Not all ATMs are the same!

Wouldn’t it be great to be just about perfect? Well, not that I ever had any wacky illusions of that, but if anyone ever thought I was totally sound when it came to all money moves, a recent mistake would clearly disprove that.

We’ve all been there. You know, the times when we feel like a fool for making a dumb financial move.

Here’s what I did.  Two weeks ago, I was in a major hurry to get someplace in the evening. I was leaving the city, and was headed out of town. Thus, while I often like public transpiration instead of driving, I did have to drive that day and parked my car in an out of the way lot. This place cost $15 for an “earlybird” rate, as long as you got out by 6pm. It was a deal, compared to the garages in this area of Downtown Chicago which typically charge between $30 to $40 to park during the working day. Yes, it’s not cheap here in the Windy City!

Anyway, I rushed to the lot and asked to pay. The guy immediately told me “Cash only”, which was corroborated by a sign at the booth. Okay, I suppose I missed that sign in the morning when I got there.  So I had to tell him that I needed cash, and that I’d be right back after I found an ATM. He said fine, but I realized that I needed to rush back so that I wasn’t charged the full price.

I went a few blocks to a location I knew would have ATMs, and went to the first one I saw. It wasn’t for my bank, but at this point I didn’t care. I just needed to get the cash, get to the car, and leave.  So I withdrew money, and agreed when I saw the prompt on the screen that notified me that the bank would charge me a $3 fee in addition to whatever fee my bank charged.  I can’t stand ATM fees, but figured that this was a rare exception and that I didn’t have a choice in this situation anyway.

So, I withdrew the money, and turned to my left and started to walk away. As I did, I froze.

Right in front of me – literally, right there before me – was an ATM from my bank.

It instantly hit me that in my rush to just find the first ATM and get money right away, I never bothered to even glance around to notice the other ATM that was there.  After paying the 2 fees, I just wasted $6 right there. For no reason whatsoever, other than carelessness.  I mean, the no-fee machine from my own bank was basically right next to the other machine.

Now can you see how I felt like I made a dumb financial move? There is no rationalizing this away.

Well, when we make mistakes we should try to learn from them. Two quick takeaways for me were:

• Pay attention.  If I would have seen the sign in the morning that noted “cash only” , I might have been able to get the money ahead of time. By not having my head in the game at that time, I cost myself a few bucks.
• Manage time well.  If I would have planned my time better, even by a few minutes, I wouldn’t have been rushed and prone to making a careless move.

Of course we all know that we should pay attention and manage time well, but sometimes we need a reminder to do the basic things.  This was a $6 reminder!

My Questions for You

Have you ever made any really silly, dumb financial moves like this one?

What were the circumstances, and why did it happen?

Did you learn any applicable lessons from the experience?

When you think of debt, do you get warm and fuzzy thoughts? Didn’t think so. Do you think of debt as something that you’d like avoid or work toward eliminating? This latter viewpoint seems to be the prerogative of many folks in the personal finance blogosphere, at least based on what I’ve read in numerous articles over the last several years.

A recent short article on Moneyland caught my attention, as it discussed the notion that more young people are leery of debt these days. Instead of viewing debt with the same mindset that their parents did, many are making decisions that reflect a greater reluctance to take on debt than prior generations. For example, making decisions such as living at home with parents or renting instead of going out and buying a place.

My take on this: Bravo!

Now, it’s probably true that instead of absolute fear of debt, it’s better to look at it objectively and realistically. It can be really bad, but at times debt can be a tool for getting certain things done – as well as an emergency safety net, dealing with totally unforeseen medical expenses, etc. Also, if there was no money to borrow, the business world would come to a standstill. So admittedly, debt does have an important role in the big picture.

That being said, however, for the average person out there, most debt is simply not worth taking on. There is something to be said for aspiring to debt-free living.

