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the One Lesson NEVER to Teach Your Child

Updated on January 11, 2015

If you don't have money you can use a card?

Child asking a question.
Child asking a question. | Source

Annie's Story

Note: All photos on this hub are courtesy of Pixabay.com Pixabay photos are free to download and use in any format.


"Granny", Annie said tentatively, chewing the ends of one of her plaits. "Daddy bought me a whole load of Christmas presents today."

Her granny looked up from the magazine she was reading, closely eyeing the chewed plait. "That was very kind of him. That must have been expensive."

"Yes," she said, nodding her head in agreement and releasing the chewed hair to let both plaits bob back over her shoulders. "He got me a Furby and that costs a LOT of money and he got me a lot of other toys I wanted." She reeled off the names of other popular toys, all expensive, then paused.

"Granny?"

"Yes?"

"Daddy hasn't got any money, has he?" Her granny put the magazine down, frowning slightly and turned to give Annie her full attention.

"What makes you say that?" she asked slowly.

"Well he said he didn't have the money, so he put it on his card. If you don't have any money, you can just put what you want to buy on your card, can't you Granny?"

Granny took a deep breath. "You still need to have money to pay back on the card," she pointed out, but Annie was already away to play with one of the toys her daddy had allowed her to have from the Christmas stash.

Granny shook her head and got up to find Annie's father.

"That's not what I meant," he exclaimed impatiently, after his mother had explained her concerns. "I paid for the toys with a debit card, that takes the money straight from my account, not a credit card, where you pay interest and the debt can pile up if you let it."

What's YOUR expenditure pattern?

How do you spend most of your money?

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Cards make it too easy to spend

Debit and Credit Cards
Debit and Credit Cards | Source

What Was the Lesson?

Annie does not understand money, debit and credit. She has no idea that the money you take from a "hole in the wall" or ATM is actually your own money that you have earned and that has been deposited in your bank account by your employer, or however you earn your money. Annie also doesn't understand the difference between a debit card and a credit card. But do we? There seems to be a disconnect somewhere between the idea of earning or accumulating money and what we actually spend. And this disconnect seems to me to have come about since we stopped using cash and took to using debit and credit cards.

Whatever you want?

As many toys as you want from the on line shop in the sky?
As many toys as you want from the on line shop in the sky? | Source

The child's lesson

Children have to learn the idea of "correspondence", that is, that what you spend has to correspond with the money you actually have. They learn about coins in school and how to add or subtract money but do they learn that you need to HAVE this money first, before you can spend it? Children's pocket money and money earned from chores used to be the way they learned how to budget their money or how to save for something big that they wanted. But nowadays? Do they just ask and expect whatever they want to arrive from the on-line warehouse by "using the card"?

It All Adds up!

Even one latte a day can add up to hundreds or thousands of pounds or dollars a year.
Even one latte a day can add up to hundreds or thousands of pounds or dollars a year. | Source

The adults' lesson

Many adults too, have been taken in by the ease of "the card". Advertising tells you what you should "want" or "must have" in order to take your rightful place in society. Other advertising tells you how "easy" it is to get credit or easy terms to get what you want. What they don't tell you is that using all those easy terms and credit adds up over time to a thumping unaffordable sum and that much of what you got with the money went on non-essentials. that is, it wasn't spent on food, housing costs, heating or necessary clothing but on unnecessary items. I can't tell you what those unnecessary items were but take this tiny example: maybe you work in town and you go out every lunchtime to have coffee with friends or colleagues. Because you are in a group and you don't want to seem mean or unable to keep up with the crowd, you order the spiced latte or some other popular drink. It's only $5 or £3. What's that? If you work 5 days a week for 46 weeks a year, that adds up to 230 days at $5 a day = $1150 or £690 in the UK. Maybe you buy your lunch or an impulse treat in the shops, even an average of $10 or £10 a day on each working day will cost you £2,300 or $2,300 over a working year. That may seem like small change to someone in work (though not to someone who is unemployed) but apply the same to something bigger that you "WANT" but don't "NEED". Do you need two foreign holidays a year? Do you need to replace your furniture with something different or buy another car? Do you need to buy designer clothing?

What's the difference?


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The Answer

Well, no, I don't have an answer. What I want is different from what you want. And what I can do without, maybe you can't (and vice versa, I am not excepting myself from this). But I have learned to ask the following questions (adapted from the money saving expert's site) when I see something I might want to buy, which is "Do I need it and Can I afford it?" If either answer is "No", I try not to buy it. I have also taken to using cash for my needs, instead of a bank card (adapted from Pam Young's "Get out of debt book" - the GOOD book) because you can SEE what you are spending your money on and SEE that it is getting depleted, whereas if you use a card, you do not get this physical realisation that your resources are being rapidly depleted. Adults have a "disconnect" where money and cards are concerned too.

