My Grama Raye gave each of her grandchildren the same Christmas gift each year. We knew she would hand each of us an envelope containing a card and five dollars. The ritual became a highlight of our family’s Christmas celebration.
One year Raye had a surprise for us. We each had to choose between an envelope and an animal sculpted from aluminum foil. The choice had to be made without the benefit of handling a foil animal. I couldn’t imagine choosing one of the animals as my gift. Some of my cousins, however, each gleefully received one of the lovely silver creatures. I took an envelope, which I promptly opened. Inside I found the expected card and five dollars. My more adventurous cousins disassembled their foil sculptures and discovered each held five dollars in coins.
Looking back, this event showed me something about how I prefer to handle life, and specifically money. I chose the sure thing, the low-risk option, the known. Some of my cousins chose adventure and the fun of the moment. Each of us felt comfortable with our choices.
As an adult, I have embraced my lack of comfort with risk. Knowing I prefer more security and certainty makes financial decisions easier. Debt? No, that’s risky. Six months no interest? No, something might change. Potentially high-yield investments? No, they are generally higher risk. And the older I get, the less risk I’m willing to take.
In Personal Finance class, we’ll be discussing how being aware of our risk tolerance can help us make financial decisions. We’ll also learn ways to eliminate unnecessary risk by living without debt, saving, and investing wisely.