Mad Money: Every girl should have some

by cv harquail on August 20, 2009

Family lore has it that my grandfather, a WASP of few words, gave my mom three pieces of advice when she went off to college:

  • Hotels always have clean ladies’ rooms.
  • A Brandy Alexander is an appropriate cocktail for a young lady.
  • Every young lady should have some mad money.

Notwithstanding how odd these three bits of advice are, out of all that one could advise a 17-year old in 1950-something, Fred Bingham had a point there:

Every young lady should have some mad money.

200908181932.jpgMad money? It’s that extra $50, $250 or whatever sum you think you might need to get you out of a bad place in a hurry.

I think the name came from the situation of getting mad on a date and needing to take your own taxi home (?), but it’s still a relevant concept today for Au Pairs.

Every Au Pair should be encouraged to save up $250 – $500 in cash, at the start of her year, no matter what.

This way, if she has a great opportunity or a great need, she can:200908181930.jpg

  • Pay a doctor bill
  • Go see the Killers at MSG
  • Reimburse someone for a car accident
  • Buy a plane ticket somewhere fun, or somewhere closer to home

In most cases, your Au Pair will never need the money for an emergency. Then, she’ll have it to splurge at Abercrombie’s the day before she departs.

Just as long as she doesn’t spend it all at Payless. All those shoes can be a #$*% to ship home.

{ 18 comments }

TX Mom August 20, 2009 at 3:18 pm

Am I the only HM with a pile of shoes too uncool (or whatever) to ship home? When a new AP arrives, I say “If you fit in them they are yours!” Maybe when I do the school closet cleanout for my kids I’ll get rid of that box of shoes…

Seriously on Mad Money. Most of my AP’s have come from meager backgrounds. I feel like my kids have more money management sense than my AP’s. I give the same advice and offer the same assistance to each of them (set up a savings acct with automatic transfer, etc.) At some point, just like our kids, they have to learn by their own experience. (I try to not take it personally.) But I sort of liked the “deductible” idea so that when the car accident occured right before our AP left she had the money. I couldn’t “force” her to save during the year. Any ideas?

Anonymous August 21, 2009 at 11:47 am

You know , I actually heard a woman I met once say that she was going to get an aupair who did not have the money to drop out and go home in the middle of the year. It was then that I came to the realization that every aupair should have enough cash for an emergency. I wonder how the agencies would feel about advising aupairs to save up ( or arrive with ) cash for an emergency plane ticket home.

PA au pair mom August 21, 2009 at 1:01 pm

This is something a friend of mine suggested:

Every week I put $10 into a savings account. At christmas, valentine’s and easter I added an additional $25 each time.

Now our AP is getting ready to go home and I will give her the nearly $600 dollars that is in there for her to take with her. A little spending money to “see her through” until she figures out what is next.

I don’t miss the extra 10 each week and it allows me to help her out a little.

CV August 21, 2009 at 2:25 pm

I do the same thing, and have only not given our departing AP a bonus when she was leaving for a rematch, or when she stayed a shorter time than intended but for personal reasons.

New England HM August 21, 2009 at 3:08 pm

Just got back from helping our new au pair set up her bank account. For the best deal, we set up a student account — she has to take classes, so that’s not stretching the truth too much, right? I’m sure other banks have similar deals, but Bank of America just gave her a checking account and a savings account, no fees, no minimum balance needed, free checks, an ATM card and a “ghost” account so she can buy on-line without worrying about ID theft. I direct deposit her weekly salary into her account, so she set it up so that half goes into her checking and half into her savings every week. And Bank of America has a “Keep the Change” program where they round up every purchase to the nearest dollar and then deposit the “change” into her savings account; right now, they are also depositing their own match for 3 months. For instance, if she makes a purchase for $1.25 with her debit card, they deduct $2 from her checking account and deposit $1.50 into her savings account (the 75 cents that is her “change” as well as a 75 cent “match”). Should add up to some nice Mad Money for travelling!