Use cash more often

Use cash more often to connect expenditure with resources
Use cash more often to connect expenditure with resources | Source

The action

So what action can you take to reduce dependence on bank cards, if you want to cut your expenditure?

1. Use cash more often, instead of your card, especially for those small purchases that can add up to large amounts unknowingly.
2. Ask yourself the two questions "Do I need it and Can I afford it?" before purchasing anything.
3. If you don't want to make up a total budget, then start out by allowing yourself a small daily budget of say, $10 or £6 and keep that on you in CASH. Once it's gone, it's gone. If anything is left over, put it in a jar and save it towards a treat.
4. Teach your children the correspondence between what you have and what you can spend - it may be the most valuable financial lesson they'll ever learn.

The Next BIG Problem

There are now contactless payment cards. Some of you may already have them. In London, the "Oyster" card is used to pay for travel journeys on the London Underground. You top up the card, and then as you travel on the Underground (metro), your total amount is depleted without having to use a machine, the cost is deducted contactlessly as you pass the barriers. But some customers have had the wrong card charged! http://www.theguardian.com/money/2013/may/25/contactless-cards

Banks have been testing out debit cards for contactless payment in some areas in England. Children got pocket money cards and adults did not use cash at all, just these cards even to pay for very small amounts (such as a bar of chocolate).

Banks are now issuing contactless cards whether you want them or not! Some customers are complaining that they have been charged on these when they did not want to pay that way. http://www.thisismoney.co.uk/money/saving/article-2328578/How-safe-new-contactless-bank-cards.html

Why would banks issue contactless cards? Well, they say they are safer for the customer and remove the need for large amounts of money to be moved about the country. I suppose it doesn't hurt the banks that they then find out EVERYTHING about your spending habits, down to the last bar of chocolate or skinny latte you buy? This is valuable information that they could sell.

BUT it still gives US a disconnect between the money we have available to us and the amount we spend. Is that deliberate?

What do YOU think?

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    • erinshelby profile image

      erinshelby 3 years ago from United States

      It's interesting that you said a latte can add up to extra pounds (currency) but that could also mean physical pounds. Money and weight are related on so many levels.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      That`s very true and I hadn't even thought of it that way! Thanks for visiting and commenting.

    • WillStarr profile image

      WillStarr 3 years ago from Phoenix, Arizona

      If only our government would read this. Their (our) credit card debt is now $17,000,000,000,000 and counting.

    • RTalloni profile image

      RTalloni 3 years ago from the short journey

      Daddy didn't have cash on him at the moment and he did not communicate the situation clearly. Annie's response shows how closely kids pay attention to what adults are saying and doing--the two should match! :)

      Good points to make here at the beginning of a new year. Glad to see the topic highlighted with such a clear example!

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Yes, children pay VERY great attention, even if we don't realise it! Thanks for visiting.

    • Nell Rose profile image

      Nell Rose 3 years ago from England

      Oh how I totally agree with you! I have only ever had one credit card, that was to buy myself a motor bike years ago. And it was a terrible mistake. the bank wrote down the payback details wrong, tried to take money out of my account on the 24th of the month when my money only went in on the 25th of every month, and I got in so much debt because they never told me until six months later! by that time I was up to about 2,ooo pounds worth! I got it sorted out in the end, but took ages to pay it back, though it was there fault! never ever again. great post! nell

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      That is an awful feeling. Glad you got it sorted in the end.

    • profile image

      Ben Blackwell 3 years ago

      This is a good hub. Keep up the good work.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thanks.

    • APooch profile image

      APooch 3 years ago

      DreamerMeg.. I love the story. I like how you tied the story into your lesson ! Very interesting stuff and a great way of showing us what you mean.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thank you very much, and for visiting.

    • DreamerMeg profile image
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      DreamerMeg 3 years ago from Northern Ireland

      @WillStarr. Thanks for visiting and commenting. I didn't even realise your comment was there because HubPages marked it as SPAM!!!

