Kids and money? (trying again...)

[KimKelly]

So my first post didn't post anything inside the thread! What's with that???

In any case... here is my issue. My son is 10 years old and has earned $150 from a small job and for his birthday. He's usually a good saver, but he does have a passion for sports cards. With football season approaching, he is on the market for new cards! On a recent trip to our local card shop he picked out $20-25 cards (ea) and 2 $15 cards. I told him no. Now I'm in a quandry as to whether I did the right thing. I hate to see him throwing his $ away on something that he is simply buying to have (he does not re-sell). He says he doesn't have anything good to trade with his friends and you don't know if you are going to get something good in a pack. So I can see him trading the $25 card away for another card just to "make a good trade". Now the other kids don't buy individual cards, they just buy the inexpensive packs.

What would you do? Do you let him live and learn? (My concern is that he won't really learn anything) Or do you not allow him to spend the $ that way. I did talk to him and "advised" (yes... in a motherly sort of way....) that I didn't think his idea of that purchase was a good one. So he ended up with a $5 card and a pack of 35 cards for another $10. He came out $15 lighter and got 2 cards out of the whole thing that he liked.... the one that he purchased and one from the pack.

Thoughts???

Kim

[sneezles]

I have always been "it's your money" kind of mom and now that my guys are older they all seem to have a pretty good handle on spending. DS#3 seems to be the spendthrift of the bunch but he does earn his own money and I figure he has the right to spend it as he wishes...they have never come to me for help either.

[Gumbeaux]

In my opinion, part of life is about choices and consequences and the sooner kids learn this, the better. They will never learn if they aren't allowed to take chances, make bad decisions and learn from them.

[Terri_A]

I just started introducing the concept of an allowance to my 4 yo DD. I'm doing it mainly to teach her the value of different coins. With that said, here's the long term plan - She will get an allowance then she will be expected to save 25%, give 25% to charity and then she may spend the other 50%. So, if she gets $5 a week, $2.50 a week can be blown on whatever she wants. I want to show her over time what saving money can do and also we are a family big on helping others ( my child was the one who wanted to give all her toys to the refugess from Katrina!!! ).

My opinion on your situation is that if it is his money to do as he wishes....let him live and learn. I really think that's the only way to get a handle on what is a wise purchase and was is frivolous.

There's no easy solution with kids....good luck!

[AzAnne]

The first thought I had when I saw the thread title was... If you have kids, NO you won't have any money :D ;) .

Honestly, I agree with Gumbeaux and pretty much raised our kids that way.
I think all three learned the upside and down side on how to spend their money.

[ISAIAH30_18]

I'm big on making them save a certain percentage of everything they get. The way I see it, if I don't force my children to save they may not ever "learn" how gratifying it is to see that money build up, or not be in a pinch when they, for example, break something they have to pay for....or get to buy that big item one day. From what I've seen of kids that are taught to save too they are really less likely to spend that savings carelessly because they "get" how long it took to get there.
So, long opinion short, I would say "make" him save a percentage and then let him blow what ever he wants beyond that.

[krhm]

We have a similar rule with our almost 10 DD. She can spend a certain percentage on whatever she wants, and saves the rest. She also donates regularly at Pet Smart, her chosen charity. One problem we have with her is impulse buying; she says she is saving up for a Nintendo DS, then sees a cool game that day at the store, and blows the $40 she has on it. So, our rule is that if she sees it, she needs to have a "cooling off" period, during which she really thinks about it and decides if it's worth it. Sometimes she does, and we go back to the store; other times, she decides it's not and is glad that she didn't spend her money. Maybe you could take a similar approach with your son? L

We also have her savings in an online account that accrues a good bit of interest; it's a good math/values lesson. She likes checking into it to see how it's grown. We also try to talk about future spending, like a car when she's 16.

[imloulou]

My kids are 9 and 10. My husband and I own a business. The kids do not get an allowance but can work for money (usually ends up being 3-5 bucks a week...depending on what they do...this will go up as they get more responsibilities). If we did not have a business we would probably do an allowance so they had money to learn with.

They both have savings accounts. They are not forced to put any money in it but I see it happening real soon on their own. They both saved 60 dollars (this was with a little birthday money from Grandparents) and both decided on $60.00 MP3 players. They are both happy with the players and use them but they learned fast that ALL of their money was gone quickly and there was other things they wanted to buy.

My daughter wanted a rat as a pet. She bought a book on rats first, has a friend that has one and decided after 6+ months of online looking, reading, etc that she wanted one. We went to the pet store and she found out it would cost about 20 bucks up front for everything (we have a large antique birdcage that she is using as a cage) but everything else she had to buy herself. She did not have enought the first trip but I will tell you...she worked hard that weekend (and a few others :D ) to save up the money for her little Sammy that she now has. She also knows that she has to buy food and supplies for the little rodent.

