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When I was a kid my dad gave me a job stripping aluminum from a load of heater coils; copper tubing wrapped in aluminum coils.  He had bought a trailer load of it as scrap metal.  The metals as scrap were worth much more separately than combined so it was worth quite a bit to him to have us separate the two.  He paid me $5/hour and I put in 4 hours before I couldn’t take it anymore.

I don’t remember what I spent the money on but I spent it.

Did I learn anything about money? It think I learned that spending it is fun. That’s about it.

In high school I got a job at Marie Calendar’s as a cook.  Over the course of 2 years I made several thousand dollars and the only thing I could show for it was a bunch of concert t-shirts, a black guitar (still have it), and a 1981 Ford Fiesta.  Again I learned that spending money can be fun but I honestly have no idea where 90% of it went.

Not until I was in my mid 20s did I realize that I had done it all wrong.  I started thinking about business.  I started reading business books.  I learned a lot about investing in the stock market.  I joined a small group of freelance developers in our first business venture, a development shop.  I sold lots of random things on Ebay.  I designed project after project and even got a few of them started.  I even got serious and founded my own SEO company.  Finally I learned that making money can be more fun than spending it.

I have determined that even though I don’t want my kids to learn it the hard way like I did, that’s the best way to learn it.  So I have given my kids jobs and learning opportunities so that they can learn for themselves how to deal with money. And how to make money.  I also try to give them really bad mistakes to make.

Like a few weeks ago, my daughter wanted to buy a pack of gum. You can get them at Smiths for $.79.  She saw it for $1.09 at Walmart and thought she just had to have it.  But she didn’t have any money with her so I offered to buy it and sell it to her for $2.00 when we got home.

My son is a little older and has had more exposure to earning and spending.  He waited until a little later and had me buy him a big pack of 12 from Costco.  I think his cost him about $.67 per pack.

I have learned some lessons that cost me a few thousand dollars here and there but I know people that have spent 10 and 20 times what I did to learn the same lessons.  I am just hoping I can help my kids learn those same lessons for 10 to 20 times less than what it cost me.

So far it seems to be working.  My daughter has decided that she wants to buy a gumball machine and is currently looking for a store that will let her put it there.

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• How To Raise Financially Responsible Children (forbes.com)
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So it seems that just about every article in the news is about or related to the current economy and dismal state of things. Who am I to stay off the band wagon?

So I’d like to just point out my views on who is to blame and what we can do to avoid worsening and/or repeating things. First my blame list:

1 Walmart. Those who know me know that I hate Walmart. The thing they have done that is hurting us can be seen in our current trade deficit. Levi’s wanted to place their jeans in Walmart. Walmart told them in essence “No. Not until you have closed your current manufacturing plants and moved them to cheaper markets”. Now some argue that this makes sense, but it doesn’t help our economy does it. Victims: Rubbermaid, Vlasic, Levi’s, the list goes on and on and on and on.

2. Stupid Consumers. This one goes without saying. When you are trying SOOO hard to out do your neighbors with your shiny new boat, truck (that you don’t need), ATV’s, motorcycle, SUV, BMW, and landscaping you didn’t stop to figure out if you could really afford it, did you? No, you didn’t. For the last 30 years or so we’ve been leaning towards this attitude that “the world owes me this” and we justify without consulting the books. Instead, we consult people who stand to profit from our ignorance. “Hey, the salesman looked at my debt to income ratio and told me this is what I should be spending on a car”. Yes, I have actually heard that one almost word for word.

3. Credit Card Companies. For years the credit industry has successfully lobbied to get laws passed where they are not held to the same rules as banks regarding your money. They have the ability to change a contract that you signed without your approval. At any time, for any reason. And then they urge consumers to keep the maximum balance on those accounts. What did they think would happen?

4. Jimmy Carter and Affirmative Action. Now you may be saying, “What the crap does that have to do with it?” I have always felt that affirmative action was not the most thought out solution to anything. “But could it really help ruin the economy? Think of it in terms of equal housing lending. Prior to the 1970′s, banks gave loans based on whether or not you could pay it back. They changed the rules when they gave banks breaks for giving loans to people based on race. Think about that for a second. Just because you’re black, red, yellow, brown, slightly blueish, whatever the color, if you have a non-white color, we can give you a loan that the accountants would normally deny. It doesn’t take a statistician to see where this can start to mess things up.

5. Mortgage Lenders. There are cases where someone gets income only a few times a year. So they invented these interest only loans. Perfect for the right people. Put in the wrong hands, it’s a financial nightmare. The lenders knew that if you let the wrong people into these mortgages, it would come back to bite them but they were more concerned with getting the fees and selling off the mortgage, hoping that they could get rid of the mortgages fast enough.

6. Mortgage Brokers. Now who gets the wrong people into the wrong loans? It’s the brokers. They knew what they were doing. I have a neighbor who is in an interest only $300K mortgage on a teachers salary. Of course they can’t refinance now, and what’s going to happen when they have to start paying the principal? They don’t have any options now. Thanks mortgage broker.

7. Real Estate Investors. For the last decade, real estate has been touted as the perfect investment vehicle. Signs everywhere. Like when Amway came out. Everyone had an angle on the market. But what happens when you get more real estate investors than home buyers?
Seriously, DID NO ONE STOP TO ASK THESE QUESTIONS?!?!

8. Big Oil Companies. Now everyone knows that with the prices of oil rising, the price of gas must also rise. But not so disproportionately like it has. Ok, so I think that’s fine for people to change their prices. That’s just capitalism. But when your price effects the price of just about every other good bought and sold on the market, it must be done with more prudence than has been demonstrated by the gas companies. I’m not usually in favor of regulation but when your kids have proven that they aren’t grown up enough to cross the street alone, you have to do some hand holding. Curse you big oil.

So what to do about it:

1. Use Cash. It helps you be more conscious of what you spend on personal things

2. Spend less than you earn. How many times have we heard that and said “Well Duh”? We must need to keep hearing it cause I hear it all the time.

3. Drive a used car. What’s the point of having a car that was made this year? Really.

4. Live if a house that fits your needs AND BUDGET. If you don’t know your budget, please move to China.

5. Buy American. No really. look for the little Made In **** Label. Avoid Places with whom we have a trade deficit (CHINA)

6. Don’t take advice from ANYONE who is going to receive money because of your actions. Real estate agents, car salesmen, insurance brokers, maybe even waiters. K, I actually listen to my waiters quite a bit, that one might be going too far but you get the point.

7. Invest in small business. Maybe by buying at small business, maybe by referring them to friends, maybe by actually investing money with them. Small business is who finances this country. Jobs, taxes. Their money stays here for the most part. That means it makes our economy more healthy.

8. Drive less. Telecommute. Carpool. Ride a bike. Buy local goods (things that haven’t been transported very far). Build an EV.

9. Don’t do stupid things to try to get ahead. Almost everything on my blame list can be linked to that. What is it they say? “What goes around…”