Learning about money can be difficult for kids. Even if they learn about it at home or school, nothing really prepares them for the real world. Managing money, paying bills, and budgeting sound so easy in the virtual world.
One father decided he had no choice but to take drastic measures to teach his son responsibility and the value of money.
The father told his son he would have to use his college fund to pay it back after losing money on an investment.
“My son suggested a sure investment to me,” he says. wrote in a Reddit post.“I told him that wasn’t a good idea and that he had a lot of money in his education fund and I should just give it to him.”
His father didn’t think taking money from his education fund was a good idea, but suggested another option.
“I told him I would lend him the money but if the investment didn’t pay off he would have to pay it back from his education fund,” he said.
This seemed like a fair trade-off, so the son agreed and signed a contract detailing the interest payments. Unfortunately, the investment didn’t work out as the son expected.
“His foolproof investment disappeared in a flash,” his father wrote. “He got a job. Working for a living turned out to be harder than school. Now, two years later, he’s going to community college this fall with absolutely nothing saved from two years of work. But he’s got a couple of girlfriends and a few vacations under his belt.”
“I told him he had to pay me back before I emptied the account. He was upset that I was taking away his education funds,” he continued.
The son was extremely unhappy, but the man was simply honoring the terms of the contract. In fact, it was a kindness on his part to not take the money sooner.
“I asked him how much money he would have had in his account if I had let him invest,” the father added. “He couldn’t answer. I got the money, but he’s angry.”
It is never a good idea to lend money to people you are close to.
When money is involved, things can get complicated quickly. “Lending money to friends and family can lead to financial problems and damage relationships,” say financial experts. Rebecca Lake writes in an Investopedia article:.
Lake also noted that one of the most important things to consider when lending money is the likelihood of getting the money back. “Apart from the financial impact, it’s important to consider the likelihood of getting the money back,” he wrote. “If the friend or family you’re lending to is responsible for paying their bills and has been through a one-time financial crisis, repayment may not be an issue.”
This man’s son was probably not a very responsible person, and wanting to spend his college fund on so-called “foolproof” investments is not exactly a sign of responsibility.
Ultimately, the father wanted to teach his son an important lesson, and it wasn’t about getting his money back: “The money can be written off – it’s a significant amount, but not enough to cripple his future,” the father wrote. “But I want my son to understand that money isn’t free.”
Mary-Faith Martinez is a YourTango writer covering entertainment, news, and human interest topics.
