Good news

All hope is not lost from our last discussion. After a few days, my daughter came up to me and asked me if I had finished my spreadsheet on saving part of her allowance. I had even better news. I found a little website that would calculate for her - either by inputting the amount saved and the period saved or by establishing a target amount to save by a certain time.

With that in mind we decided to try to figure out how much she would need to save monthly at an average return of 8% to have $500,000 by the time she is 40 if she started with the $7,000 she already has in her two savings accounts. She would need to save $345.88 which seems like a lot to a twelve year old. I explained to her that its really not that much, just $4,150.56 a year which could easily be done once she gets a job. And if she takes at least half of every raise she ever gets and puts it directly in to savings instead of spending it, it will be even easier for her to save beyond the $500,000.

So I think we are making some progress. Or I thought we were until she told me yesterday that she had two things that needed to be dry cleaned. I asked her where she got clothes that needs to be dry cleaned - Abercrombie. So we had a brief lesson in the ongoing expense of buying items that have to be dry cleaned. Dry cleaning costs $2-4 per item, more for women's and children's clothes for some unknown reason. So wearing them once every two weeks and having them cleaned could cost between $24-48 per year just for the cleaning. I told her she could have purchased another shirt for that. Her first reaction was that I was always getting clothes dry cleaned. I told her that was when I worked in an "office job" that required me to dress up in clothes that generally required dry cleaning. She thought I got them cleaned for one fixed month cost. After explaining the per piece of clothing pricing and how much I used to pay for cleaning before I started working for myself, at home, in my jeans, she seemed to have a greater grasp of the concept.

Does anyone else think it is crazy that a children's clothing store has items that are "everyday casual" that require dry cleaning? Especially in this economy.