The call for help came just a couple of weeks into the new school year, her first year away at college.
“Mom, you’ve got to run down to the bank and put more money in my account!”##M:[more]##
“Wait a minute, what? Can you say that again?”
“I need more money in my bank account. It says online that I’m over my limit by $34, and unless I get more money in there, they’re going to charge me a fine.”
My brain did some quick math. We had given her an allowance in her debit account that was supposed to take her through the entire month. We had also put money on her school debit card to take care of snacks and other incidentals. And we had paid for her books ourselves: $700 for the semester, of which $500 was paid by the Little Scholars scholarship she had won as a Wildcats cheerleader in the eighth grade. (Thank you, Pop Warner!) So according to my calculations, there was no way she could be overdrawn so early into the month. But she was.
I made a beeline for our bank and probably frightened everyone in there with the scowl on my face. (Sorry!) There are few things more intimidating than a suburban mom on the warpath, especially when it involves a teenage daughter and finances. The news was worse than she had revealed. She had used her debit four times while her account already was down to zero, and instead of one $35 fine, there were four, for a grand total of $140. The really irritating thing was that her purchases didn’t total much more than that, and in fact, one was for $7 at the local coffee shop, which meant that her breakfast actually ended up costing her $42. There was one purchase, however, for a designer key ring and ID card holder that had been made online.
I was livid on so many levels.
To my husband I wailed in despair: “How could she be so irresponsible??!! She’s a financial nightmare! We’ve raised a monster. We’ve failed as parents!” (I admit I can be a little over the top).
To my daughter, I yelled: “The first rule of financial management is that you can’t spend money you don’t have! How could you be so irresponsible??!! You’re a financial nightmare! We’ve failed you as parents!” (She understands that I can be overly dramatic sometimes).
To the bank, I accused: “How could you be so irresponsible? But then, it benefits you to have people who do this, doesn’t it, because each time someone overdraws her account, you make money! It’s good business, isn’t it?”
We immediately took steps to fix the problem, and then to make sure it didn’t happen again. First was the bailout. (Sound familiar?) We put money into her account to cover the bad debt and the fines. Then we put controls into place — a mechanism that would limit her debit purchases to $100 a day, and another that would not allow her to withdraw any cash she did not have.
I was surprised that these controls were not there already, nor had anyone warned me to activate them when we had opened the account. The bank told me you have to ask for them, but as I pointed out, you have to know you have to ask for them, and isn’t it the kind of thing most people would assume would come with the account anyway?
We also told our daughter that she was not to be making any more purchases online when she was supposed to be studying, and we also warned her not to whip out her debit card to pay for everybody at the table, collect the cash, and then spend it instead of putting it back into her account. We told her that was a little bit like double-dipping, a dangerous habit to form.
I am sharing our tale of financial woe as a heads up to other parents who might be headed down the path of financial ruin because of children with expensive habits. It is also ironic to me that our experience was a foreshadowing of the much larger financial crisis that is unfolding before us right now, and in a way, a mini-parallel to the bad habits that has our country in trouble.
As I told our daughter, the first rule of financial management is don’t spend money you don’t have. But we all do, don’t we, whether it is a company using credit to expand, or a family using a credit card to buy and enjoy now, pay later? Credit to some degree is okay, the most important criterion being the ability to pay it back. But when you spend beyond your means, eventually it all has to come tumbling down like a house of cards, and that’s what we are seeing all around us, whether it is the troubles of financial giants like Lehman Brothers and AIG, or individuals who have been brought to their knees.
The crashing economy has produced stories this past week that are heartbreaking: the unemployed financial services expert in Los Angeles who shot his wife, mother-in-law, and three sons to death (one, a UCLA honors student and Fulbright Scholar) before taking his own life; the 90-year-old woman who shot herself as sheriff’s deputies moved in to foreclose her home. I imagine this is what it must have been like on a more massive scale during the stock market crash of 1929. History does repeat itself; we can only hope that we can right this financial ship before we plunge into another Great Depression (I hope all the government protections put into place after that will prevent that from happening).
These are frightening times. A new poll says that a majority of Americans are worried about money, and even if you are not, chances are good that you know someone who is. I am grateful that our children are in school, and they are largely insulated from the punishing financial winds blowing the rest of us around. But I worry about the future we are leaving to them. I wonder if we can fix the major problems before they have to look for a job, qualify for a home loan, or put their own children through school. Whether it is a teenager out on her own for the first time, or a financial institution that is hundreds of years old: fiscal responsibility isn’t a choice, it’s a necessity.