Here are some different thoughts on types of debt and their legitimacy:

Bad Debt

What do many people borrow to buy? Often times, it’s for consumer goods purchases. Buying clothes, electronics, furnuiture, etc. With such purchases, if we can’t afford to pay it off in full as soon as the credit card bill is due, it shouldn’t be bought.  Carrying balances means that you shouldn’t have bought the thing in the first place.

What about cars? Are these worth taking out loans for? Well, probably not in my view. If somebody is solvent enough to have a decent emergency fund, then why not pay in full for a car? It doesn’t have to be a $25,000 new car if that’s not affordable. Why not get a functional $5,000 used car instead, if that’s what you can afford to buy in full.

I remember a guy I worked with over a decade ago who bought a brand new SUV despite being a few years out of college.  He said he needed to buy it because he needed to feel like he “arrived”.  Smart guy, otherwise.  I’ve kept in touch with him, and he’s totally got his head on straight now. But back then, he made a decision that showed too much comfort with debt.

Borderline Debt

It’s safe to say that most home buyers, particularly first time buyers anyway, take on a mortgage. It’s just the way things are done. However, no matter what anybody says about tax deductions, the pride of home ownership, or things of the like - a mortgage is still debt. If you live in a dream home and finance it with a large mortgage, you will be working many hours and possibly years to pay for it. Sometimes it can be helpful to think about how time is money, and determine exactly how much we have to work to finance such dreams.

It seems to make sense that one should ideally buy something that fits legitimate needs in terms of space, location, schools, etc. Some debt is realistic in this case, but should be manageable with the goal of paying it off sooner than later. Trading up for a McMansion, luxury condo, etc – not sure about that if it requires extra financing versus what’s truly needed.

“Investment” Debt – To a Point, Anyway

Now, not all debt is bad of course. When people start questioning if college is worth it, I think that’s going way, way too far. It’s worth it, necessary, and needs to happen for most younger folks if possible. Such debt should still be minimized though, and choices can be strategically made to pick the right college based on quality and value. Then, this debt can be considered to be an investment in one’s future.

My thought is that burdening somebody with tons of debt to start out life is not ideal. But, since college is absolutely necessary for most people, why not view the choice of which college to attend as a strategic investment? You know, one that requires an analysis of costs and expected/potential returns.  Perhaps it’s a matter of financial literacy, reframing the college decision, or thinking more pragmatically than emotionally.

My Questions For You:

Do you see as I do, that most debt is truly bad and unnecessary, other than a few of the specific examples I noted above (medical, limited home, smart college choice)?

Do you think that this recent aversion of debt by young adults is a good thing for our society as a whole? Or, is it irrational and has it gone too far?

The big interview

When looking for a new job, it’s important to do certain things. For example: network, optimize your resume, and keep your references informed – just to name a few steps.  It also might be important for a job seeker to keep his or her credit report looking clean, and reflective of a responsible person. This because a person’s credit report might be reviewed by potential employers.

Of course, there are myriad other reasons why one would want to keep a good credit record. Particularly, the behaviors that result in a positive looking credit report are ones that probably help us live responsibly, survive, and even thrive.  Interestingly though, based on what I read in an article on Kiplinger, a notable percentage of employers actually check credit reports.

Apparently they don’t have access to credit scores. That being said, according to the article, about 13% of employers do actually check credit reports. However, when you narrow down the list to selected positions, this percentage increases to 47%. Persons to whom this might apply to are higher level employees, those dealing with finances, confidential information, etc.

Now, I agree the notion that you simply can’t say no if you’re asked to let them get your report and review it. There is something to be said when it comes to protecting one’s private information, but when dealing with a prospective employer in which you have an interest, you have to play by its terms for the most part. What other choice do you have, other than choose to seek a job elsewhere?

It’s noted that it’s a low level criteria considered by employers, but if it wasn’t important, it wouldn’t be considered at all.  One could surmise that there could be an expectation that an candidate is responsible with personal finance affairs.