My son bought and cares for a rat too. They are quickly learning that 5 dollars here and 5 dollars there for their animals eats away at their spending money and are making a lot of things for the rats on their own. They make treats, they make little houses and fun contraptions for the rats without buying anything, they use Google and the petstore for ideas. They even each converted their old lunchboxes into travel houses for their rats.

I have rambled on and on but I agree with others that say...they will learn as they spend. They will learn the value of a dollar if they have to save up for something they really want and make a few mistakes along the way.

Let them make mistakes but also make suggestions to guide them...give them ideas and choices and they will eventually learn.

Good luck!

Editing to add: to answer your question...I would have let my son buy anything he wanted with the money (except candy...that is our one rule). BUT I would have suggested to him at the store to go home and think about it overnight and if he still wanted the cards really, really bad then we would go back to get them. I maybe would have mentioned something else he wanted really bad (you are only 50 bucks away from a Playstation Portable that you have been wanting...didnt you want that $100.00 bike really bad?, then you would have 50 dollars left, etc.)

[lindrusso]

I ran into this problem with Yu-Gi-Oh cards. :rolleyes:

First of all, our boys (9 and 12) get an allowance, but a certain amount goes to spending money (free money), some to savings and some to charity (in their case, church, but they could choose anything). When they get birthday or gift money, we encourage them to save it, but they don't have to. If they do put some away, DH matches it. The savings goes into a savings bank account - they each have one in their own name - and they are not allowed to touch it.

As for the spending money - what they spend it on is up to them, up to a point. When my kids wanted to buy the expensive YGO cards, I let them each buy one expensive one - about $17, I think. I then explained why I didn't think it was a good idea to buy any more at this price.

Fast forward a couple of years and they are no longer into YGO. I asked them the other day if they now thought it was a waste of money to buy those expensive cards and they agreed.

So, I agree that they need to learn from their mistakes, but I had a hard time letting them blow ALL their money on that kind of stuff. I think they still learned their lessons, though, since I did allow them to make SOME unwise choices.

DH was totally against allowing them to buy the cards at all - but as other have said - how do they learn? However, I think you can find a middle road that might work too.

Now I'm struggling with when they want to use their money for stuff like soda and/or candy. If they buy it, should they be allowed to eat as much as they want, whenever they want? Or can I allow them to buy it but still have a say over how and when it is consumed? I don't like to allow a bunch of junk food and like to teach moderation. Still, I remember blowing all kinds of money on junk food and here I am, on junk food patrol in spite of my indulgences. ;)

[jellyben]

This thread is very helpful, as we are also trying to come up with some guidelines for how the kids can spend their money. I have told them that there are just some things I won't let them buy-my 9yo was saving up for a pet snake, and I just had to say no friggin' way. And my DD wanted to spend $5 on gumballs at the candy store-another no friggin way. BUt DH and I haven't been very clear about what their allowance is to cover(snacks, toys, books) and we haven't been consistent about giving the allowance weekly(if they don't ask we forget to give it)

Our big problem now is that they actually lose their money, or DS1 swears that DS2 took his dollar or vice versa. They love to be in posession of their money, but they are not quite responsible enough!

[lindrusso]

Our big problem now is that they actually lose their money, or DS1 swears that DS2 took his dollar or vice versa. They love to be in posession of their money, but they are not quite responsible enough!

We've had this problem with our youngest too. That and we often don't actually have the cash on hand when it comes to allowance time.

I think I'm going to try at-home bank accounts. My boys do chores for their allowance (other chores they do just because they live here ;) ). Once a week, we pay them an allowance. Instead of handing them cash, I'm considering keeping an Excel spread sheet (or simple handwritten sheet would work too) to keep track of what they have earned. I can have columns for spending, savings and charity.

Once they reach a certain amount for their savings, I can then write them a check to be deposited in their savings account at the bank.

Same with charity. I can either give them cash to bring to church or write a check for church or their favorite charity.

As for spending - I'm not sure how they will feel to not actually have cash in hand. My youngest loves the idea since he often "misplaces" his money. My idea is that when they want to spend their money, I can give them the cash - kind of like an ATM withdrawal. :) We'll have to see how that goes.

Anyway, the computer banking might be the way to go with younger kids - no more lost money! :)

[KimKelly]

I have a question about savings..... some of you say that you have the kids save a certain amount ( I like the idea of matching!). But.... what are they saving for? Is there some sort of goal? When we talked about this that was my sons first question. "Why am I saving this?"

K

[Robyncz]

We use an "at-home-banking" system for our girls' allowance. They're still young, so it's not much. We made up a jobs list together, and they earn 25 cents each day that they complete all of their jobs. If they do all of their jobs every day for a week, they earn a bonus of 25 cents, which brings them to a grand total of $2 per week. We review their jobs each day, and we tally everything up on Sunday night and add the weekly total to their bank.

They are allowed to spend their money on whatever they'd like--but they have started to realized that waiting a few weeks for it to add up is way more lucrative than spending $2 a week.

