Parents were no easy mark
in teaching kids how to budget

By Mark Schwanhausser
San Jose Mercury News

School teacher Ruth Hoyt likes to joke that her husband tried to teach their two sons how to go broke. The Pleasanton couple happily reports the kids ultimately flunked that lesson. ``I purposely wanted them to go broke sometimes so they'd have to go without,'' explained her husband, Brian. ``We thought, `How else are we going to teach them that's the way life is?' ''

How else? In truth, the Hoyts had no shortage of ideas for teaching their sons, Matt and Waide -- now 29 and 27, respectively. They developed a reality-based curriculum that addressed budgeting, paying on time, matching funds and monetary incentives:

-- When they started school, each boy earned an allowance to cover school lunches and other expenses. But if they didn't save some, mom and dad refused to bail them out at the cash register.

-- When the kids wanted to replace their serviceable bicycles with trendier dirt bikes, dad offered them extra jobs -- and matched their savings, dollar for dollar.

-- When both coveted stereos for their own rooms, Dad spotted a $130 stereo sale and offered a deal with zero-interest financing: Scrape together a $30 down payment, then make $10 installments the first of each month. If a payment was five days late, dad would take the stereo until he was paid. If they missed three consecutive payments, he'd repossess.

Each boy was late only once.

-- When the boys hit junior high, the Hoyts cut a pact to ease the annual back-to-school battles over clothing. Matt and Waide received clothing allowances they could spend any way they liked -- as long as they bought certain staples, such as shoes, pants and shirts. But mom and dad wouldn't dole out more cash for clothing until Feb. 1.

Their first trip to the mall, the boys didn't spend a dime. Instead, they went on a ``research mission'' to see what they could afford. Once, though, one son splurged on a pair of pricey basketball shoes. ``That sort of stuff would make my eyes roll,'' their dad said. ``But I made the rules, so I had to shut my mouth and . . . wait for the four months and see if they learned anything.''

-- Perhaps the biggest deal came during each boy's senior year of high school. The Hoyts bought each one a pickup they could drive through college. If they graduated, the truck was theirs. In the interim, mom and dad paid for maintenance, the boys paid for gas and half the insurance. If they qualified for a good-student discount, they got the entire discount.

When Waide, who was a competitive snowboarder, wanted to step up to a four-wheel-drive for better traction in the mountains, the Hoyts cut another deal to defray the extra tab. If Waide came up with $1,000, they'd lend him another $1,000. Dad drove home with the pickup -- and parked it in the garage for months, where it sat enticingly until Waide pulled together his down payment. ``He'd go out and almost fog the chrome on the windshield every day,'' his father recalled.

Meanwhile, Waide scraped together every penny he could.

``You talk about living cheap -- he was living cheap.''