    • Faith Reaper profile image

      Faith Reaper 3 years ago from southern USA

      I love how you incorporated your story about Annie here to teach about the differences of using cash and going into debt to pay for items. Going into debt is never the answer for sure, and I do believe we should teach children at a young age about money. The only time to use a credit card is to build one's credit history, but one should buy one item or maybe gas, and then pay it all off at the end of the month or whenever it is due. That will boost one's credit score. Otherwise, never use credit cards to live on!!! On my daily hour commute to and fro, I listen to Faith Radio and they have a money show. They recommend first and foremost that all get out of debt, as one will become a slave to it. When one gets paid, give 10% to the Lord first, then 10% to savings and then pay your bills and live off what is left and that is it. We are living beyond our means today and it takes its toll on our economy and personal lives. They also recommend to save at least three times one's monthly bills for an emergency so that one an emergency happens, one does not have to go into debt to get that car or air conditioner repaired. In addition, they say to pay off the smallest credit card or debt first, so you have some sense of accomplishment and then, once paid off, use that money to pay extra on the next lowest card until it is paid off, and keep going until all is paid off. Of course, it is better to have never gone into debt to begin with, and that is what we should teach our children.

      Very useful hub. Up and more and sharing.

      Blessings,

      Faith Reaper

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thank you very much for reading and commenting. Everything you have said is quite true. And we are all living beyond our means. I loved Charles Dickens' comment as Mr Micawber: Annual income £20, annual expenditure £19 19s and 6d (old UK money), net result, happiness, annual expenditure £20 and 6d, net result - misery!

    • Jackie Lynnley profile image

      Jackie Lynnley 3 years ago from The Beautiful South

      My parents taught me this lesson and I live by it. It may not make you rich but it can save a lot of stress and worry. I think it just makes a more honest person of you to know you cannot spend what isn't yours. ^+

    • DreamerMeg profile image
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      DreamerMeg 3 years ago from Northern Ireland

      It certainly makes life less stressful. Thank you for visiting.

    • billybuc profile image

      Bill Holland 3 years ago from Olympia, WA

      I think we come from the same generation my friend. I do not have a credit or debit card. I want to feel the money in my hands when I spend it...it hurts just a little that way. LOL Seriously, I try to live my life according to "needs vs want" when spending....do I need it or merely want it? Seems to be working for me. Great message here!

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Needs and Wants is a great way of looking at possible purchases - the "wants" often turn into "stuff to store or get rid of", straight after we have purchased them! Thanks for visiting.

    • Eiddwen profile image

      Eiddwen 3 years ago from Wales

      Interesting indeed and I now look forward to many more by you.

      Eddy.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thank you very much. Most of my writing at present has to be on my thesis but occasionally I see or hear something I just HAVE to write about. Thanks for visiting.

    • tirelesstraveler profile image

      Judy Specht 3 years ago from California

      Excellent ideas. My son and his wife got rid of their credit cards Then when one of them lost their job they didn't have quite so much burden.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Yes, it makes life a LOT less stressful in so many ways. Thanks for visiting and commenting.

    • B. Leekley profile image

      Brian Leekley 3 years ago from Kalamazoo, Michigan, USA

      Up, Useful, and Interesting.

      Many of us adults have needed to learn those lessons, too. I was a too slow learner when I needed to understand the concept of compound interest. I stopped using credit cards years ago.

      I usually have a little bit of pocket cash, but I mainly use a debit card. I keep aware of our financial situation by going to our credit union account online and writing down the balance, the available balance after subtracting pending payments, the actual balance after subtracting any uncleared checks and such, and the spendable balance after subtracting a $25 cushion just in case I messed up and forgot something. Then I look at how many days till payday. If, for instance, $12 has to last half a week, we minimize spending. When we're more flush, we might buy groceries, car gas, or whatever.

      I also make use of a number of savings accounts. One, for instance, I nicknamed Set-aside. I move into it cash for paying bills that are not due yet but will come due before next payday.

      Learning how to make a budget and to honor it is our next lesson. We have good intentions to give that a try soon.

    • DreamerMeg profile image
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      DreamerMeg 3 years ago from Northern Ireland

      Budgeting is very useful. I have most of my direct debits for my utilities coming out of my account at the end of the month BEFORE I get paid, so I know I have to leave a certain amount available for those!

    • SANJAY LAKHANPAL profile image

      Sanjay Sharma 3 years ago from Mandi (HP) India

      Great hub. The credit cards make us extravagant. I enjoyed reading it.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thank you for visiting. Yes, you're right! Credit cards make it too easy to spend money that we might not otherwise spend.

    • Deborah-Diane profile image

      Deborah-Diane 3 years ago from Orange County, California

      Great advice!

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thank you

    • DDE profile image

      Devika Primić 3 years ago from Dubrovnik, Croatia

      the One Lesson NEVER to Teach Your Child is a great lesson indeed. I don't use credit cards or nay other card.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      That's a great way to be! Thanks for reading and commenting.

