✼ Family Cents
Allow Kids to Make Dumb Spending Decisions — But Only a Few By Aaron Crowe
A
s parents, it’s a standard part of the job description to let children fail every once in awhile. Fall down, brush yourself off and get back up again. Resilience is a good skill to learn. Even in adulthood, learning from your mistakes is a good trait. The same is true with managing money. I don’t mean letting children fail so much that they’re reluctant to manage money at all, but enough to show them that money is limited and they should consider how they use it. Earning an allowance at a young age is a start. But what I think really kicks it into high gear for kids is when they start spending money — or want to spend it — on their own. It’s one thing to go to the store and have your parents buy you clothes because you’re outgrowing everything in your closet. It’s another to go to the mall with your friends to buy your own clothes with your own money. For my daughter, this lesson is kicking in at age 13. And since it’s her money, I’m letting her make some dumb spending decisions — up to a point. After buying her the necessities of life, it’s up to her to pay for any extras she wants such as a shopping trip at the mall for a poster to decorate her room or a boba tea. This has got her more interested in doing her weekly chores at home and earning her allowance, along with seeking extra work as a dog walker and babysitter in our neighborhood. Along the way she’s made a few poor purchases that I think she might admit don’t make much sense afterward. Nicknacks from her hobbies, such as anime, are losing their popularity in our house. They’re small and easily get lost or stepped on and broken, and the initial
14
Boston Parents Paper | October 2017
glow of a purchase doesn’t last too long when they get home. A few bigger examples: But some expenses can be big enough that the regret is that much bigger if you don’t get as much joy out of them as you thought you would. An iPod is one example. About two years ago I gave my daughter my old iPod after I bought a new phone and didn’t need the iPod anymore. She used it to get online and to text friends, and we limited her time on it daily.
of her own money because she made the mistake of letting someone else drop and break her expensive gadget. At least I don’t want her to have to learn from that mistake again until she graduates from high school. Then she’s no longer a “kid” and has a whole lifetime of spending mistakes ahead of her to learn from. Here’s another example. When I was a kid I really wanted a motocross bike. I didn’t want just any motorcross bike, but one designed by a friend of a friend who used rebuilt bike parts to make
It’s one thing to go to the store and have your parents buy you clothes because you’re outgrowing everything in your closet. It’s another to go to the mall with your friends to buy your own clothes with your own money. We told her not to take it outside of the house, such as to a friend’s house, because if she lost it or it broke, we wouldn’t replace it. One day we relented and she took it to a friend’s house to take some photos. A younger child asked if she could look at it, and my daughter gave it to her to hold. The child dropped it and the iPod broke. My daughter knew the rule — she’d have to buy a new iPod herself if she wanted one. She used some money from her savings account and worked for months to earn money doing chores at home, and finally she had enough money to buy an iPod. I wouldn’t call it a dumb spending decision on her part, because it was something she really wanted and is her main way of going online. But is it worth the $500 or so that she could have avoided spending by not giving it to a 3-year-old to hold? That’s one reason why we’re now holding tight to the rule of only using the iPod when my wife and I are around. I don’t want her to be in the situation again of having to spend another $500
bikes. It cost about $100, which I had to come up with myself. I had a paper route at the time, so I had money coming in that I could spend freely. My dad advised me against buying such a bike, saying it might not be the best designed and might not last long. I bought the bike anyway, saving up for a few months to buy it. I outgrew the bike within a year and regretted spending so much of my hard-earned money on something that ultimately didn’t give me as much satisfaction as I had hoped it would. Was that the spending mistake that would send me on my way to being a frugal spender the rest of my life? I doubt it. But it’s one financial mistake I remember making early on, and I’d like to think that it taught me to be a better shopper and to value my money more. Aaron Crowe is a freelance journalist who specializes in writing about personal finance. He writes for a number of websites, including his own at CashSmarter.com.