TX Mom August 21, 2009 at 3:24 pm

Chase was offering $125 for new checking accounts this summer. No fees with direct depost.

Allison January 27, 2010 at 7:17 am

Is it that difficult to manage our finance while in The USA or is it just the individual hasn’t learnt the ropes of financial management? Or could it be there’s too much to do in The USA that the money run dry easily or they were keen to take up more short courses. I have no idea until I experience it myself.

NoVA Host Mom January 27, 2010 at 9:54 am

Just as anywhere, there are things to buy and try and do. Poor money management is not limited to the US, however some APs arrive with an immature view of things and spend as if there is no tomorrow.

Our first AP arrived with 2 bags, left with 5 and she was with us 4 months. When we went into rematch, she cried to anyone who would listen that she had no money for her ticket home. I actually doubt that is true, however we had more than reached our limit with her so we were not giving her one cent more than she was owed.

Our current AP does not shop every week, and saved for a year so she could fly home for her vacation and still buy herself a nice laptop computer and an iTouch. She still has money in her account.

And having a lot to do is certainly not limited to the US. There is plenty to do in everyone’s home country, too. Again, it’s better planning (i.e. saving more money at home for the trip, not buying every little whim that crosses your mind, etc).

PA Au Pair Mom January 27, 2010 at 10:23 am

Our current AP is a much better saver than our last. She also has money saved up from her job in Sweden, so she uses that for extras.

I think it’s individualized. Some are good at saving and managing money and others are not. No difference from US adults.

Mom23 January 27, 2010 at 10:36 am

I have had au pairs leave penniless and one au pair leave with enough money to purchase a (used) car when she returned home. I think it has a lot to do with setting priorities and goals. Creating a budget might be a first step. Your host family might have some budgeting software.

Anonymous January 27, 2010 at 11:47 am

I guess is it really our place to be involved as HMs? At this age, I was on my own for the most part (went to college at 18) and had to find my own way. I made plenty of mistakes, and learned from them (sometimes painfully). I’m happy to help if asked, but otherwise, try to stay out of it when AP comes home with her $200 jeans and 6th pair of high tops. She earned it, she’s going to have to figure out (eventually) how to spend/save it. Just my 2 cents.

Sara Duke January 27, 2010 at 12:14 pm

Our LCC advises au pairs, when they arrived, to save $100 every week to cover medical emergencies, extra tuition, vacations, etc. (Keep in mind that we’ve almost always had Extraordinnaires, so they make more money than a typical au pair).

Some have been savvy, some have not. We pay for medical care when it is caused by a child’s illness (e.g. strep throat). We do not pay for medical care caused by au pair action (e.g. partying for a week on vacation without sleep and getting ill). Almost always they’re shocked by the price of medical care in the U.S. (even at CVS’ “Minute Clinic”).

Some au pairs have left us with substantial savings, others have barely had money to buy presents to take home. (Remember, we ship home one big box of belongings.) I go through items left behind, winter coats, rain jackets, polartec jackets, to put the “au pair closet”, the rest goes to a local charity.

I don’t enforce savings, but I encourage it. For many of the women, their stipend is more money than they’ve ever had, and out of it comes gas for the “au pair car,” money to cover tuition, and a hefty amount of disposable income.

Maybe Future HM September 2, 2010 at 6:24 am

I want to followup to anonymous – is it our place to be involved? This is something I have been wondering about. I think most Americans are woefully unprepared for money management; as evidenced by our country’s current economic situation. If you can afford an aupair, that should be an indication you are doing okay financially. Even if you are not super wealthy, at least is should indicate that you understand financial priorities and budgeting for what is important to you. As a “mom” do any of you try to explain finances to your AP? I have seen several other posts that mentions that AP don’t understand how expensive something are, such as car insurance. Anyone take the time to explain it? Either because you want them to understand how much they are actually being “paid” or just from an educational perspective so they have a greater idea of what adults spend money on?

