to suffer really bad consequences from the financial stuff before he gets that message....
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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292554 of 308428
Subject: Re: Debit card irresponsibility Date: 10/16/2009 11:20 PM
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{{{{{dm}}}}}

I haven't got any advice. He sounds like both my boss and xDH, both of whom are in their mid-forties and still behaving that way, and still think it's the bank's fault somehow.

So I'll send you all my sympathy. No advice, as I said, since I never succeeded in getting that rooted out of either of their heads. But sympathy, yes, and lots of it.


Frydaze1

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292555 of 308428
Subject: Re: Debit card irresponsibility Date: 10/16/2009 11:21 PM
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When he was in 9th grade, he didn't do his homework or turn in work and wouldn't study. We paid for a tutor and talked to him ad nauseam that he was going to fail. He refused to believe me and ended up failing 3 courses. Since then he has actually done well in school but he had to fail to get the message. I hope that he isn't going to have to suffer really bad consequences from the financial stuff before he gets that message....

I suspect he may have to suffer a bit before he really learns, but I don't think there's anything you can do. If he knows how to balance a checkbook then he has all the tools he needs.

It's hard, I know, but I guess the blessing is that he's making all these mistakes now, and he'll have a chance to learn how to deal with it before he starts moving into major league finances.

I'm not a parent, but I've always suspected that the hardest part is standing back and letting them make mistakes.

Hope he starts learning. Fast.

Nancy

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292557 of 308428
Subject: Re: Debit card irresponsibility Date: 10/16/2009 11:39 PM
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The only comfort I can offer is that he is not the first hard headed teenager who thinks he knows better than his parents.

Fuskie
Who suggests looking forward to the day he returns to you, head hanging low, as he mumbles you were right, mom, I was wrong...

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292559 of 308428
Subject: Re: Debit card irresponsibility Date: 10/16/2009 11:54 PM
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<<Tomorrow DH's name is coming off the savings account. That protects DH. Of course, that leaves our son to have to manage his accounts himself. He is extremely hardheaded and just won't believe it when people tell him bad things will happen. When he was in 9th grade, he didn't do his homework or turn in work and wouldn't study. We paid for a tutor and talked to him ad nauseam that he was going to fail. He refused to believe me and ended up failing 3 courses. Since then he has actually done well in school but he had to fail to get the message. I hope that he isn't going to have to suffer really bad consequences from the financial stuff before he gets that message....

>>



Teen agers are frequently stupid. I certainly was. He'll get over it after he butts his head against the wall often enough.


I likwe to suggest that you can diuvid humanity into three groups ----


You have a relatively small group that learns by listening to their parents, teachers and such, reading books and so on.


You have the majority who learn from their mistakes.


And you have another groups that never learns.


Judging from the grade experience, your son is in the middle group with most of us.....


Could be worse.



Seattle Pioneer

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Author: KyleJRM Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292560 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 4:44 AM
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Show him the trend. I bet it started with a small overdraft and worked its way up bigger and bigger.

Then explain to him what happens when he eventually gets an overdraft he can't pay. Shut down account, with no possibility of opening a new checking account anywhere for years.

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Author: bthomas15 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292561 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 7:30 AM
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I think you can remove the overdraft protection from the account.

My DD got into this kind of trouble with her debit card during her first year of college. She was really upset, blamed the bank, blamed everybody except herself, etc. She had to take $200 from her savings account to pay the overdraft charges, which the bank refused to waive. (And why should they? - she screwed up...)

Since I don't think she totally understood how (and why) this happened to her account - and didn't ever have enough $$ to create much of a cushion, we went to her bank and had that feature removed from the account.

She also doesn't have a credit card. She knows that she would succumb to the lure of charging things she doesn't have the money for, and I think that's wise of her.

So she has chosen to operate pretty much on a 'cash basis' these days. Maybe your DS should remove the overdraft protection from his account and then he won't be able to spend more than he actually has.

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292562 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 8:48 AM
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If the kid is 18 and the account is in his name, they pretty much cannot do anything but talk to him.

Fuskie
Who has had a checking account his parents could not ever see since he was 18 oh so very long ago...

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292564 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 9:35 AM
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Of course, that leaves our son to have to manage his accounts himself.

Sounds like it's time for him to grown up. IMO, you shouldn't even be depositing his allowance directly into his account - send him a check and let him deal with mail/deposits.

Tell him you're willing to show him how to record transactions in his check register and balance his account, tell him about overdraft protection (sounds like he's the perfect customer for this, and frankly it would be cheaper than all those one-time fees) - and then let him learn how to swim.

He has to decide for himself whether a little bookkeeping is worth not paying overdraft fees on, or if he's just find giving the bank a large portion of his allowance/income.

(and personally, I don't think a bank that is constantly charging a customer overdraft fees is in any rush to drop that customer, since the bank is making money off that customer and not folks like me who never overdraw their accounts).

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292567 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 11:13 AM
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tell him about overdraft protection (sounds like he's the perfect customer for this, and frankly it would be cheaper than all those one-time fees)

Umm...you miss the point. He has overdraft protection (whether I like it or not) and that is where the fees come from.

As far as the transferring money directly to his account. We started doing that with all our kids (others are under 18) and it has overall worked well...and he does get overdrawn with money that he deposits as well (such as his paycheck). So I don't think the direct deposit by us is the problem...but DH is not willing to have his name on a joint account with our son anymore so yes we will be writing him a check for his allowance from now on and he will have to handle the overdrafts himself.

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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292568 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 11:19 AM
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but DH is not willing to have his name on a joint account with our son anymore so yes we will be writing him a check for his allowance from now on

Depending on your bank, you might still be able to do a transfer even though your name isn't on the account. If both accounts are at the same bank it shouldn't be any problem at all, and even if they aren't some banks will handle it. I know through BofA I can set up inter-bank transfers online with no hassle at all.

You may still decide to pay him by check for other reasons, but you don't *have* to make things more difficult for yourself just because it's no longer a joint account.

Frydaze1

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292569 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 11:49 AM
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Umm...you miss the point. He has overdraft protection (whether I like it or not) and that is where the fees come from.

Would discontinuing the "overdraft protection" help? It won't stop all overdraft fees, but might limit them.

It sounds like it doesn't bother him to pay the fees. I don't understand. Hopefully, soon he will realize what he is losing by paying unnecessary fees.

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Author: send123ca One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292571 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 12:02 PM
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I say let him "fail" and learn is own lessons. At some point he will know what to do with small amounts like $200, so that hopefully in the future he will handle bigger amounts correctly, for example a $20,000 car or a $200,000 house purchase.

How do kids learn not to touch the hot stove? By touching the hot stove.

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Author: FadeMe Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292574 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 2:29 PM
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Sounds to me like mum's always coming to the rescue. Why should he worry about it if you do enough for the two of ya? Maybe this is his way of resenting ur micromanaging his affairs. Anyway you may be a bit overly-protective because you know what's right and the little bugger is messing up so much.

They're two ways to handle this. Either cut the purse strings and have no involvement, or make sure that account stays fat. If you supply him with enough monies to live the lifestyle he craves then that will cure the current overdraft problem.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292575 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 3:40 PM
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I say let him "fail" and learn is own lessons.

Umm....I have been. That is, I haven't bailed him out on this. It is just that he doesn't seem to be motivated by throwing money out the window on those fees. I've warned him of possible consequences. He says he won't do it again but then does it again when he wants to spend something. I've not done anything to keep from failing but the consequences have not yet been sufficient for him to change his ways.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292576 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 3:49 PM
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Sounds to me like mum's always coming to the rescue

What are you talking about? How did I come to the rescue. I told him I thought he was wasting money. I told him of the potential consequences. How is that coming to the rescue? I didn't cover his overdrafts or intervene with the bank? Color me confused.

And, how am I micromanaging or being overprotective? When he first got the account he had just turned 17, and had a joint account with dad (required by the bank, btw). I thought he simply lacked information so tried to teach him. When he did it again, we took his debit card away. He was still 17. That is called parenting.

This time, he is over 18 and I did point out to him what I had seen (I wasn't going online to check his account by the way...I went online to deposit his allowance into his account and noticed this). I guess I could have just said nothing. OTOH, his dad doesn't want his name on the account any more and will close it. Isn't it a courtesy to tell my son of this and to point out the problem? (This time was different from the others in that in the other instances he had called the bank recording and thought he had enough money in his account but was wrong. This time he deliberately did it). I guess I could have just let his dad close the account and not told him. He is still in high school so I sort of think it is OK to be a parent and tell him what is going on.