I had two immediate takeaways from this:

1) It’s yet another reason to keep good credit. Obviously the actions leading to a good report are important for other reasons, as alluded to above. But this adds an extra layer of importance. Also, it seems like another reason to check your credit report to make sure it looks right.

2) Perceptions are often reality for job seekers.  This is a bigger topic that can apply to any employee, customer, business partner, or other stakeholder. It seems like there are so many perceptions that be drawn, and many of them are actually quite dubious. That being said, it’s simply something to consider, for better or worse. We’ve talked here about how there are some email addresses that are considered uncool to certain employers, and how that impacts perceptions. Also, how some data shows that people with certain email addresses are more likely to have better credit scores than others. Obviously the email doesn’t cause this, but it’s a profile variable.  Anyway, bottom line this that perceptions can matter – and this is yet one more example of this.

Frankly, this makes some sense if you think about it. If you were to hire someone for a position of certain importance, wouldn’t you want to make sure that the individual is responsible? If they’re (seemingly) reckless with their own money, how will they treat an employer’s business?

My Questions for You

1. Have you ever been asked to allow a potential employer to view your credit report?
2. What are your thoughts on the two takeaways above (and on this concept in general)? Feel free to elaborate.
3. Do you think that perceptions matter, even if not entirely fair?

Be patient, my friend

Many of us get so fired up to achieve our goals, that we can get a little bit impatient sometimes when things don’t happen right away. With information and applications at our fingertips more and more each day it seems, the bar has been raised in terms of expectations of instant results.

Nevertheless, it’s sometimes good to sit back and let things take their course. Not by being lazy, of course. Being passive and delaying an outcome by indifference isn’t a winning solution.  Rather, putting a plan in place and executing it sometimes requires patience for success to ensue. In these cases, it can be better for the result as well as your stress levels to just resist the temptation to change directions or try new things, and just let things play out.

I mention this because I’ve had a certain goal in mind of late that I’ve been getting a bit impatient to achieve. It’s been gnawing at me a bit, and I feel like I’m not seeing the traction I want to see as of yet. It gets annoying sometimes when things don’t go according to your plans for success right away.

But as I’ve had these thoughts, I remind myself of a totally different goal I had some years ago, and how things at first seemed to be failing – but turned out to be successful. I just had to be patient and let things play out.

Here’s what happened. Some years ago, I was trying to sell a condo, and had purchased another place that was a little bit bigger out in the suburbs. The condo I was selling was kept in absolutely great shape – it looked just like new according to people who saw it, and was situated in a popular area for young adults. I worked with my realtor on doing all the research and due diligence, and felt that it was priced, staged, and marketed well. Keep in mind this was during a better real estate market.

Anyway, after the condo went on sale, I couldn’t wait for an offer to come in. I felt that I’d make a little money on the place, and given the market activity at that time, I thought it would happen within the first 2 weeks. This was typical at that time.

Well, the first few weeks went by with some showings, but no offers occurred. No sweat, I thought. Maybe by the end of the first month, something would happen.

Nothing happened in that first month. No offers.

As the second month went on, there was a decline in showings.  By the end of that month, I was getting antsy. I had plans to move out to the suburbs, and assumed that this place would be sold in time for that to happen. I felt that based on the market situation, our pricing, staging, and marketing plan – we would have been achieved success. However, this hadn’t happened and things were dragging along.  At the time, I started to question everything, and considered dropping the price and even potentially looking for another agent.

Then, just as the 2nd month ended, I got a call from the agent. Good news – we got an offer! Even better, we got two offers!

As it turned out, two people made separate offers on the same exact day. They both really liked the place, and actually ended up bidding full price for it. So what did we do? We then went back to them and told them the situation, and asked them to submit their best higher offer. In other words, we had a 2-party bidding war!

The net result of all of this is that I ended up selling the place, and even got a little bit more than I asked for.

