It Doesn't Matter what You Make...

1

Charlie’s Plan

When I was growing up, my parents always had a saying around the house, and if you grew up in a neighborhood like mine, then you’re probably familiar with it too. The story typically played out something like this. Mom, I really want a pair of these new Air Jordans that just came out. They are awesome, super comfortable, and I’m pretty sure they will make me run faster and be able to jump higher. Mom would give me the look, that look every kid knows, and say, We can’t afford that. How did she even know we couldn’t afford them, she didn’t even know how much they were? I didn’t even make it to the part where I said the price. Well, it comes down to that there wasn’t much left in the budget at the end of the day when the bills and the food and the mortgage and the car got paid for, and whatever was left over was intended for savings.

My mom, if I could relate her to anyone else in the world and this might date my age, was the Michael Jordan of savings. The true GOAT, if there ever was one for saving. Now the GOAT, for those of you that don’t know, refers to greatest of all time. The acronym GOAT has been given to Michael Jordan who is credited as being the greatest basketball player of all time. To a thirteen-year-old kid this was ridiculous though. What do you mean we can’t afford it? You save, and we can’t afford a pair of Jordans? You see what Mom meant was the Jordans did not provide enough utility to the family as a whole to justify the cost-benefit that they entailed, but what she told me as a thirteen-year-old kid was We can’t afford them (in her broken Swedish accent). To her, they are shoes just like any other shoes, and the intrinsic value of shoes was not equal to that of Jordans. My mom’s budget for shoes was more of that of the concession stand employee’s sneakers and not that of a basketball legend that he wore on the court.

Now like any other red-blooded American kid, I couldn’t just accept the fact that my parents weren’t going to get me these new Jordans that I had to have, so what was I going to do? Here I am, a thirteen-year-old kid with a weekly allowance of $5 for the equivalent of probably ten hours’ worth of work around the house on a weekly basis. At that rate, I figured I should be able to save up enough money for my shoes in about six months when they will be old news. What thirteen-year-old kid in 1993 has $125 to buy Jordans? This was going to take some rethinking on my end to figure out a way to get my hands on these shoes. Waiting patiently for six months just wasn’t going to work for me, so I had to come up with another option. Mom, what can I do to get these shoes? I asked her, thinking in my head if I bug her enough, she might just break down and knowing from my thirteen years on this earth that it’s never going to happen, but hey, I’m thirteen, I’m going to try anyway.

What she told me didn’t seem like it was going to make a difference in my life, but these words she said have been repeated over and over in my head anytime that I’ve been in a tight situation from the day she said them. Like Socrates, these words could have been written on scrolls and passed down from generations as she looked me in the eyes and asked, Are your legs broken? Work. That simple statement had quite the impact on me that day moving forward. Now I’m sure some may think this was harsh, but the Bible teaches the same in a slightly more eloquent way.

A little sleep, a little slumber, a little folding of the hands to sleep so your poverty will come as a robber, and your scarcity as an armed man. A little sleep a little slumber a little folding of the hands and poverty will come on you like a thief. (Proverbs 6:10–11 WEB)

That pretty much summed up my mom’s perspective of finances and saving for the future or that rainy day. In no way was she going to allow a thief to drive her into scarcity, and in her eyes, the Jordans were that thief. Now for me, as a thirteen-year-old boy, the thought that I was going to be the next professional basketball player was just enough motivation to figure out how or what I was going to do to get those Jordans for my basketball career (mind you, I was four feet, eleven inches and ninety-five pounds), but I was pretty sure scouts from the NBA were going to start coming to our neighborhood park any day now, and I needed to be ready.

So how can I make some money? Well, I was already mowing our lawn as part of one of the twenty weekly tasks that I needed to do around the house, so I thought maybe someone else would pay me to do this. So I gassed up the mower, and I went to the neighbors. Now in my mind, I didn’t have a goal. I didn’t have a plan. I just needed to get some Jordans, so if I had to mow a couple lawns, then I could do that. The first neighbor I went to and asked looked at me a little funny but then asked, Do you have a weed eater and edger also?

I said, Sure, I just couldn’t push them all around with me. What he said after this I didn’t realize at that time but it would be a turning point in my mindset.

He said, Okay, kid, my lawn guy just quit. I’ll give you a shot. I was paying him $50 a month. I’ll give you $40 if you mow, edge, and weed-eat it every week for me. Like I said earlier, I didn’t have a plan or a goal, but I knew $40 a month was double what I was making for my allowance, and I could do it in about one and half hours per week.