    • VioletteRose profile image

      VioletteRose 3 years ago from Chicago

      This is really a very thoughtful article, thank you for sharing it with a nice story. I usually use the debit card only for large amounts, somehow I feel more comfortable with using the actual cash. I hope my kids get the real meaning of all these and the importance of spending money within the budget.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thank you very much. Yes, somehow, cash is more "real".

    • sparkleyfinger profile image

      Lynsey Harte 3 years ago from Glasgow

      Great hub! I learned the lesson about debt early in life, but unfortunately it didn't stop me learning for myself when I was in my late teens. Credit cards can be so tempting when you know you can't afford something, but reeeeeeeeeeeeally want it! Still paying the debt at 25! Avoid credit cards like the plague now! Voted up and useful!

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Yes, it's so easy to get into debt and it takes so long to get rid of! Thanks for commenting.

    • Suzanne Day profile image

      Suzanne Day 3 years ago from Melbourne, Victoria, Australia

      This is indeed a very important lesson for children (and adults) to learn. I noticed my kids had a similar attitude to Annie for awhile there, because I hadn't invented their pocket money chores etc. Now that there is a pocket money regime and they need to save for what they want, they are understanding money matters a lot more. Also, sometimes it's good not to let them get everything they want....makes them remember saving for rainy days and also gives them a reason to strive. Voted useful and up!

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Earning money is important. Thanks for visiting.

    • CrisSp profile image

      CrisSp 3 years ago from Sky Is The Limit Adventure

      Great hub!

      This is what I've been teaching my girls and I cannot emphasize it enough not to buy anything if you don't have the money. I'm so proud of my youngest who's now a freshman in the University and knows how to handle her finances, like not using her credit card unless it is really necessary and if she does, she'd make sure to pay the full amount before the due date comes in. More often, she'd use cash as I taught her.

      Credit cards are trapped! It's best to stay away unless really very necessary and simply learn to just live within your means.

      Great advise. Absolutely worth sharing. Voted up and useful. Thank you.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Living within your means - an old piece of advice but SO important! Thanks for visiting and commenting.

    • kerlund74 profile image

      kerlund74 3 years ago from Sweden

      Great hub on an important issue! I think that it is easy to forget that it is money on our cards, it is so easy to shop and pay later. What you write about is extremely important to know and act on, for adults and children.

    • DreamerMeg profile image
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      DreamerMeg 3 years ago from Northern Ireland

      Thank you for visiting and commenting.

    • Eiddwen profile image

      Eiddwen 3 years ago from Wales

      A wonderful hub which leaves much food for thought. Brilliant work here and I wish you a great weekend.

      Eddy.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thank you so much for your comment and for visiting.

    • midget38 profile image

      Michelle Liew 3 years ago from Singapore

      True...we shouldn't teach our kids to use credit cards because of potential overspending!

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Or we should teach them to use them wisely - buying only what we can afford to repay and NEVER for everyday living expenses.

    • lilmissmontana profile image

      Erin Nichols 3 years ago from Montana

      What an excellent lesson and hub! I think it is very important to understand money and to only spend what we have. I never use a credit card and at one point I thought I wanted one, but it just isn't in my beat interest.

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thanks for reading and commenting. A credit card can be useful (in the UK, anyway) because it can give you protection on large purchases but only if you can actually AFFORD what you are buying.

    • kenneth avery profile image

      Kenneth Avery 3 years ago from Hamilton, Alabama

      Hi, DreamerMeg,

      Great read. Very informative. Every newlywed couple shoud rea this after the "I do's" are said. Votd up and all the choices. Check your fan mail.

      I love your talent for writing.

      I cordially-invite you to check two of my hubs and then be one of my followers. I would love that.

      Sincerely,

      Kenneth/ from northwest Alabama

    • DreamerMeg profile image
      Author

      DreamerMeg 3 years ago from Northern Ireland

      Thanks very much for reading and commenting.

    • kenneth avery profile image

      Kenneth Avery 3 years ago from Hamilton, Alabama

      My pleasure, Dreamer Meg.

      You are a very-talented writer and I appreciate your talent.

    • teaches12345 profile image

      Dianna Mendez 2 years ago

      This is valuable information on spending and saving money. I think too many of our youth think a credit or debit card have infinite cash balance.

    • DreamerMeg profile image
      Author

      DreamerMeg 2 years ago from Northern Ireland

      Yes, very true. Thanks for commenting.

    • billybuc profile image

      Bill Holland 2 years ago from Olympia, WA

      We purchase according to needs rather than wants, and we always pay cash. We do not own credit cards.....this is such an important article...now if we can get a couple hundred million people to read it.