Had I let my worry and impatience get the best of me, I might have lowered the price or gotten another realtor. That could have resulted in less money for me, and delayed things further. But I stayed the course, followed the plan, and it worked out to be the success for which I planned. It’s not like big money was made, but it was still a small profit that wouldn’t haven’t been there had I changed plans.

My lesson: Sometimes it’s best to be patient, keep doing things according to plan, and your efforts can totally pay off.

Now to be fair, there’s something to be said for being flexible and changing plans when needed. I do think that we can’t be rigid or static in our thinking. Plus, it’s important to recognize sunk costs and be able to act based on the present and future.

However, it depends on the situation. Sometimes we should make changes, other times we have to have belief in our plans and efforts, and stay patient. Good things can happen, and sometimes patience is a virtue with money. It could be selling a home, or it could be landing a job, getting customers for your business, getting published, or even accumulating assets for a financial goal. Whatever the case is, just keeping at it can be the right move sometimes.

My Question for You

Have you ever had a time where you just kept at it, stayed the course, and reached a goal that was money related? Or, even non-money related?

Do you find that patience is a virtue sometimes?

If you’re like many of us, and impatient to reach goals sometimes, how do you manage this?

Financial Diet: Spending Until 80% Full

Fitness has been one of my goals for this year (as it probably is for many people, in a lot of years), but this time I’ve put forth more effort into it. Aside from the most important part – taking action – I’ve done a little more reading on ways to improve health.

Of course, as I say here periodically, health and money are interrelated. Improve one, and you can help the other.  Now in this case, I thought I’d actually do something a bit different. Here,  I thought of applying a health-related principle to money. That concept: Hara Hachi Bu.

From what I’ve learned, Hara Hachi Bu is an Okinawan approach to regulating eating. The idea is that one should eat until reaching the point of being 80% full. The result? People eat less, don’t gain unnecessary weight, and have better health. It’s been said that Okinawa has an exceptionally high percentage of centenarians compared to the rest of the world. Eating fewer calories, when paired with an active lifestyle, might really help longevity and the ability to live a healthy life to 100.

It got me thinking – why not apply the 80% concept to our spending?

If calorie restriction and eating until 80% full might play a role in longevity, maybe spending 80% of what we think we need can play a role in longevity of our savings as well. If we spend less, we can increase our income minus expense gap. This increased savings, with time, proper investing, and the power of compounding, can result in a substantially increased net worth and financial security. This extended life of our savings can help us live a higher quality of life for a longer period of time.

Now, I don’t think this is just a matter of taking a high level of spending and bringing it down by 20%. Rather, I’m talking about taking what would be a reasonable budget made by financially responsible people, and living on 80% of it.

This could entail spending (and living on) less as follows:

• Housing – moving to a less expensive area or living in a smaller home
• Cars – driving an older used car, or for a family getting rid of a second car
• Food – cutting out dining outside, and going the extra mile to make frugal dining choices

It’s almost like thinking about what you need to live comfortably, and then spending at 80% of that level. Maybe we can get used to that, just like the body gets used to living on less calories when stopping at 80% full.

Update: Just so everyone knows what I mean by 80%, I’m referring to 80% of current expenses. I’m not referring to spending 80% of income and saving 20%. Rather, I mean take whatever your expense level is and multiply it by 0.8. For example, if a family earns $100,000 and spends $80,000, they’re saving $20,000. By applying this Hara Hachi Bu concept, the family would take the $80,000 expenses, multiply by 80%, and spend the resulting amount instead: $64,000. In this case, savings as a percentage of incomes goes up from 20% to 36%!

My Questions for You

What do you think of the idea of living on 80% of an otherwise reasonable expense level?

Do you think that doing this could extend the life of your savings and substantially grow your net worth?

Much like the Hara Hachi Bu rule, do you think that this approach is one that would require a higher level of discipline than many of us are accustomed to?

Review Your Credit Card Statement!

