Are you smarter than an 8 year old?

Eight-year old Suzy shakes her head because she’s heard this many times before. “Give Billy more money and he should use it to pay down his credit card,” she says. “But just look at what he’s done since January of last year. He has massively increased his spending to levels this family has never seen before. Sometimes he demands (and gets) more money from Mom and Dad to pay for his new spending. He has the gall to call that responsible since he’s not running up more credit card debt. He forgets that every dollar he takes from Mom and Dad is a dollar they cannot spend on the rest of the family’s needs.”

“For example, look at the new lifetime subscription he got to this new online game called ‘Universal Health Care.’ Sure he cut back on his monthly purchases of comic books to cover some of the costs, but he also demanded and received a big permanent allowance increase. Now that family money is committed to pay for his new subscription, and if he’s ever going to pay down his credit card balances, he’s going to have to cut other spending or, far more likely, demand an even bigger allowance increase from Mom and Dad. Once again, the rest of the family will lose out as we sacrifice resources to finance Billy’s unrestrained spending.”

Suzy continues, “Then there was the lemonade stand. ‘I’m going to borrow $787 on my credit card to build a super duper lemonade stand,’ Billy told Mom and Dad. ‘It will be such a success that not only will I make more money, but the whole family will benefit.’ We all know how that turned out, although Billy still claims it was exactly as successful as he had predicted, and that nobody had anticipated a cold summer would suppress demand for lemonade. Where is global warming when you need it?”