    • DreamerMeg profile image
      Author

      DreamerMeg 2 years ago from Northern Ireland

      Needs, rather than wants are VERY important but advertising is aimed directly at getting people to satisfy their wants. I would LOVE a couple of hundred million people to read it! :) Thanks for visiting and commenting.

    • FlourishAnyway profile image

      FlourishAnyway 2 years ago from USA

      Great recommendations, Meg. I particularly like the distinction between want vs. need. I am a close adherent of Suze Orman's financial wisdom which closely aligns with some of what you are saying. Kids definitely look at what your behaviors are and they copy it later in their own lives.

    • DreamerMeg profile image
      Author

      DreamerMeg 2 years ago from Northern Ireland

      Thanks very much for visiting and commenting. I have heard of Suze Orman, must read her sometime. Children are little copycats and, as my mother used to say, "they have very long ears", that is they HEAR what you say, too.

    • stars439 profile image

      stars439 2 years ago from Louisiana, The Magnolia and Pelican State.

      A very good hub. Credit cards can easily ruin the financial freedom of individuals if there not managed properly. GBY

    • DreamerMeg profile image
      Author

      DreamerMeg 2 years ago from Northern Ireland

      Yes, so very easily. Thanks for visiting.

    • Prabhjot Saini profile image

      Prabhjot 2 years ago from Delhi, India

      My baby is eight months old and I have a lot to learn and know about saying and doing the right thing around him.

      Thank you for such a useful hub. Voted up.....

    • DreamerMeg profile image
      Author

      DreamerMeg 2 years ago from Northern Ireland

      You have plenty of time, yet, before money becomes a topic! I hope you are enjoying playing with your baby.

    • kenneth avery profile image

      Kenneth Avery 2 years ago from Hamilton, Alabama

      Feb. 12

      DreamerMeg,

      Great read. Very helpful advice on such an important topic. My only daughter has always been very frugal even at her first job as a waitress. She would save and save. She saved enough to make a down payment on her first car.

      Her husband is also a good money manager. Sure, at Christmas and birthdays, they spend on MY three grandkids, but never buy for themselves.

      I appreciate your writing talent.

      I wonder if you ever became one of my followers. I cannot remember But anyway, have a Happy Valentine's Day.

    • Tamirogers profile image

      Tami Rogers 2 years ago from Seattle, Washington

      Great hub! I raised two girls (now in college) and we constantly warn them off debt. (We only have a mortgage!) I feel this is SO important and not talked about nearly enough! Bravo!

    • Frank Atanacio profile image

      Frank Atanacio 2 years ago from Shelton

      a very good hub.. valuable.. and the break down is important one thing I got wrong was your quiz I thought a charge card was the same as a credit card.. hmm

    • DreamerMeg profile image
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      DreamerMeg 2 years ago from Northern Ireland

      Yes, I follow you.

    • DreamerMeg profile image
      Author

      DreamerMeg 2 years ago from Northern Ireland

      Yes, brushed under the carpet

    • DreamerMeg profile image
      Author

      DreamerMeg 2 years ago from Northern Ireland

      There may be differences between American and British terminology.

    • Snakesmum profile image

      Jean DAndrea 2 years ago from Victoria, Australia

      Totally agree with what you say. We were brought up to be careful with money, and I've always had a budget. Don't think I could manage without it. :-) My spreadsheet tells me exactly how I'm doing!

      Voted up.

    • DWDavisRSL profile image

      DW Davis 20 months ago from Eastern NC

      I enjoyed reading your Hub and think the lesson is important to share with children and I know a lot of adults who need it as well.

      One thing I see was mentioned in the comments already was the definition of charge card. Here in the US a charge card is a non-bank card issued by a store that allows you to buy merchandise at that store or chain only. Like credit cards, most give you a certain time to pay without interest. They work somewhat like the old fashioned charge account at the local general store or grocer did once upon a time. You are allowed to take the merchandise at time of purchase and then pay it off at the end of the month.

    • DreamerMeg profile image
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      DreamerMeg 20 months ago from Northern Ireland

      Thank you for clarifying that. We have those cards in the UK as well but here those would be called "store" cards.

    • pstraubie48 profile image

      Patricia Scott 20 months ago from sunny Florida

      Yes definitely teaching about money and

      how it works is crucial. I know too many sad stories of those who have gotten lost in the trap with dire consequences.

      Teaching about money, credit, debit, and saving can begin at a very early age too.

      Angels are on the way to you today ps

    • DreamerMeg profile image
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      DreamerMeg 20 months ago from Northern Ireland

      Thanks for visiting and commenting pstraubie48

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