Do you carefully check your credit card statements, and review the transactions? It can help ensure that you’re not being charged unnecessarily for any ”phantom” transactions, unauthorized purchases, or mistakes.  I had an experience recently that serves as another example of why we take the time to at least scan through our statements each month.

First off, I make it a practice to pay off any bills in full each month. I don’t like to carry credit card balances, and simply don’t do that. Rather, I pay it all in full and on time each month. So, when reviewing a credit card bill, I typically don’t think of there being any issues in those areas. I’m usually focusing on transactions instead.

A recent review of a statement showed that all the transactions seemed fine, but something else jumped out at me: an interest charge! Impossible, right? After all, I pay may bills on time and in full, so there should be no problems.

Immediately, I called the credit card company. After describing the situation, and asking why it happened, it turns out that my last payment had been received late. Now, that’s not something I wanted to hear, since you just don’t want to be paying bills late.  There must have been some kind of mistake on their part!

Well, after they described the situation, I froze for a second and realized that I had been busy the month before and my payment was made close to the deadline. I normally don’t do that, but it was just one of those things. However, I pay bills online and the payment date was supposed to be right at the deadline date. Apparently, it must have hit right after that so thus the late fee.

Ouch.  Obviously, if you read this blog, you know that this is NOT something I would be happy about. Being someone that takes pride in financial responsibility, I didn’t like that this happened.

I explained the situation to the person on the phone, and stated that I pay my bills on time in full every month, and that was the reason I was surprised and called. The guy on the line then said he would make sure that the fees were reversed and charges removed. Great!

After getting charges reversed, I felt some satisfaction in knowing that reviewing a credit card statement saved money. Of course, I also learned a lesson that even people who are responsible can slip and make a mistake by procrastinating. Best to pay bills well ahead of the deadline, to avoid any situations like this where you have to call. Separately, one might also consider looking for a cheap credit card. Minimizing credit card expenses is a good thing.

Finally a big thing I learned from the experience is that building up a stellar track record of paying in full on time can build goodwill.

My Questions for You

Do you review your credit card statements each month?

Have you ever found any surprise charges on there? If so, how did you handle the situation?

What is your process for making the payments each month?

Most coupons provide opportunities to save money, and many provide nice little opportunities to save on things you need. Sure, you might be also enticed to spend money on something you might not otherwise buy. That’s a downside, to be sure. But at least you’re getting something of value back when you purchase most merchandise.

Well, I came across a different kind of coupon some weeks back: lottery coupons. These friendly, fun little coupons found their way to my mailbox somehow, along with the opportunity to save some money on certain purchases.  Such as, buy one get one free on various purchaes.

Only thing is, these “purchases” are lottery tickets. You know, the type where you get a set of numbers, and if that highly unlikely combination of numbers is selected, you might win big bucks. And you know, the type that are also not likely to make you a positive return on your investment.

So with these coupons, you get an opportunity to save money on a miniscule chance to make money.  This doesn’t seem like my type of deal. Why not take that same money and save it? Even in a low interest bank account, it will still have a higher expected return than a lottery. How about putting the money in the market? That will also have a higher expected value, right? One can spend time looking for other ways to save money. Finding good credit card deals might be one example of a better use of time. Or, trying to find other ways to save or make money.

Now look, I’m all about having a little fun – so there’s no harm in spending a dollar on a ticket, right? I say that even though I personally don’t buy these things. Again, for the reasons above – throwing away money and getting little or nothing back. When one thinks of how to invest in 2012, lottery tickets don’t exactly come to mind. But even though a dollar or two here and there isn’t a huge deal, it’s the idea that something like this could get people excited is what gets me shaking my head. I mean, you know that there were people who saw these buy one get one free coupons and just got totally excited about them. For some reason, lottery tickets have a magical effect on some people. Like I’ve said before, caveat emptor on opportunities to get something for next to nothing!

So in case it’s not clear, I will not be using these coupons for lottery tickets:)

It’s fun to think about what we would do if we won the lottery, but I guess it only matters if you actually play, right? You don’t have a chance to win unless you play! Not that you have much of a chance even if you do play, though.

