A few days ago, we went to buy some soup for mommy who was feeling a little sick. The topic turned to employees (based on a sign at the grocery store) and I explained

An employee is someone who does some work and gets paid for it

Oh, like you get paid?

Yes boys, just like that.

And you use some of that money to buy soup for mommy?

Yes

I realized that you guys don’t see us spend money much, just put stuff on the credit card. So I wanted you to understand how it works.

Boys, I want you to listen carefully. We’ll talk about this more later, but please listen now.

We’re listening Daddy

Let’s say you want to buy a toy that costs $10, but you only have $5. The credit card company will say “We’ve got $10, let us buy it for you” and you agree. Then the credit card company says “You can pay us $5 now and $7 next month.” How much does you toy cost?

$12 (George)

Does that sound like a good idea?

Oh no Daddy, I would never do that (Isaac)

Well lots of people do son. So when the credit card company says to Mommy and Daddy “You’ve used $100” Mommy and Daddy pay them all of that.

So you don’t buy stuff on a credit card unless you have that much money or more than that much money. (George)

Exactly boys

Keep this in mind. It’ll save you a lot of heartache down the road.