And why would I supply him with enough money to live the lifestyle you say he craves? He has an allowance and a job and we pay for certain other things (medical bills, school expenses, groceries, and so on). I think that is sufficient.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292577 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 3:55 PM
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What are you talking about? How did I come to the rescue. I told him I thought he was wasting money. I told him of the potential consequences. How is that coming to the rescue? I didn't cover his overdrafts or intervene with the bank? Color me confused.

And, how am I micromanaging or being overprotective? When he first got the account he had just turned 17, and had a joint account with dad (required by the bank, btw). I thought he simply lacked information so tried to teach him. When he did it again, we took his debit card away. He was still 17. That is called parenting.


I think people were misreading your post and thought, mistakenly, that you had been covering some of the overdrafts.

But I think the time has come when you don't even mention it to him. Just let it go. If he asks for help (in terms of learning how to balance his checkbook) that's one thing. But otherwise, don't even mention it.

His problem. Not yours, any more.

Nancy
who is learning that there is a time when you have to stop helping a parent, since she never listens.

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Author: Frydaze1 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292578 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 4:54 PM
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Nancy
who is learning that there is a time when you have to stop helping a parent, since she never listens.


I don't know how much you've told this board. And *I* know you're speaking of helping your mother. But it sounded for a moment like you meant it was time to stop helping determinedmom. ;-) Just wanted to put this out here in case anyone misunderstood.


Frydaze1

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292579 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 5:19 PM
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But I think the time has come when you don't even mention it to him. Just let it go.

Oh, I already told him that the other day when I told him that the account was being closed (since his dad was on it) and told him of the potential consequences. I told him that if he opened another savings account and did the same thing I wouldn't even know about it and it was his problem.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292580 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 5:27 PM
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I don't know how much you've told this board. And *I* know you're speaking of helping your mother. But it sounded for a moment like you meant it was time to stop helping determinedmom. ;-) Just wanted to put this out here in case anyone misunderstood.

You're right; should have been more specific. My mother is now in assisted living, and, as I said in an email to my brother and sister just yesterday, I think she's tired of being told what to do.

Nancy

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292581 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 6:33 PM
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His excuse was that he would call the recorded account information and so if it said he had $40 in his checking account he would then use the debit card and spend $30. The problem was that, for example, he would have spent $15 that day that hadn't posted yet so when it posted and then the $30 posted they would draw $5 from savings and hit him wiht a fee.

One overdraft of less than $5 led to cascading overdrafts and almost $200 in fees!


It's nice to know that I'm not the only parent looking at something like this. Daughter had cascading overdraft fees every pay period, as she tried to figure one way and another to spend money before she had it. Eventually the bank shut her off. She did pay back the built up debt of overdraft fees, but decided she couldn't handle a checking account with a debit card and is now living with no bank account.

I cringe, but she learns how she learns and not the way I would like her to learn.

Patzer

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Author: tanaquil Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292582 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 7:07 PM
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Overdraft fees: sigh... been there, done that. As the child, not the parent, and until I was a lot older than 18, I'm sorry to say. I never recklessly spent money I didn't have, but I was often guilty of not paying attention until too late, and I may have gambled on money coming in before it went out, a time or two.

YNAB completely cured me of this behavior, FWIW. I always *meant* not to spend more than I had, but it took YNAB to teach me how to actually do it. determinedmom, have you tried setting your son up with YNAB (since I think you already use it) and showing him how to use it? Of course, he won't actually apply it until he's ready. But it's always good to give him as many tools as possible, even if it takes him years to learn the value of using them.

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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292584 of 308428
Subject: Re: Debit card irresponsibility Date: 10/17/2009 11:47 PM
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My kid stopped the overdraft protection on his account. That means that when the debit card is used the transaction will be denied. It doesn't always work, but it helps. For example if he writes a check and the check hasn't cleared then uses the card the transaction will go thru, but the check will bounce if there isn't enough funds. He mostly just uses the card so it has solved the problem of the overdraft fees.

Jean

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Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292589 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 8:16 PM
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I would be embarrassed to say the age at which I finally became responsible with money. But it did happen eventually.

Here's what I would do:

Tell him it seems like he's just taking the allowance you provide and handing it over to the bank. Since it's not going to help him, but instead going to help the bank, you're unwilling to spend your money on it. No more allowance.

If he wants further allowance, he has to show you his previous bank statement. However much he has in preventable fees is deducted from the allowance you provide.

Not saying it's a good idea for you; I don't know. But it's what I would do.

xtn

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Author: stardustangel Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292590 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 8:56 PM
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I'm curious, why does he even get an allowance? He graduated right? He has a job, right? When he realizes that it is his own hard earned money that he's wasting, he may learn that much faster. Nothing like money that comes only when he puts the hours and the labor in. He has a weekly supply of money from Bank of Mom and Dad conveniently placed into his account. Since he knew that mom would be putting the money in his savings account to cover the overdraft checking account, why shouldn't he lose the $35 or so to impress a girl with a nice dinner by slickly whipping out the debit card. Win-win situation. What else is he using the allowance for besides paying for his dinner dates?

I have to say, I am pretty impressed with your son that he has a job especially when he has Bank of Mom and Dad. He has learned some degree of financial responsibility, let him finish the lesson by having him cover all his expenses.

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Author: ishtarastarte Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292591 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 9:16 PM
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She did say he is still in high school, so he has not graduated.

Ishtar

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292592 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 9:37 PM
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I read the whole thread. It seems to me that there is an elephant in the room and no one wants to say anything about it. I guess I'll take the heat for mentioning it.

Your kid is mishandling money. Kids are pretty observant and often imitate their parents. Have you considered that your own mishandling of money over the years rubbed off on him?

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292593 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 10:04 PM
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I read the whole thread. It seems to me that there is an elephant in the room and no one wants to say anything about it. I guess I'll take the heat for mentioning it.

Your kid is mishandling money. Kids are pretty observant and often imitate their parents. Have you considered that your own mishandling of money over the years rubbed off on him?


That could well be. Or might not be. Some people have shown up on the boards admitting that they ignored what their parents did, and are now in debt, others have shown up with clean records despite having parents who wouldn't know how to save a penny if their life depended on it.

However, this hasn't been a blame session. It started as a rant, and some people have offered advice that might or might not work.

So I'm not sure why you're trying to blame her for the problem when that has not been the focus of the thread. It could be DNA, it could be bad parenting, it could be that the kid has to learn by falling down and counting the bruises. That has nothing to do with the matter.

Nancy

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292594 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 10:13 PM
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Who knows why he mis-handles money. It's not the elephant in the room, it just is - period.

My brother & I were raised the same way - I am very careful with money, have almost always had a budget and have never had debt (except house). My brother - raised in exactly the same way by the same parents has never been able to handle money, and has had a number of issues and disasters.

As to the issue, I would say the same as most people - let him sink or swim.

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292595 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 10:37 PM
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So I'm not sure why you're trying to blame her for the problem when that has not been the focus of the thread. It could be DNA, it could be bad parenting, it could be that the kid has to learn by falling down and counting the bruises. That has nothing to do with the matter.

Well, I have not read every single determinedmom post. I don't know how much of her past spending problems that she shared with her son. Maybe a heart to heart talk about how she got into credit card debt and how she fought to get out may help him.

The focus of the thread is his irresponsibility with a debit card. Without finding the cause of this irresponsibility, many suggestions may work temporarily but probably fail without fixing the cause.

I think it has a lot to do with the matter.

PSU

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292596 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 10:48 PM
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Your kid is mishandling money. Kids are pretty observant and often imitate their parents. Have you considered that your own mishandling of money over the years rubbed off on him?

I disagree with this. My parents mishandled money (foreclosure, bankruptcy, and multiple years of unfiled income taxes, anyone?). I have one sibling who has been in money trouble, and another sibling who is tighter with money than me. All raised by the same parents, with less than 6 years between oldest and youngest.

AJ

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292597 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 11:02 PM
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The focus of the thread is his irresponsibility with a debit card. Without finding the cause of this irresponsibility, many suggestions may work temporarily but probably fail without fixing the cause.

I think it has a lot to do with the matter.


The problem is that he calls the bank, gets the balance, and thinks that's how much money he has available, without realizing that there are still extra charges outstanding. Or he thinks that money deposited later will automatically wipe out the shortage.

What I suggest would be a few months of working in a bank to understand the system, rather than going years into the past and psychoanalyzing him to find out why he can't keep his balance straight. I know that doing bank temp work totally altered my understanding, and I can see how mistakes happen and how I can help avoid them.

But if you think that psychoanalysis is the answer, go ahead.

Nancy

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292598 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 11:08 PM
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I disagree with this. My parents mishandled money (foreclosure, bankruptcy, and multiple years of unfiled income taxes, anyone?). I have one sibling who has been in money trouble, and another sibling who is tighter with money than me. All raised by the same parents, with less than 6 years between oldest and youngest.

