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Carnival of Personal Finance: Little Red Riding Hood Edition

The story begins…

Once upon a time, at the edge of a great forest lies a little town, filled with gabled houses and small businesses [The Financial Blogger]. In a little house lives a little girl with her mother. The little girl’s favorite clothe was a brilliant red cape. For this reason the townspeople knew her as Little Red Riding Hood. One day, Little Red Riding Hood’s mother decided that her daughter needs to get an education in financial literacy [Family Balance Sheet].  She didn’t want to spend the money for Dave Ramsey courses [Debt Free Adventure], so she sent Little Red to learn from her Granny.

Granny lives in another little village on the other side of the woods. This great forest was called the Forest of Financial Pitfalls, and was filled with dangerous creatures such as bad debt [Richly Reasonable], rent to own contracts [Stumble Forward], refinancing obstacles [Passive Family Income], money myths [Free Money Finance], online money scams [Financially Poor], long-term unemployment [Modern Gal], and the like.

Granny had a tidy little cottage and was able to live quite nicely because of her savings, dividend stocks [Dividend Value] and Social Security benefits [Net Worth Journey]. She was a smart woman who saved her raises [My Wealth Builder], and understood perks and drawbacks of autopay [Narrow Bridge], Fico regulations [Beating Broke], variable interest rate [PT Money], flex spending [Alpha Consumer], government spending [Hope to Prosper], Build America Bonds [Good Financial Cents], and even social media [Realm of Prosperity].  She worked and saved and invested her way from a thousandaire [Thousandaire] to a millionaire [Nicole and Maggie].

So Little Red Riding Hood began her lessons with Granny (which sometimes included Barbie doll role-playing [Monroe on a Budget]). Every week she would stay at Granny’s house, and every weekend she would go home and visit her mother. Granny is very eager for Little Red Riding Hood to develop good financial management skills, so she opened a Roth IRA for kids [The Roth IRA Guide], cautioned her against financial decisions to avoid [Grand Money], and taught her how to stop feeling guilty about little things [Minting Nickels]. Granny was a no-nonsense sort of woman, so she has prepared for her own death [Rabbit Funds] and gotten all her affairs in order.

The Big Bad Wolf

As Little Red Riding Hood crossed the Forest on her journey, she would sometimes pass the Big Bad Wolf hiding in the bushes (whom she could smell from a mile away because he had very bad personal hygiene [FruGal]!). Big Bad Wolf hated his budget [Live Real Now], never used coupons [KNS Financial] and spent most of his time wishing for payroll tax holidays [Darwin's Money], winning contests [A Gai Shan Life], having a blog as successful as TechCrunch [Intelligent Speculator], and getting promotions [Finance Your Life] (without actually working for them).  One day, the Big Bad Wolf realized that if he can swindle Granny’s money out from under her, he could be “rich enough” [Financial Odyssey] to never work again.

So, one day, while Granny was out at the market, the Big Bad Wolf went to Granny’s home, and assumed her identity!  When Little Red Riding Hood arrived, she realized that Granny looks very different from how she usually looks. “Of course I am your Granny,” the Big Bad Wolf said. So, Little Red Riding Hood decided to quiz her.

The Test (Editor’s Picks)

“Granny, can you tell me the advantages of online banking [FIRE Finance],” asked Little Red Riding Hood.
“Er, um, well, online banking is… online. Which makes it better than, er, off line,” The Big Bad Wolf stammered.
“Granny, what can you tell me about debt and love [Danielle Liss],” asked Little Red Riding Hood.
“Debt doesn’t matter one iota if you really love each other! The greatest lesson you will ever learn, is to love and be loved in returned!” The Big Bad Wolf answered (for he was a secret admirer of the movie Moulin Rouge)

“Granny, can you tell me why do we save? [Watson Inc],” asked Little Red Riding Hood.
“To amass as much money as possible and never spare a penny?” Guessed the Big Bad Wolf.
“Granny, how do you how to balance a checkbook [Dough Roller]?” asked the Little Red Riding Hood.
“You take a the checkbook and put it on a balance, duh!” The Big Bad Wolf answered with a flourish, sure that he had fooled the girl with this answer.

But of course the Little Red Riding Hood was too smart for these types of shenanigans. She threw her cape in his face – temporarily blinding him – then she called the Sheriff of the Forest and had the Big Bad Wolf arrested.

The Education

Little Red Riding Hood, armed with the great education that Granny gave her, went on to live a happy and productive life. In college, Little Red Riding Hood built her credit first with a prepaid card [Prepaid Cards 123], then with the perfect credit card for students [Studenomics]. After she graduated, she got a job that qualified for Federal student loan forgiveness [Money Q&A]. She continued her education by creating her own MBA [Gen Y Wealth]. She made money as an online writer [Money Help for Christians], invested in tech dividends stocks [Dividend Growth Investor], and then later started a home-based business [Spruce Up Your Finances].  All this was possible because Little Red Riding Hood used budgets that worked [Green Panda Treehouse] for her and used credit cards smartly [Oblivious Investor].

Big Bad Wolf’s Punishment

As for the Big Bad Wolf, he bought a season’s pass to the NFL [Bucksome Boomer] and a big vacation (complete with to-and-from airport transportation [Dealerity]) in anticipation of his ill-begotten gains. But he was arrested for trying to steal Granny’s money, participating in disturbing trends [Ask Mr. Credit Card] and for SUI – shopping under the influence [Budgets Are Sexy]. Hope he had trip cancellation insurance! [Wanderlust Journey].

He was sentenced to a reform camp where he had to learn to be more generous [Squirrelers] (and deduct credit card reward donations appropriately [Bargineering]). He also had to pay back the money he owed to all his friends and neighbors [Blonde and Balanced]. After he was paroled, Big Bad Wolf had to move home with his family (he spent most of his time cleaning his room [Sweating the Big Stuff] and reading how to get girls if you live at home [Financial Samurai]).

Life after Granny

After Granny passed away, Little Red Riding Hood used her inheritance to buy a house [Money Under 30] on a corner lot [Len Penzo], and, following Granny’s advice, she insured the home loan [My Personal Finance Journey]. Also thanks to Granny’s instructions, Little Red Riding Hood enjoyed the benefits of being a good credit card customer [Credit Card Offers IQ] all through her life.  Later, when she purchased apartment buildings, she carefully looked at the positives and negatives of property management firms [Passive Income Now].

Once in a while, Little Red Riding Hood dabbled in currency trading [Accumulating Money] at TradeMonster[Consumer Boomer], but her main personal portfolio [Barbara Friedberg PF] always had the right asset allocation [Investor Junkie] in index funds [The Digerati Life], a select number of dividend stock [The Dividend Guy Blog], a small portion in gold [Funny About Money]. Above all, she used technology to help her budget [The Smarter Wallet]. When recessions came, as they are wont to do, Little Red Riding Hood wasn’t one who benefited from the recession [Go Banking Rates], but she didn’t fall into financial ruin either.

After many years have passed, Little Red Riding Hood became Granny Red Riding Hood, and she passed on her lessons to her own daughters and grand-daughter.

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