As a child, I could do fractions very well, probably before any of my peers. That’s because my family was very poor and every time we went grocery shopping my mom showed me how to calculate unit pricing and figure out which box of cereal was cheapest. It was never the one with the toy! I didn’t appreciate it at the time, but when I entered my adult years and started making more money than I ever thought possible, I’m one of the few of my peers that didn’t go into crazy debt.

My 2 cents September 2, 2010 at 11:51 am

Personally I choose to stay out of it. I help open the bank account and suggest they or their parents get them a credit card before they come over. I coach it as a security concern — which it is from my perspective and from their parents’ perspective from what I’ve experienced.

If an au pair needed my help or wanted me to explain things, I’d do so happily. I’ve gone to bat for au pairs over insurance charges not being covered that should have been because I do consider that to be part of my host “mom” jurisdiction, but expenses on discretionary items, no way. This is truly their responsibility and the credit card companies surely know the risks when they issue and decide on a credit limit. If they don’t, well whose to blame there?

First Time HP September 2, 2010 at 2:12 pm

I think the budget question is different from explaining how many additional costs HF incur when hosting an AP. On the first point, I think its great if you want to assist and the AP is willing to listen although I don’t believe that you have any obligation. I don’t see many APs working because of the money, they are doing it for the experience so if they leave with what they came with that’s ok if they had the experience they were looking for.
On the other topic, I try not to remind the AP of the additional costs because I don’t see what there is to gain. Its not their fault that I have to pay more for insurance so they can drive my kids to school so I’m not sure what the point would be. Once or twice something has been mentioned and it just creates tension and some resentment on the AP side. I figure we as HP looked at various child care options, assessed the costs/benefits and decided on this option so it was our choice and I shouldn’t try to make the AP feel indebted because of the costs we’re incurring. Maybe if I had an AP that was suggesting we should be paying more or brought money up we would delve into this but otherwise I would not.

Taking a Computer Lunch September 2, 2010 at 9:46 pm

Just as I would find it rude if my AP questioned my finances, I would never think of questioning hers. As I have posted before, our LCC encourages our APs to limit their spending to $100 per week, and then points out all of the items for which they need to save: medical care, paying the deductible on the auto insurance in case of accident, tuition fees above the HF $500, taxes, return flight fees, and overweight baggage charges. Some APs have listened, some have not. Most of my APs have worked for money prior to their arrival in the US, and almost all have come from working class families (one Brazilian AP was an exception).

I will say that most of my APs have not had credit cards from the US, and this has affected their ability to purchase travel tickets online. I have always insisted on cash up front before I make a credit card purchase on their behalf (mainly because they often push the limits of my line of credit).

But, when APs spend every penny they have, I keep my mouth shut. When they don’t budget and they incur expenses, I offer to help, but my money comes with a lecture. It usually only takes one.

Busy Mom September 2, 2010 at 9:11 am

I got very involved in the finances of our first nanny and vowed to never again. It was a bottomless pit. I taught her how to budget, showed her where to cut back on expenses (mind you, she was a live-in but still managed to spend tons) and functioned as her savings “bank” – putting aside money from her paycheck so she could pay her son’s college tuition with a ledger posted on the refrigerator door. No one had ever shown her these basics (she was not born in the US). We adored her (still are in touch 12 years later) and her son personally thanked us for all we had done for his mother…but it became a burden. After that, I’ve stayed out of finances except to assist au pairs in opening bank accounts, explaining the costs and trade-offs of our local education options, and suggesting that they have something set aside for emergencies. However, all 3 au pairs seem to have relatively good money sense…better than our last nanny who was a fabulous nanny but got herself into serious credit card debt. Probably helps that the APs don’t have credit cards!

mom23 September 2, 2010 at 10:54 am

Ah how I wish au pairs did not have credit cards. Evidently, they are very easy to get and to run up large debts. After one au pair left, we had creditors calling for about six months.

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