Hey, I didn't say it was absolutely due to following the habits of the parents. I'm sure there will be many posts to follow that says the same thing you just did. But I have seem plenty of examples where the kid is a chip off of the old block. It shouldn't be discounted when looking for a solution.

PSU

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292599 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 11:48 PM
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Well, I have not read every single determinedmom post.

I know....so much easier to just think I'm a rich a...... Somehow I wonder if these posts of your have something to do with that other thread on the other board where we disagree. Maybe not, though so I'll go on.

I don't know how much of her past spending problems that she shared with her son. Maybe a heart to heart talk about how she got into credit card debt and how she fought to get out may help him.

He doesn't know we were ever in credit card. There was no obvious sign of it. We never missed a payment for anything, didn't argue about money, etc.

I have told him is to not get into debt, don't spend money that you don't have. I've talked to him about planning and budgeting.

The focus of the thread is his irresponsibility with a debit card. Without finding the cause of this irresponsibility, many suggestions may work temporarily but probably fail without fixing the cause.

I'm not sure that is true. In some instances it might be. My parents, btw, were extremely frugal. Paid off their house early, never borrowed money for anything. It did not rub off....

I'm not sure that even I understand why I was irresponsible in going into debt. To some extent I may have resented my parent's extreme frugality when I was younger and the world was like a big candy store when I was able to earn my own money. But, really I wouldn't attribute it to that.

I think I had difficulty with the idea of waiting for things and wanted what I wanted when I wanted it and figured the interest I paid was worth it to get it know. And, then...I changed. I'm not sure that came from any deep understanding of how I got there.

But I have seem plenty of examples where the kid is a chip off of the old block. It shouldn't be discounted when looking for a solution.


That could be. But in this case that block isn't me.

My son did have one particularly poor parental role model who had severe financial problems and lived in poverty. In fact that parent's financial poverty was so extreme that it resulted in the inability to support his children which resulted in my husband and I adopting our son when he was almost 9 years old. One could hypothesize that those early experiences might explain some of this, but I'm not really sure that it does.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292600 of 308428
Subject: Re: Debit card irresponsibility Date: 10/18/2009 11:57 PM
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I'm curious, why does he even get an allowance? He graduated right? He has a job, right?

He is a senior in high school. He has not graduated. During the summer he started a part time job. In his case, his allowance is reduced relative to those of his siblings because car insurance comes out of his allowance. One condition of him getting a driver's license was that he had to pay for the extra car insurance cost and his gasoline.

What else is he using the allowance for besides paying for his dinner dates?

All of his clothes.
School lunches.
His cell phone and any minutes/charges he uses.
Gifts that he gives.
Gasoline.

Once he pays for insurance, clothes, school lunches, cell phone, gasoline and gifts...well there isn't much left over for dates or other social events. Hence, his desire to have a part time job.

We used to pay for clothes and school lunches for the kids but increased their allowance and made them responsible for it. We wanted them to have to make choices with money and learn how to budget their use of money. Overall, it has been a good decision and has worked well with his siblings.

We believe it is appropriate to give him an allowance just as his siblings receive an allowance. We have told him that the structure of what we will pay for and how it is paid will change once he starts college.

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Author: ItsGoingUp Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292601 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 2:01 AM
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determinedmom wrote:
I am entirely irritated at the financial irresponsibility of my 18 year old son....

It sounds to me like DS isn't irresponsible, he's simply stubborn. He doesn't like how the bank does business and he persists in doing it his way despite the evidence that it isn't working. He isn't refusing to pay the penalties, so it's pretty much akin to civil disobedience. Such are the people who change the world! Sure is frustrating to be living with one though.

But surely he has some model that will work for him. And surely amongst the myriad of financial institutions and instruments out there is one that will provide him with what he wants. I suggest he goes shopping for that, perhaps with your enlightened guidance. The proper lesson to be learned from this exercise is that an unhappy customer should take his business elsewhere.

Another relatively simple short term solution is to put $500 or your money in each of his accounts to raise the balance. Charge him $100/year interest (20%) on each, more or less. He won't incur charges any more, which will cost him less, plus you'll get better interest than you would anywhere else. Frustration gone. Everybody wins. The downside is also nothing is learned. On the other hand all he's going to learn is that this bank doesn't work the way he likes and it's expensive for him to ignore that.

-IGU-

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292603 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 4:00 AM
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<< He isn't refusing to pay the penalties, so it's pretty much akin to civil disobedience. Such are the people who change the world! >>



That's optimism on a breath taking scale.


<<Another relatively simple short term solution is to put $500 or your money in each of his accounts to raise the balance. >>



I'm trying to guess how long it would take a little more "civil disobedience" to reduce that cushion back to the vicinity of zero.

Not long.






Seattle Pioneer

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Author: DocHollandaise Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292605 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 8:44 AM
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LOL at this entire thread.

What's the problem?

You're not obligated to provide him with a car, access to a car, car insurance, a checking account, a cell phone, or any of that other nonsense.

Are you giving him 3 hots and a cot? Medical insurance?

That's it, anything else is a gift.

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292606 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:10 AM
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Your kid is mishandling money. Kids are pretty observant and often imitate their parents. Have you considered that your own mishandling of money over the years rubbed off on him?

*waves hand*

Hello, over there! I have a similarly irresponsible almost-adult daughter. I'm 99.995% sure that her mother's mishandling of money contributed significantly to her attitudes and behavior problems.

Now that we have cause out of the way, what is to be done about it?

We can address the cause. Daughter's mother drove away from the marital home for the last time shortly before daughter's 16th birthday, and the divorce was final for all purposes shortly before daughter's 18th birthday. This left me to finish raising daughter, with all the impact of her first 16 years to deal with.

Now that the cause is out of the way, what do we do about the leftover effects? I can talk to daughter about money. Check. I can model good money management. Check. I can talk about, and model, practicing delayed gratification. Check.

At some point, daughter has to learn to internalize what she's learned intellectually and actually be able to let money sit unspent. So far, she's progressed to the point of deciding she can't handle a checking account because she'll use the debit card to spend before she has the money. Yeah, I'd really like her to be able to leave money alone and have a bit left over by next payday; but that's not where she is. Recognizing what gets her in trouble and eliminating one of the triggers is the best she can do right now.

Daughter spent a lot longer than I liked disbelieving in the consequences of spending the money before it was there. For example, the bank told her that ATM transactions late Thursday night would be posted on Friday. She reasoned that she should be able to take $20 out on Thursday night, because she got paid Friday. Bank of Satan let her take out $20 that she didn't have, but charged the overdraft fee. After the third time of hearing how it's all the bank's fault, I didn't have much patience with a daughter who wanted to interpret things in her favor instead of trying to understand how things really work. But it took a lot of reps of reality hitting her over the head for that to soak in.

I see DM's son as being a lot like my daughter. It's not that he can't understand. It's that his decision making process isn't anything like mine or DM's, and the incentives that most of us think ought to get him to change aren't working. At times, he will know what the consequences are, but just *not care* at the time the spending decision is made. ("If I dood it, I get a whuppin' . . . I dood it!")

It's not an easy parenting situation. After a child has attained the legal age of majority, but before the child is economically independent, the parents don't have a lot of enforcement choices in the area of finances. In most cases, the parents have a decade and a half of history of the kid learning responsibility gradually and the kid is close to ready to make it on his own. DM and I just happen to have outlier cases that make us want to rant now and then.

Patzer

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Author: DocHollandaise Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292607 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:24 AM
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I am entirely irritated at the financial irresponsibility of my 18 year old son.

Timmy Geithner's mom feels exactly the same way.


When he was 17 he got a joint checking and savings account with his dad. He got a debit card and overdrew it. They drew the money out from savings but charged him big fees for it. I talked to him, explained it, etc.

If the account was joint with Dad, why did you even get involved with this? Wouldn't this issue be between the boy and his Dad? What if anything did his Dad have to say to him about this?


He just wouldn't write down his checking account balance so he kept overdrawing it for piddling amounts. His excuse was that he would call the recorded account information and so if it said he had $40 in his checking account he would then use the debit card and spend $30. The problem was that, for example, he would have spent $15 that day that hadn't posted yet so when it posted and then the $30 posted they would draw $5 from savings and hit him wiht a fee.

Again, who cares? You're just describing the mechanics of the particular situation. If you make mistakes of this kind, the banks hit you for some exorbitant fees. So what? It's not really that big of a deal in the great scheme of things.


One overdraft of less than $5 led to cascading overdrafts and almost $200 in fees! We took the debit card from him for months. He reformed got it back and did the same thing.