Alright, you get what I think of this. Maybe I’m too rigid about this, what do you think?

My Questions for You

Do you ever play the lottery?

What do you think about playing such games vs other ways to make money?

Do you see this my way, that these coupons are a bit ridiculous?

Four days have passed, and no money has been spent.

As I write this, the day before publication, I have started the new year by spending no money in the first 4 days of the year. Zero, zilch, nada. Absolutely nothing. Hooray! Of course I’ll inevitably spend on different things soon, but my resolution to spend less money on discretionary items has started out the way I wanted it to. It’s always nice to get some early momentum on working toward a goal, no matter what it happens to be!

Really, what I’m trying to do is lower expenses in order to help efforts to grow net worth. Now, I generally think that most of us should spend more of our time and energy on the income growth side of things, and maybe even investing a bit of time in risk management. So, let’s not get carried away or become stingy. Dwelling on saving money can only get us so far. After all, as I say periodically here, we do need to make money before we can save money, right?

With that in mind, rather than going too far by getting obsessed with expense-lowering strategies, I’m trying to make it a habit to very quickly assess whether or not to I need to make a particular purchase at any point in time.  This expense assessment strategy basically involves asking the following questions when I’m making a purchase.

1. Do I need this? Yep, the old wants versus needs question comes back again! However, just because something is a want, it doesn’t mean it can’t be purchased. Life would be too boring if we only did what we need to do and ignored what we would really want to do.  However, needs are just that – needs – while wants can be addressed sometimes when the time is right.  So aside from exceptions, if it’s not needed, question whether or not it will be purchased.
2. Is there a lower cost option easily available?  OK, so we’ve very quickly decided “Yes” to question #1. We need to make the purchase, whether it’s food, clothing, gas, or whatever. But can we spend less? For example: if you’re at work, you’ll typically take some time in the middle of the day to eat lunch. Maybe that means going to the company cafeteria, or running out to pick up a sandwich or salad. Sure, you could do that, but what about bringing something from home? You could save some money that way if it doesn’t take much extra time to prepare and pack a lunch. Even a few dollars a day can add up to a lot annually.

It’s a very simple, yet very effective concept. Do you need it, and if so – could you get it for less elsewhere, without spending much extra time. Keeping it simple allows us to avoid overanalyze saving money, and think about other things too:)

My Questions for You

Do you ever stop yourself when making purchases, to decide whether or not you need to spend?

What approaches do you use to make sure you’re spending your money wisely?

With December upon us, I thought this would be a good time to look back at November, and take a look forward to 2012 as well.  With the former, I’m referring to – well, acknowledging the top referrers to Squirrelers from the prior month, as well as making some other acknowledgments. With the latter, I’m talking about looking at 2012 money resolutions and taking them for a test drive early – as in now!

Getting a Running Start on New Year’s Resolutions

Recently, I started to give some thoughts to 2012 resolutions, within the personal finance realm and otherwise. Those goals will be in place for January, so the New Year can be started with a clean slate and new aspirations. Not sure how you see it, but New Year’s goals can help provide extra motivation and more importantly some clarity and something to shoot for.

Anyway, I was thinking about it, and it occurred to me: as we think of resolutions for 2012, why wait until January 1 to start?

Calendar dates dictate so much of what we do, but why do they have to control behavior change? If we have specific things we’re working toward, we might has well get a running start on them. It’s like a car that can’t go from 0 to 60 mph instantly, but can get to that speed in less time if it’s already moving.

For example, if you know that you’d like to spend less money on eating at restaurants (yeah, that’s me), why not just do it in December? No need to wait until January 1st. Same applies to other personal finance goals, be it spending less money, increasing income, working less, increasing financial knowledge, or whatever the case may be.