I agreed and got started immediately. The whole time I was there mowing, I remember I felt like I won a war, like what David felt when he killed Goliath. So much so that as soon as I got done, I went to the next neighbor’s house and refined my pitch. Hey, mister, I just got done mowing Charlie’s house, and I wanted to see if you were interested in having your yard done. His yard guy quit, and I’m going to be mowing, edging, and weed-eating his lawn for $40 a month, which is $10 less per month than the last guy. I’ll do it every week for you, and you don’t have to pay me until the end of the month if you’re interested. Sure enough standing there again looking at a neighbor with a perplexed look on their face, they looked back at my scrawny little body, and I said, If you want to take a quick peek, I just finished Charlie’s lawn, and it looks pretty good. With those few sentences and the idea that Charlie dropped in my head with his initial offer, I was able to line up nine neighbors to mow their lawns. I was officially on my way with my goal now outlined and in sight. Jordans, here I come!

At the end of the first month, as I went door-to-door collecting my $40 from my neighbors, I looked back at how much time and effort and work it took me to make that $40, how many afternoons after school I had spent mowing lawns, and how much time on the weekends it had taken me to follow through with the commitment that I made to my neighbors. It had all paid off, and now I had more than enough money to get my Jordans.

When I got home that evening, I walked in the door to find my mom sitting at the kitchen table paying bills. She asked me to come in, and I sat with her as she paid bills and reconciled the checkbook, entering her transactions in what seemed like an endless pile of paperwork. The excitement I had could barely be contained as I begged her if we could please go to get my Jordans after school tomorrow. As my mom glanced up from her accounting, she nodded at me and said, Yes, of course, nice work. I have to go to the bank in the afternoon, so after that, we will go to the mall. The day had finally come, all the hard work and the sacrifice I had made leading up to this point was forgotten, and tomorrow was going to be the day.

At that moment, Mom said, By the way, I got you something, with all these lawns that you are mowing, I got you a register of your own so that you can track your payments and what you have made. As she slid that register across the table to me, she explained how the system worked. You enter the customer names, then the date they pay you, and then how much they paid. As a rule, I always save 20 percent for the future and rainy day fund.

What’s a rainy day fund? I asked.

A rainy day fund is an emergency fund just in case things come up in life that you didn’t plan for. Rainy day fund might be a new tire for your bike. You weren’t planning for it to break, but when it does, you have money available to fix it right away. Or if your bike gets stolen or damaged, then you have enough money to buy a new one. Savings is the money that you are setting aside so that you will always have money for the things that you want and need. This is for when, say, a customer decided they no longer need you to mow their lawn. This savings account can also be used to save for larger purchases later in life. When you have a savings and an emergency plan, you can plan ahead in life, and you can take out some of the potholes that will financially set you back. By planning ahead, you can start today planning for things later on in life. Like what, I asked? For example, you turn sixteen in three years, and then you can drive. You can start setting aside a portion of the money you make for a car.

A car, I think to myself, that’s amazing! I’m starting to understand this whole savings idea.

2

Banking

When we got to the bank, my mom introduced me to her banker. This is Rob. He’s decided to start his own business mowing lawns in the neighborhood and has earned some money that we would like to use to help him open an account.

"I’m Tom, and I’m the local banker here. It’s so nice to meet you, and it’s refreshing to see a young person interested in learning about banking at such a young age. I’d be happy to walk you through all the options that we have with different accounts and how they work. To break it down and make it as simple as possible, there are three different kinds of accounts that we have here at the bank. As you get into it, there are more details and options available with them, but these are what we focus on. Option one, which is the main type of account we offer, is a checking account. This account is used to hold your day-to-day money and give you access to it easily. With this account, you will have checks that you can write for purchases and a debit card for purchases [a debit card is a card issued by a bank allowing the holder to transfer money electronically to another bank account when making a purchase]. Or simply put, a debit card takes money from your checking account when used to make purchases. This is where you will put the majority of your money. Based on your register, we would put $288 into this account for you to start with. The second account that we would open is a savings account. This will cover the areas that your mom discussed with you. This will cover your savings, and it will cover your rainy day money. In this account, we will put in the other 20 percent of the money from your ledger, so your opening balance will be $72. In this account though, we will pay you interest on the money that you