O.K. it's pretty clear what's going on isn't a "financial management" issue, it's purely "family dynamics." A tug of war is going on of some kind. You say he "reformed" and then "did the same thing." Obviously he never "reformed." And the real issue is, you/your Husband did not reform, because you gave him the debit card back!!!! That's you/your hubbie's fault, not the son's.



He just couldn't get it in his head that the recorded balance may not transactions that haven't posted yet.

Irrelevant, entirely irrelevant. The issue is why you/your husband gave him the (joint account) debit card back again. I mean that's the REAL issue in all of this.

Really, if you want to give him money, what is wrong with simply doling out cash on an "as needed, as justified" basis?



His argument is that they should be there. My argument is that is irrelevant...they aren't.

LOL, why are you "arguing" with him about this? You/your husband have absolutely no obligation to co-sign a debit account with your son. It's completely unnecessary. You can simply tell your son "We don't feel like being co-signers on a debit card account with you anymore, but thank you anyway." When he asks "why" all you have to say is "we don't want to." You don't owe your son an explanation at this point.


Finally a few months ago, he turned 18. We insisted that he get his own checking account (his dad didn't like having his name on a constantly overdrawn account) but forgot to take DH's name off his savings account.

If you/your husband "forgot" to remove DH's name, that's entirely DH's/your fault, not your son's fault.



So yesterday I went in and made a deposit of his allowance to the savings account which I have access to since his dad's name is on it. I noticed that our son had had an overdraft on his savings account and he had zero in the account. That told me that he probably had a negative balance in his checking account. I deposited his allowance.

LOL, you added MORE money AFTER discovering your son had again overdrawn the account? Why on Earth would you do that? Why are you still even giving him "allowance"?



Today I look and he has transfered the allowance to his checking account (which I don't have access to) and he has a negative balance in the savings account (probably the overdraft fee from the checking account overdraft but unclear -- my son has no clue).

Are you sure your son made the transfer not your DH? Besides once you deposited the money in the account it's no longer yours, he/they can do whatever he/they want with it.



What really irritated me was that when we talked to him I found out that when he took his date to homecoming dinner last weekend he paid with the debit card knowing that he didn't have enough in his checking or savings account to pay it.


OK reality check time. I can't believe you are serious now. It's homecoming dinner, he's out with a hot date, you think he's not going to show her a "good time" to the max??? You actually think an 18 year old healthy male is going to let a couple hundred in bank overdraft fees get between him and getting some potential "homecoming p**n"?

EVERY normal 18 year old on the PLANET would max that card out including overdrafts as much as possible.


He figured the bank would pay it, charge him the overdraft fee, and then he would clear the deficit when he got paid today (6 days later). (Unfortunately, he was correct). I told him (for the nth time) that the debit card is not a credit card, that the bank doesn't have to honor those and he could be charged with theft,

"theft"?


and that eventually the bank may not want his business and no other bank will either.


Um, he's got a co-signer, right? The bank LOVES his business, it's very profitable.



He had told me after the last go round that he was going to act on a cash basis but he didn't have enough for the dinner out last weekend so just put it on the debit card. I'm just unbelievably angry that he would do that knowing he doesn't have the money.

Actually I think the kid is very smart, he can see the forest, you're looking at the trees. If you take the homecoming date to Taco Bell rather than puttin' on the Ritz do you really think a hot time on Lover's Lane is in the cards? I think your son, under the circumstances, made a very rational decision, to show his date a really good time, not be Mr. El Cheapo.

He made a very wise use of available credit, i.e. the ability to overdraft in exchange for Paradise by the Dashboard Lights. If he cheaped out on the homecoming date it would have destroyed his reputation/mojo as well as ruined his evening. You're being penny wise and pound foolish here, looking it through your eyes, not the perspective of a horny 18 year old male on a homecoming date.w



Tomorrow DH's name is coming off the savings account. That protects DH.

Again, are you sure it's your son not DH who's responsible for all the overdrafts? Blaming it on your son would provide your DH with an excellent "cover story" if a cover story is needed as to who exactly spent three hours at the Shangri La Roadside Motel. Just sayin'.

Of course, that leaves our son to have to manage his accounts himself.


He'll do just fine. He sounds like he has a good head on his shoulders.


He is extremely hardheaded and just won't believe it when people tell him bad things will happen.

That's because bad things won't happen. Not to be crude, but maybe because he put on the Ritz for homecoming date, rather than taking her to Taco Bell, he got some sexual activity of some sort out of it, that he might not have gotten otherwise. Maybe he didn't have sex but he had a GREAT TIME anyway because he showed his girl a heckuva good time. Maybe showing the homecoming date a GREAT TIME, creating some great memories, having a BLAST, was WELL WORTH it.

When he's at his 10th, 20th, 30th reunions, maybe now he has a story worth telling. Not: "We went home early because I didn't want to overdraft my dad's debit card. Therefore Peggy Sue thought I was a cheapass 'spergin' tightwad and I never got married. Here I sit in my lonesome garrett dreaming about whatever happened to Peggy Sue, but damn at least I have an 850 FICO so I guess I 'win.'"


When he was in 9th grade, he didn't do his homework or turn in work and wouldn't study.

ZOMG. Homework is a waste of time anyway, mostly.


We paid for a tutor and talked to him ad nauseam that he was going to fail. He refused to believe me and ended up failing 3 courses.

Hey the world needs plumbers, bakers, and auto mechanics.


Since then he has actually done well in school but he had to fail to get the message. I hope that he isn't going to have to suffer really bad consequences from the financial stuff before he gets that message....

It sounds like your son is perfectly normal, what are you worried about?

You're failing to see the context of anything. First of all you/your DH obviously "enabled" repetition of the finanicially irresponsible behavior by leaving your DH's name on the account. Second, you CANNOT POSSIBLY blame your son for overdrafting ON HOMECOMING NIGHT.

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292609 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:34 AM
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I know....so much easier to just think I'm a rich a...... Somehow I wonder if these posts of your have something to do with that other thread on the other board where we disagree. Maybe not, though so I'll go on.

No it doesn't. As you may recall, I never called you that name and I never made fun of your au pair. All I didn't was comment on the rich part which I stand by. You would know that because I replied directly to you so the reply is in your "Replies to Your Post" box. It is not my job to defend you if someone else is making fun of you.

He doesn't know we were ever in credit card. There was no obvious sign of it. We never missed a payment for anything, didn't argue about money, etc.

Maybe you should tell him. To put as much debt as you did on your card, you had to use it often. You probably rarely paid cash for something. To some kids, the credit card may look like something that can buy you lots of stuff but they don't know at the end of the month, a bill arrives and it needs paid.

I think I had difficulty with the idea of waiting for things and wanted what I wanted when I wanted it and figured the interest I paid was worth it to get it know. And, then...I changed. I'm not sure that came from any deep understanding of how I got there.

Maybe your son has a difficulty of waiting too. It is a difficult lesson to learn. I know because my oldest daughter has that same difficulty. We have to explain to her that we don't something just because we can afford it. Right now, I'm teaching her that she has to do something to get her unlimited texting. That something is clean the house.

My son did have one particularly poor parental role model who had severe financial problems and lived in poverty. In fact that parent's financial poverty was so extreme that it resulted in the inability to support his children which resulted in my husband and I adopting our son when he was almost 9 years old. One could hypothesize that those early experiences might explain some of this, but I'm not really sure that it does.

It wouldn't surprise me that it has an effect. My wife's uncle grew up poor. He worked his way up from stock boy at a grocery store to the president of the grocery store chain. His children get everything they ask for. The older son drives around in a BTW and runs up $2500 monthly credit card bills even though he has full board, food service and cleaning service. IMO, his dad is making up for everything he missed out on as a child.

It seems your son has trouble with visualizing money by looking at a statement or viewing transactions online. Some kids learn better if you can demonstrate what you want them to learn. Take a stack of money that represents his monthly allowance. Then pull from the stack the amount that represents his fees that he pays. I would pull $200 that you mentioned he racked up in fees one month. Show him what is left over. Show him that this stack of money you pulled off for fees could be available to him if he tracked his spending better.

PSU

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292610 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:37 AM
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You're failing to see the context of anything. First of all you/your DH obviously "enabled" repetition of the finanicially irresponsible behavior by leaving your DH's name on the account. Second, you CANNOT POSSIBLY blame your son for overdrafting ON HOMECOMING NIGHT.


DocHollandaise,

I'm sure you mean well. But sneering and jeering at every single sentence isn't always helpful, and reading ahead might alter some of your comments, since she explained several matters you questioned.

Nancy

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292611 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:40 AM
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But surely he has some model that will work for him.

Maybe the envelop system is what he needs. There are plenty of success stories on this website using that system to control their spending.