I still do like the concept of New Year’s goals, as they’re clearly delineated, traditional, and do provide that clarity of purpose that I mentioned earlier. But it certainly couldn’t hurt to get started now. Not that I want to cut out those meals from my favorite places, but hey – might as well jump in now, right? There’s no time better than the present.

Top Referrers in November

The following were the sites that referred the most visitors to Squirrelers last month. I’ll call these 12 the “lucky dozen” – as in, lucky for Squirrelers:) Special thanks goes out to these folks:

1. Interest.co.nz
2. Free Money Finance
3. Yakezie
4. So Over Debt
5. Len Penzo.com
6. Retire by 40
7. 101 Centavos
8. Totally Money
9. Wisebread
10. Budgeting in the Fun Stuff
11. The Dog Ate My Wallet
12. Everyday Tips and Thoughts
13. Hope to Prosper

Squirrelers in Blog Carnivals

Squirrelers was in the following blog carnivals in November (including 3 Editor’s Picks!):

Loss Leader Pricing Strategies: At the Pumpkin Patch? was included in the Yakezie Carnival at One Cent at a Time

Sleep or Money? was included in the Carnival of Personal Finance at Barbara Friedberg Personal Finance

Asking for A Discount Can be Fun! was selected as an Editor’s Pick in the Festival of Frugality at Afford Anything

Any Easy Way to Save Money and Work Less was selected as an Editor’s Pick in the Totally Money Blog Carnival

Historical Pattern: Stock Prices Increase on the First Day of the Month was included in the Carnival of Personal Finance at Retire By 40

My Starbucks Customer Service Experience: Loopholes and Deals are Fun! was included in the Festival of Frugality at My Dollar Plan

Squirreling Gone Wild #30: The Elusive Bonus was included in the Yakezie Carnival at The Saved Quarter

College or Entrepreneurship? was selected as an Editor’s Pick in the Totally Money Blog Carnival at Retire by 40

8 Benefits of Using Credit Cards – For Those With Discipline was included in the Carnival of Personal Finance at Compounding Returns

Yogurt, Differentation, and Personal Branding?Yes! was included in the Totally Money Blog Carnival at The Saved Quarter

Consider Emotions vs. Logic When Buying a Home was included in the Carnival of Wealth at Control Your Cash

Inhertiances and Blended Families: Who’s the Priority? was included in the Carnival of Personal Finance at My Personal Finance Journey

Every parent – particular those who adhered to principles of frugality, delayed gratification and all-around squirreling behaviors – would like to see smart money management skills in their children. These skills might be evident (or not) in the teenage years, but generally become noticeable in their 20s, within a year or two of graduating from college.

But the current economic conditions are throwing off a lot of expectations. First, we know that 85 percent of recent college grads are living at home with their parents. This could be interpreted as frugal behavior. But in reality it’s a matter of poor employment opportunities coupled with high student loan repayment schedules. It’s pretty hard to repay on those loans when you’re working for $20,000 or $30,000 per year.

Second, among those adult children working in their first jobs, savings are just about nil. And because so few of them have credit cards – which are a lot harder to qualify for today than before – having a source of emergency cash to cover insurance deductibles or car repairs is a very real concern.

Do you want them coming to you for cash when they need it? At what point do you definitively cut the cord?

One source of loans for anyone with any form of job is paycheck cash advances . Also known as faxless payday loans, these types of loans have faced much scrutiny in recent years, much of it critical. But as an option, it teaches the borrower a few things:

A sense of independence – Borrowers learn they can manage the situation with their own financial solution. There may be other occasions to do some similar financial two-stepping later life, yes?

Stay true to obligations – When your child is able to cover a medical or car mechanic bill, or simply pay rent or insurance premiums, because they are taking out a paycheck cash advance, they are honoring their commitments.

Learn tradeoffs – If the interest charges on faxless payday loans make them uncomfortable, fine. That is a lesson in how managing (or failing to manage) money comes with a benefit or cost.

After all, money management is complicated. We – and our children – can learn through experience.