PSU

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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292612 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:43 AM
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Wow DocHollandaise, that was the most useless post ever.

I can't believe you just boiled down the whole issue that had been building for months to "your son was trying to get laid" plus cast aspersions on DM's husband.

DM,

I think you're on the right track by giving him an allowance and expecting him to live off it. He'll get it figured out more when he's on his own and those overdraft fees can mean the difference between being able to cover his rent check AND being able to eat that month. I'd agree with taking your husband's name off the savings account and giving him an allowance by check (make him go deposit it, so the money doesn't appear there "by magic"). Are there any strings attached to the allowance, like a chore list, doing all his homework?

Lara Amber

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292613 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:43 AM
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All I didn't was comment

did

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292614 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:47 AM
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But surely he has some model that will work for him.

Maybe the envelop system is what he needs. There are plenty of success stories on this website using that system to control their spending.

Oh, he has a system alright - it's okay with him to pay the overdraft fees.

To find another system, the first thing that he has to do is to decide to control his spending. Until he decides that, no system or model is going to overcome his desire to spend money even when he doesn't have it.

AJ

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292615 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:48 AM
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DocHollandaise,

I'm sure you mean well.


That's a very generous assumption, given the tone and content of the post you're replying to.

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Author: DocHollandaise Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292616 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:52 AM
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DocHollandaise,

I'm sure you mean well. But sneering and jeering at every single sentence isn't always helpful, and reading ahead might alter some of your comments, since she explained several matters you questioned.

Nancy


I did "read ahead." I didn't jeer and sneer at every single sentence, I gave honest answers and honest reactions.

What you've got here is determinedmom coming off as supposedly being oblivious to a situation which she and her DH are responsible for having created. It's called "enabling" or "codependent" behavior.

Off the top of my head and without even looking at the post again I can think of at least three obvious examples--

1) they gave the debit card back after the first overdraw incident, because they decided he was "reformed"; then pretend to be "shocked, shocked" that he would do it again;

2) DH "forgot" to take his name off the account--are you KIDDING me?

3) determinedmom checks the account, sees that it has a negative balance, yet deposits more money into it (what she calls "allowance") anyway. "Hey son I know you mismanaged your finances, here's some more to mismanage." O.K. whatever.

If I broke down her posts on this thread in some more detail, I'm sure I could find even more obvious examples of enabling, co-dependent behavior.

This is all about determinedmom and her DH's management of the relationship with their son, it has nothing whatsoever to do with the son's financial management skills.

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292617 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 10:02 AM
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Oh, he has a system alright - it's okay with him to pay the overdraft fees.

To find another system, the first thing that he has to do is to decide to control his spending. Until he decides that, no system or model is going to overcome his desire to spend money even when he doesn't have it.


If he doesn't have a debit card, then when the envelop runs dry, so does the spending.

PSU

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Author: DocHollandaise Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292618 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 10:06 AM
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Wow DocHollandaise, that was the most useless post ever.

On the contrary my post was the most to the point and useful post in the entire thread. The question determinedmom has failed to address is the obviously co-dependent, enabling behavior exhibited by herself and her DH with respect to her DS's mishandling of his finances.


I can't believe you just boiled down the whole issue that had been building for months to "your son was trying to get laid" plus cast aspersions on DM's husband.

I didn't. I simply pointed out the absurdity of, after the fact, expecting any other outcome based on the facts as they were presented by determinedmom. By the enabling/codependent actions of determinedmom and her spouse, she basically was telling her son that it was OK to do what he was doing and that there would be no real consequences.



DM,

I think you're on the right track by giving him an allowance and expecting him to live off it.


Ridiculous, this is exactly the wrong track, he should get no allowance whatsoever. If he is living at home with his parents, he gets "three hots and a cot", medical insurance, and maybe some necessities such as clothing and toiletries. If he is NOT living at home then he should get nothing at all from his parents. "On his own" means exactly that.

If he needs money for a particular discretionary item, then he needs to get a part time job and earn that money himself. He can work at McDonalds or mow lawns on the weekends or something. He will learn responsibility that way. If there is something in particular he can justify a hand-out for, then let him approach his parents in advance and justify it. They can then dole out the cash to him as they do or do not see fit. No credit cards, no debit cards, no checking account, no savings account other than such as the son may be able to establish completely on his own initiative and with his own money and solely on his own accountability.



He'll get it figured out more when he's on his own and those overdraft fees can mean the difference between being able to cover his rent check AND being able to eat that month.

People have to stop thinking that they can "control" or "dictate" what other people learn, think, do, etc. Determinedmom and her DH can only control what THEY do, not what their son does or does not do. He may NEVER learn to be financially responsible. Some people never do. But you do not "teach" financial responsibility by failing to model it, and modeling its opposite, financial irresponsibility--specifically, agreeing to co-sign a debit account with someone (their son) who is himself financially irresponsible--is not going to "teach" anyone anything of value.


I'd agree with taking your husband's name off the savings account and giving him an allowance by check (make him go deposit it, so the money doesn't appear there "by magic").

LOL, treat him like a child, he will continue to act like a child. You can't "make him go deposit" a check you give him. Either you give him the check and he does what he wants with it, and you trust his judgment, or you don't give him the check in the first place. No allowance. There's no obligation to give an "allowance" to an 18 year old. An "allowance" is something that a parent gives to a child.

If he needs "money," that's a different story. He can put in requisitions for money on an "as needed" basis. You can then decide on a case by case basis whether or not the requisition has been adequately justified. If you trust him, give him cash. If you don't trust him, you don't give him control over the money, be it cash, check, or whatever.


Are there any strings attached to the allowance, like a chore list, doing all his homework?

Lara Amber



Remove all "strings." Cut the strings.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292619 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 10:19 AM
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That's a very generous assumption, given the tone and content of the post you're replying to

I think it was generous, too. But I didn't see any use in saying what I wanted to say.

Nancy

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292620 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 10:37 AM
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If he wants further allowance, he has to show you his previous bank statement. However much he has in preventable fees is deducted from the allowance you provide.

I disagree with this tactic. Micro-managing someone doesn't help them become finanically responsible and independant. And few people enjoy being nagged, so nagging someone rarely gets them to change (and telling someone something more than once when they haven't asked for advice is usually considered "nagging").

IMO, if you don't like how someone else is spending money you've given them, than don't give them any money. But once you give someone else money it's basically out of your hands how they spend it.

So if DM wants to continue to give an allowance to her adult son, IMO the best course for both would be if he had his own account and she no longer had access to it to see how he's spending his money. That way she wont get aggrevatted if she see's he's paying overdraft fees. But she can certainly keep the lines of communication open should he want advice on her on how to pay less for banking services.

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292621 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 10:45 AM
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He doesn't know we were ever in credit card. There was no obvious sign of it. We never missed a payment for anything, didn't argue about money, etc.

Having been in cc debt myself in the past, I can say there is one obvious sign - he might not know his parents are in debt, but people raking up cc debt aren't practicing delayed gratification by saving up for things they want. He has seen you and your husband go out and buy the things you wanted when you wanted them (instead of saving up and talking about the day when you can buy something with the savings) - which is exactly what he's doing now, except he's using a debit card instead of a credit card.

IMO having a heart-to-heart with him about your cc debt might do him some good.

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Author: GuildWarsQueen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292622 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 10:53 AM
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I'm sure you mean well.

No, that poster doesn't mean well. It's yet another doppel of a frequent troll.

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Author: xraymd Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292623 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 10:55 AM
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Greetings, GuildWarsQueen, I can't help but be curious about who else is DocHollandaise in other guises; do you have any links? (I wouldn't have guessed doppel or troll but I may be out of touch.)

xraymd

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292624 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 11:02 AM
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No, that poster doesn't mean well. It's yet another doppel of a frequent troll.

I'm not sure. He was over on the Surviving Cancer board, and he seemed genuine then. Doppels and trolls don't usually discuss cancer scares.

Nancy

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292625 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 11:03 AM
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DocHollandaise,

I'm sure you mean well. But sneering and jeering at every single sentence isn't always helpful, and reading ahead might alter some of your comments, since she explained several matters you questioned.


I am absolutely certain this posted does not mean well. In fact, from the first time I saw this poster posting another board it was abundantly clear who this was posting and that this is just another in a strong of doppels.

Because I realize this, I'm not going to respond to that poster since anything said is simply grist for that particular mill and the goal appears to be to get people riled up.

As for my son and his situation, you were correct in another post that I really didn't come here seeking advice in this instance, this was basically a rant.

Because I wasn't seeking advice I didn't go into a lot of factual detail. For example, my son does have a part time job and had one summer before last as well.

The first time he overdrew the debit card we really thought he didn't understand how it worked (didn't realize that money wasn't deducted instantly and didn't realize about the fees). We thought it appropriate to take it from him for a period of time and give a second chance. When that didn't work out either, we took it from him permanently.

But, when he was 18 (being a legal adult), he opened his own checking account and the bank sent him a new debit card (which we have no liability for).

He told me that he was going to operate based upon cash and would not use a debit card. Until this recent thing happened that has how it has been for the last 3 months.

Anyway, guess my rant has been beat to death at this point.

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Author: xraymd Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292626 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 11:03 AM
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Greetings, Nancy, that was DocHathaway, so I have a feeling we have encountered DocHollandaise in other guises which I am planning to post about shortly then report to the Fool. Stay tuned...

xraymd

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Author: bthomas15 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292628 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 11:41 AM
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Remove all "strings." Cut the strings.

LOL. If you were my child, DocH, I would be more than happy to do this.

But in my world, I don't mind helping my kids as they stumble on the road to adulthood.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292629 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:05 PM
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Oh, he has a system alright - it's okay with him to pay the overdraft fees.

To find another system, the first thing that he has to do is to decide to control his spending. Until he decides that, no system or model is going to overcome his desire to spend money even when he doesn't have it.


If he doesn't have a debit card, then when the envelop runs dry, so does the spending.

But it's his choice to have a debit card. He's over 18, and he hasn't chosen to give the debit card up. Unless the bank forces him to give up the debit card, it's got to be his choice to give it up. That's what I mean by he has to decide that he wants to control his spending - until then, his current method works for him.

AJ

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292630 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:23 PM
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No, that poster doesn't mean well. It's yet another doppel of a frequent troll.

Ah, thank you. Doppel/Troll it is, then. Into the p=box with him.

Nancy

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Author: jeffbrig Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292631 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:25 PM
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To find another system, the first thing that he has to do is to decide to control his spending. Until he decides that, no system or model is going to overcome his desire to spend money even when he doesn't have it.

AJ is spot on (as usual) with this one. He needs to come to the conclusion that overdraft fees are dumb and a waste of his money. Right now he's not at that point. His behavior won't change until he recognizes this fact.

I suspect that between his job and his allowance, he's probably dealing with at least a few hundred dollars in discretionary spending each month. Clearly, he doesn't consider the fee a significant detriment to his cash flow, which I presume is pretty significant for someone his age (and may be fueling the blase attitude).

My recommendation: Collect copies of his bank statements going back to the start of the year, or 12 months if possible. Add up all of the dumb fees he's paid due to overdrafts (hopefully it's a meaningful amount relative to his monthly spending level). Then show him - "Look, you'd have an additional $350 in the bank today if it wasn't for the overdraft penalties you've paid this year". Maybe he'll still dismiss that as an "irrelevant" $1/day, but then again, seeing the total sum at once might help him understand he's frittered away perhaps a month's worth of money just by making a few bad decisions. Maybe paying attention to the balance is worth $350 to him.

I'd also recommend your son use online banking to view balances, rather than using the phone. A visual represenation of transactions makes it easier to see what recent transactions have and haven't yet posted to the account. I say this as someone who hasn't kept a check register in probably 10 years - but could tell you at any point my balance within $20. I'm more than happy to let the bank do the work for me, but I frequently look online to confirm purchases and checks clearing.

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Author: stardustangel Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292632 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:25 PM
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I don't know, maybe it's just me, but I think your son will probably be just fine. I think the financial lessons you are trying to instill in him will slowly seep inbto his brain. Just keep repeating them to him. Once he realizes that he is losing purchasing power by spending so much on overdraft fees, he will probably modify his behaviour. Once he gets an apt and lives on his own, he won't be able to afford to be so careless. He'll need that $35 he previously willingly handed over to the banks for food, gas, rent, etc. Perhaps a smaller allowance to speed up the lesson or maybe not.


The one concern I have is that so many overdraft fees may prompt a black mark on the credit report maintained by banks. Not sure what it is called, but banks have a " bank credit report" that they maintain. I was once denied a checking account from a bank because my "bank credit report" came back with a negative item. Long story short, but I overdrew an account because my bank account had been violated by theft. I was able to resolve it, but the bank placed a negative report on this "bank credit report." Those negative items stay on for five years. Thankfully I didn't truly need the second checking account. I just wanted to take advantage of a $100 incentive to open a new account.
The five years passed quickly and I've been fine since.

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Author: jeffbrig Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292633 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:29 PM
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But it's his choice to have a debit card. He's over 18, and he hasn't chosen to give the debit card up. Unless the bank forces him to give up the debit card, it's got to be his choice to give it up. That's what I mean by he has to decide that he wants to control his spending - until then, his current method works for him.

I don't know... as long as he's in high school and still living at home, mom and dad could easily lay out an "as long as you live under my roof" ultimatum, and essentially force him to hand over the card.

Not saying they should....but it's an option if it comes to that.

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292634 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:33 PM
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>> I don't know... as long as he's in high school and still living at home, mom and dad could easily lay out an "as long as you live under my roof" ultimatum, and essentially force him to hand over the card. <<

Heck, they could still use the "under my roof" argument even if he's 25 and a college graduate. Assuming he still is under their roof...

#29

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Author: legalwordwarrior Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292635 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:37 PM
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((((determinedmom))))

I understand where you're coming from and can only offer the experience that in a few years he will wise up considerably where money is concerned. It's taken DD#1 until age 25, but she's finally at a point where she understands that there is a limit to her funds and she must work within that limit.

One thing you might try is this: have your son go back over his statements from the past year and add up all the fees he has paid. Then take that amount and equate it to something he might want, like an ipod, computer game system or something. Maybe if he can see that he can't afford X because he paid more than it cost in overdraft fees he'll be able to see it as something tangible and not just "fees" that have no meaning. If he's lost over $200 in fees, that could have purchased quite a few games or a new Zune or who knows what else. He might even have been able to take the girlfriend to an even fancier restaurant without overdrawing the account.

LWW

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292636 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:46 PM
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I can say there is one obvious sign - he might not know his parents are in debt, but people raking up cc debt aren't practicing delayed gratification by saving up for things they want. He has seen you and your husband go out and buy the things you wanted when you wanted them (instead of saving up and talking about the day when you can buy something with the savings) - which is exactly what he's doing now, except he's using a debit card instead of a credit card.

Unless he knows how much they earn (and he wouldn't unless they showed him pay stubs and the annual bonus)) it probably wouldn't occur to him that they're running up debt. Both parents are high earners, I'm assuming that most of the kids around him have parents who are high earners. (Although I do understand that there is a huge difference of opinion regarding what a 'high earner" is).

My parents lived in a comfortable home, they had new cars when necessary, they traveled a lot, and enjoyed life. It would never occur to me, at the age of 18, that they might be spending more than they had. (Which they weren't; bills were always paid on time and in full, cars were bought when they could afford it, and much of the travel was business related and my father paid for my mother's fare).

But, no, I don't see why the kid would assume that the parents were careless about money.

Nancy

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292637 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 12:55 PM
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But it's his choice to have a debit card. He's over 18, and he hasn't chosen to give the debit card up. Unless the bank forces him to give up the debit card, it's got to be his choice to give it up. That's what I mean by he has to decide that he wants to control his spending - until then, his current method works for him.

From what I read, it seems 100% of the financing for the account comes from his allowance. Since he is over 18, the parents can't do anything about the card but they can do something about the allowance.

PSU

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292638 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 1:05 PM
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<<I don't know... as long as he's in high school and still living at home, mom and dad could easily lay out an "as long as you live under my roof" ultimatum, and essentially force him to hand over the card.

Not saying they should....but it's an option if it comes to that.
>>



Cutting the apron strings works both ways.

Frankly, I'd be inclined to let the guy work out his own problems and pay his own bills. If he pays fees to nthe bank for being stupid, tough.

More than likely he will wise up before long. And if he doesn't, getting mad about it wont change things.



Seattle Pioneer

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292639 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 1:06 PM
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My recommendation: Collect copies of his bank statements going back to the start of the year, or 12 months if possible. Add up all of the dumb fees he's paid due to overdrafts (hopefully it's a meaningful amount relative to his monthly spending level). Then show him - "Look, you'd have an additional $350 in the bank today if it wasn't for the overdraft penalties you've paid this year". Maybe he'll still dismiss that as an "irrelevant" $1/day, but then again, seeing the total sum at once might help him understand he's frittered away perhaps a month's worth of money just by making a few bad decisions. Maybe paying attention to the balance is worth $350 to him.

My earlier recommendation was to let him see the actual amount of money. Showing him $350 on a piece of paper might not have any effect. Getting $350 in $1 bills from the bank and placing it in front of him may have a better effect.

PSU

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292640 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 1:09 PM
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From what I read, it seems 100% of the financing for the account comes from his allowance. Since he is over 18, the parents can't do anything about the card but they can do something about the allowance

There's also a part-time job. And his allowance covers car expenses, clothes, lunch, and a few other things. If they take the allowance away, they'll probably have to cover at least some of the other costs he was paying. Here's the post:

http://boards.fool.com/Message.asp?mid=28038094

Nancy

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292641 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 1:12 PM
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From what I read, it seems 100% of the financing for the account comes from his allowance.

I see I should have read ahead. The son has a part-time job. Maybe the fees could be converted into hours of work based on his hourly wage. Show him he worked "x" number of hours where the bank benefited from the wages, not him.

PSU

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292642 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 1:20 PM
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I'd also recommend your son use online banking to view balances, rather than using the phone. A visual represenation of transactions makes it easier to see what recent transactions have and haven't yet posted to the account.

I have to chuckle a bit at this suggestion. My daughter used online banking to view balances extensively, and still got tripped up by unposted transactions (including overdraft fees that didn't post for two business days following the overdraft) and wishful thinking. Then she got hung up on the fact that the order the online system showed wouldn't have given her as many overdraft fees . . .

It doesn't matter what system DM's son uses. The overdrafts won't stop until it's important to *him* to make them stop. You or I would say, leave an untouchable $30 or $100 cushion there. My daughter's solution was to get rid of the account and go to all cash.

We won't know what DM's son's solution is until he perceives the need for a solution in the first place. As you said, "He needs to come to the conclusion that overdraft fees are dumb and a waste of his money." Before he comes to this conclusion, all interventions to fix the problem will fail.

Patzer

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292643 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 1:22 PM
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There's also a part-time job. And his allowance covers car expenses, clothes, lunch, and a few other things. If they take the allowance away, they'll probably have to cover at least some of the other costs he was paying.

Why would they have to cover those things if they take the allowance away? He's got a job, and at his age, there is nothing wrong with paying for the things she has listed, though if he is still in high school, I might opt for providing his clothes, but that's the only thing on the list that I would adjust.

My kids pay for everything on that list from their earnings except for clothing and school lunches which they didn't buy because they took lunch from home when they were in high school. Now that they are in college, they provide their own spending money and books. We do still buy their clothing, but I haven't given them an allowance once they each had a regular way to make money, even though it was always part time.

I don't think DM needs to give him an allowance just because the younger kids get one. He has a job, and he should use that money for his own expenses.

I do know and appreciate that it is hard to watch the kids waste money, but even if you are providing allowance, the money is theirs to do with as they please.

My own DS has trouble keeping track of his spending, so his solution is to be on a cash diet. At the beginning of the school year, he was overspending his budget, but he has recently made a change that seems to be working. Instead of taking out his weekly spending money on the weekend when he is tempted to spend it all and then needs more money during the week, he now takes it out on Monday. That way, by the time he reaches the weekend, he knows that he can spend whatever is left.

This is not my preferred way to budget, but the adjustment seems to be helping him to manage his money. He also has a credit card which he has been told is for emergencies or large expenditures for which he shouldn't be carrying around that much cash [like his books].

I think DM needs to find the method that resonates with her son. I really like the suggestion about taking all that money out in cash, and letting him see the pile go down with all that money going to bank fees instead of to 'stuff' that he could actually use. The visual might help. I had a friend who did something similar to teach her kids to budget, and she says it really opened their eyes.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292646 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 2:05 PM
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DocHollandaise:
Take that confrontational nonsense to one of the political boards, where nastiness is embraced and welcomed.

This board isn't for that kind of puerile crap.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292647 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 2:06 PM
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My kids pay for everything on that list from their earnings except for clothing and school lunches which they didn't buy because they took lunch from home when they were in high school. Now that they are in college, they provide their own spending money and books. We do still buy their clothing, but I haven't given them an allowance once they each had a regular way to make money, even though it was always part time.


We believe that a reasonable allowance is appropriate for kids through high school. For many years, the allowances were small amounts basically so they could buy small entertainment items and gifts.

As they got older, we wanted them to learn more about money management so we increased the allowance including what we were paying for clothes and school lunches. We basically took that and their regular allowance and added it up and divided by 12 and told them to manage it.

What we liked about this was that suddenly they now cared about what they spent for a pair of jeans. My daughter was all set to spend $49 for jeans at Limited Too when I pointed out she could spend $9 at Target. When we were paying for clothes, she wouldn't have care. Now that she is paying for clothes, she cares a lot.

My younger son has had to learn to budget...to balance his iPod purchases against the fact that he has to buy clothes but is now 15 and wants to buy clothes that look good (he bought the $50 shirt but got the jeans at Target).

So, overall, this has been a system that has really worked well for us.

I could tell my older son that we will give no allowance since he is old enough to have a part time job. However, we believe that school work is his first priority. We have no hesitancy in telling him that if he wants a part time job to give him more discretionary spending then he can, but only so long as his grades are adequate. Grades go down too much the job goes away.

However, I've also told him that once he is in college, just like your kids, he will need to cover his spending money and books.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292648 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 2:14 PM
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Unless he knows how much they earn (and he wouldn't unless they showed him pay stubs and the annual bonus)) it probably wouldn't occur to him that they're running up debt. Both parents are high earners, I'm assuming that most of the kids around him have parents who are high earners. (Although I do understand that there is a huge difference of opinion regarding what a 'high earner" is).

My parents lived in a comfortable home, they had new cars when necessary, they traveled a lot, and enjoyed life. It would never occur to me, at the age of 18, that they might be spending more than they had. (Which they weren't; bills were always paid on time and in full, cars were bought when they could afford it, and much of the travel was business related and my father paid for my mother's fare).

But, no, I don't see why the kid would assume that the parents were careless about money.



Exactly, Nancy. I don't show him my pay stubs or tell him our income. He does know that we have good jobs and are well paid as is typical in the area where we live.

When we were overspending it certainly resulted in us paying interest that I wish now we hadn't had to pay and most certainly resulted in us having less savings than I would now liked to have had.

However, I don't think there were overt signs of financial irresponsibility. We never paid anything late. We never had bill collectors hounding us. I never ever used a debit card or wrote a check if I didn't have the money in the account to cover it that moment. We never had overdrafts on our bank account.

There were things where we said we needed to save up for them. There were things that we said were too expensive.

Four years ago (this month!) we quit doing anything to increase our consumer debt. He didn't know we had consumer debt but certainly for the last 4 years we haven't added to it.

I don't think his carelessness is from our having consumer debt.

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Author: DocHollandaise Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292649 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 2:30 PM
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DocHollandaise:
Take that confrontational nonsense to one of the political boards, where nastiness is embraced and welcomed.

This board isn't for that kind of puerile crap.


Do you talk to your kids that way?

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292650 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 2:35 PM
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Unless he knows how much they earn (and he wouldn't unless they showed him pay stubs and the annual bonus)) it probably wouldn't occur to him that they're running up debt. Both parents are high earners, I'm assuming that most of the kids around him have parents who are high earners. (Although I do understand that there is a huge difference of opinion regarding what a 'high earner" is).

It doesn't matter if you're high income or low income, if you're taking on cc debt you're LAYM no matter what those means are.

But, no, I don't see why the kid would assume that the parents were careless about money.

I didn't say he would assume his parents were careless about money. What I said was he wouldn't be seeing a lot of delayed gratification because there's usually a lot of buying going on if you're taking on cc debt.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292651 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 3:27 PM
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What I said was he wouldn't be seeing a lot of delayed gratification because there's usually a lot of buying going on if you're taking on cc debt.


What it worth a lot of the "buying" that got us into debt was stuff that wasn't tangible. Things like therapeutic school for my other son, child care that resulted, evaluations and therapy and medical expenses only partially covered by insurance (these were often very high but not high enough to be deductible). During the time that we ran up the greatest credit card debt the vast majority of it was using credit for stuff that we could have paid cash for but for the above. That is not to say that we shouldn't have handled it all better. Truthfully, I can't say I'm sorry that I did the therapeutic school or the child care or the evaluations and therapy and medical expenses.

I do think that we could have cut our other expenses more so we didn't go into the debt we went into. In particular, we spent too much on vacations and some other areas and should have done more to spend less. But, even then things were eventually in a vicious circle. That is, at the worst of it our monthly interest charge was a huge, huge part of the budget. It was more than our house payment, a lot more. That wasn't "buying" that anyone could see but was still something he had to spend each month.

Shortly before I came here our actual monthly spending if you didn't include the interest being paid and the school and other expenses above was what it could have been had our income been 1/3 of what it really was.

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Author: FadeMe Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292652 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 4:17 PM
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Thanks DM for the rant and being so open. Alas we can all agree that there is no silver bullet to fix this nationwide problem. One reason this thread is so popular is that you are not alone. Not by a long shot. Sons and daughters of all ages are blowing it big time and the banks are loving it.

http://www.cbsnews.com/blogs/2009/08/10/business/econwatch/e...

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292653 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 4:20 PM
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I do think that we could have cut our other expenses more so we didn't go into the debt we went into.

BINGO - that's what your son did not see.

By the time one is in their late teens, they're kind of aware that things like medical care/child care/etc have costs, so if the same lifestyle is being maintained before you had these costs, the money is coming from somewhere. What he saw is the same lifestyle being maintained - he just didn't know if the money was coming from income/savings/debt. And he's doing the same thing now that he's seen - he's maintaining his lifestyle even when he doesn't have the cash in the bank.

My parents were very fiscally responsible but I still went into debt, and I think if they had been more open about their household budget I might have learned sooner how to live within my means. I think having a discussion with him over your household expenses and how you went into cc debt, and how you could've prevented going into cc debt had you cut back expenses might be beneficial to your son -- since right now all he's seen is the "lifestyle".

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Author: SRenaeP Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292654 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 4:26 PM
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BINGO - that's what your son did not see.

By the time one is in their late teens, they're kind of aware that things like medical care/child care/etc have costs, so if the same lifestyle is being maintained before you had these costs, the money is coming from somewhere. What he saw is the same lifestyle being maintained - he just didn't know if the money was coming from income/savings/debt. And he's doing the same thing now that he's seen - he's maintaining his lifestyle even when he doesn't have the cash in the bank.

My parents were very fiscally responsible but I still went into debt, and I think if they had been more open about their household budget I might have learned sooner how to live within my means. I think having a discussion with him over your household expenses and how you went into cc debt, and how you could've prevented going into cc debt had you cut back expenses might be beneficial to your son -- since right now all he's seen is the "lifestyle".


It's not always that cut and dried. My parents were quite open to me about the household budget from an early. They discussed living within your means and how and why not to go into cc debt. I got it. I totally understood. Yet, when I was a young adult, I still lived above my means and went into cc debt (only a few thousand, but debt nonetheless). The problem was I didn't WANT to live within my means. I was a college student with very little income and I wanted STUFF and didn't want to have to work through the school year to afford it. And quite frankly I didn't see it as a problem. I never missed a payment, always paid more than the minimum during the school year then would pay the whole thing off during the summer with my earnings. Like SP said earlier, some people learn the hard way.

-Steph

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Author: snippee Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292655 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 4:43 PM
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Maybe your son has a difficulty of waiting too.


Maybe? When DM wrote this about her son in the OP:

he took his date to homecoming dinner last weekend he paid with the debit card knowing that he didn't have enough in his checking or savings account to pay it. He figured the bank would pay it, charge him the overdraft fee, and then he would clear the deficit when he got paid today (6 days later). (Unfortunately, he was correct).

and then wrote this about herself:

I think I had difficulty with the idea of waiting for things and wanted what I wanted when I wanted it and figured the interest I paid was worth it to get it know.


the similarity nearly knocked me over. In the son's case, the overdraft fees are a form of interest that he doesn't mind paying.

I don't have much else to add (sorry) but i do wonder if DM can use this as common ground. Shoot, if he's as stubborn as she says, he may hear that he's being just like his mom (a fate worse than death to some teens) and switch gears immediately!

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292658 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 6:09 PM
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By the time one is in their late teens, they're kind of aware that things like medical care/child care/etc have costs, so if the same lifestyle is being maintained before you had these costs, the money is coming from somewhere. What he saw is the same lifestyle being maintained - he just didn't know if the money was coming from income/savings/debt. And he's doing the same thing now that he's seen - he's maintaining his lifestyle even when he doesn't have the cash in the bank.



He is in his late teens now. For the last few years we haven't been incurring any more debt and have been paying it down (we've paid off over $200,000 in the last 4 years). A lot of the initial getting into debt was in the first few years after he came to the United States when he was moving here from rural poverty across the world to U.S. culture. He didn't know anything about medical care or costs (doctors are not abundant in rural Asia). And, frankly, any middle class American lifestyle looked rich to him. His father had to place him and his sister for adoption in part because he couldn't afford a few dollars a month to send them to school. His mother gave birth to his sister at home and died at home with little medical care. He thought when he came to the U.S. at almost 9 years old that we would be rich, he would have everything he wanted, and he would never have to go to school (no that idea did not come from us....). He arrived here speaking no English and with virtually no understanding or knowledge of Western culture. I remember he had a math assignment soon after he got here that depended on one's concept of a circus. Even leaving aside the issue of not knowing English, he had no concept of the idea of a circus.

My daughter (who was 3 then) would save rice in her cheek when she ate so she would have food for later. It took a long time to show her that she wouldn't go hungry and she could swallow all of her food. There would be another meal.

So, many of the money issues here are complicated by all this history of poverty and extreme deprivation.

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Author: HavaTheFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292661 of 308428
Subject: Re: Debit card irresponsibility Date: 10/19/2009 9:31 PM
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Hey DM, I just wanted to say that I have read through the whole thread, and I think you're doing all that you can to make the situation as good as it can be at this point. People are stubborn (myself included) and sometimes the only way to learn something is to have it beat into your head time and again.

I understand why you posted your rant, and I'm sorry that some posters used it as an excuse to make personal attacks on you and your family. I had a little of that going on, on my own monster thread ;-), and can say from experience that it's not much fun.

((((((DM)))))))

Good luck,

Hava

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Author: llambe Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292706 of 308428
Subject: Re: Debit card irresponsibility Date: 10/20/2009 12:12 PM
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My DSS had very similar problems when he was in the 16/17/18 age range. Looking back it appears to me that it had a lot to do with when he got a part time job and was "rolling in the dough". It wasn't that much money in the overall scheme of things but he had very few expenses other than clothes (not important to him), lunch and gas. He chose to resolve the overlimit dilemma himself by asking the CU to stop allowing overdrafts.

At that time we had no CC debt - no debt at all other than mortgage debt - his father had no debt other than mortgage when I married him and we continued that through DSS's teen years (until we bought our "dream house" but that was after DSS moved out). So I don't buy into the thought that this happens because kids see you LAYM and so do it too.

A couple things I hope to do differently with DD - talk with her regularly about budgeting (however although I budgeted diligently it wasn't until I found YNAB that I "got" budgeting in a way that really helped my finances and that happened after DSS moved out). Talk a lot more about how important it is too save a big chunk of your money (EF style rather than the "save for college" we threw at him). And cut off the "you budget your own allowance" if she shows us she is not budgeting ala overdrafts etc (I really wish I had cut this off early - as it just added to his pool of money to blow rather than teaching him to budget as we hoped). Possibly cutting off allowance altogether if she is working.

I am overall a big proponent of allowance. At a younger age, DSS had the same reaction as DM describes. Pre- allowance he wanted everything, post allowance, when we could say "buy it with your own money" that all changed. And I believe that an 18 yo living at home going to high school is still a kid. A 16 yo living at home going to college should still receive an allowance. Only 18 AND done with high school is also done with allowance in our family.

However, I also see that having "lots" of money is a heady experience - so I'm still debating the advantages/disadvantages/choices once DD gets to that stage - of having a job with no real costs of living. I'm also aware that the choices we make might be just as wrong/useless as the choices we made for DSS though - although I hope I'll be able to "shift direction" more quickly this time around if needed.

Note: even previous to "budget it yourself" DSS had a clothing budget - a monetary limit for clothing - so if he spent it all on 1 pair of jeans than too bad for him, that was all he got. If he shopped wisely he could get more things. He just didn't get to keep track of the money himself at that younger age and didn't get to keep any excess - I did it for him and it all had to spent on clothes. That's what I wish I had gone back to - NOT you can buy whatever clothes you want.

LL

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Author: AlisonWonderland Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 292711 of 308428
Subject: Re: Debit card irresponsibility Date: 10/20/2009 12:27 PM
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However, I also see that having "lots" of money is a heady experience - so I'm still debating the advantages/disadvantages/choices once DD gets to that stage - of having a job with no real costs of living.

When my youngest started his first job, he was an independent contractor and no taxes were withheld. I told him I was taking one-third of his money for taxes (well, set aside till after we knew what his tax hit would be) and one-third for an IRA.

"You mean I only get one-third of my money?!?!?" Shocked, he was, just shocked.

"Welcome to the real world, sweetie!"

~~ Alison, mean old mom

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