I love the idea of matching their contributions to their savings account. We've always encouraged them to put at least half of their gift money in their accounts, but I think matching their contribution is an excellent incentive. I think we'll probably start that.

Recently DD#1 took her piggy bank to the bank. I was expecting to find out she had $9 or $10, but she had over $30 in there. She kept $20 and deposited the rest in her savings account. Then she spent her $20 on an Easy Bake Oven. She was so proud!

I've just realized I've gone on and on without answering the original question. I think I probably would have counseled your son and perhaps suggested that he wait a day before making his purchase, but in the end, if you want to teach him to be responsible for his own money, you have to let him make choices, even when they're mistakes. At least that's my opinion. . .

[Kathy B]

Your kids may surprise you. The first thing DD did when she got her first allowance payment (I think she was 6) was buy a big sack of candy at Walmart. But she didn't gobble it down as I had feared she would. She kept it in her room and brought it out on more than one occasion to share(!), and I swear it still lasted well over a week.

Another thing is that just because YOU think it is a waste doesn't mean it is for your kids. DS spends a lot of money on DVDs and DH thinks that is a silly thing to spend it on. But I remember buying albums with my money when I was in college. Every paycheck would find me at the used record store adding to my collection. I no longer have any of them (or a record player either for that matter), but I still remember how much fun I had shopping and the time I spent listening to them. It was not a waste for me, because it was a hobby I truly enjoyed. Sure they may outgrow the things they spend money on now, but maybe owning a $25 card and having that to trade with would be something your son would always remember fondly!

As for losing it, well, DS lost his wallet once with a fair amount of cash in it. I think he just thought we would replace it, because he was shocked when we were sympathetic but didn't offer to make it up to him. As I told him at the time, if I lose my purse, no one is going to come give me whatever amount of money I had in it, either. He had been saving for a watch and had to start all over. Tough lesson, but he keeps very close track of his wallet now.

Anyway, there are lots of ways to approach kids and money, but the more they learn about it as KIDS, the better off they will be as adults!

[Robyncz]

What are they saving for? That's a good question.

I told my girls that saving money is something they learn how to do when they're kids because they need to know how to do it when they're grown up--just like reading, doing math, picking up after themselves, being nice to people, etc. It's simply another life skill.

[Kristilyn1]

I've gotten some great ideas on here, I love the idea of a cooling off period. We'll be doing that. I also like the idea of matching savings. So far, we don't require our children to save their money, but they've gotten very good at saving money towards things they want to buy. They each get $5 a week allowance. The allowance is not tied to chores because they don't have the option to not do chores. We had the same problem with lost money, forgotten paydays, etc. so for the last couple months I've been keeping a running tally in my purse notebook. It's pretty easy to track. Friday is payday. I have a column for each child and based on the date, I know whether that week's allowance has been added. I subtract based on purchases they make. I do realize the value of handling money and giving them actual money to handle, but I do see the value in a system that keeps the money in an "account" of sorts where you don't actually see it. Since so much of this world is a no-cash environment, I do thinks its helpful. My children have made a few bad choices in toys that turn out to be a rip-off or money spent on things that they immediately lost interest in, but they've bought themselves their own Playstation and games and then when they wanted to upgrade, they saved the money to buy an XBox. Every time they talk about wanting something, we talk about what they need to do to save for it, and how long it might take. I do have one unspoken rule and that is that their money is not spent on food, especially candy. I suppose I should relax it, but to be honest, it hasn't really been an issue yet. They don't expect to be able to, so they haven't pushed it. Sometimes they buy things on their own, but they've also learned very well to pool their money together to get the things that they both want, so it's been a nice lesson in sharing and working together for a common goal. It's been nice for me, because I don't buy any toys, gadgets, etc. other than birthdays and Christmas. We are at a store and they ask me if they can have something, I always say "do you have enough money for it?" Works every time. It's amazing the number of things that lose their appeal when you have to pay for it with your own money!

Kristi

[mrswaz]

What a great thread!! I really like the ideas of the "at home banks". We haven't totally instituted an allowance system, but DD knows that when we have company, she is to clean her bedroom up nicely. That garners her $1.00. Then one week she got entrepreneurial and cleaned up her brother's bedroom as well, and then proceeded to ask for a second dollar. Who could refuse that? 2 yr old DS's room usually falls to Mommy...

Anyway, currently she is saving for a $50 Donkey Kong game for her Gamecube. She is almost at $20 right now. There have been times where we have been going shopping, and I've asked her if she would like to take her dollars along. She's looked at me in horror "Mommy! That's for my new game!" So I think she's got the concept of saving. Do I think it's a great idea for her to blow $50 on a video game? No way, not at 6 years old. But she's learning a great lesson about saving and earning money. DH and I have discussed buying the game for her as a gift and then seeing what she does with her hard earned money, but I do think that we'll end up letting her save and save and buy the game.

[Kathy B]

One way to explain saving is to talk about things you may need/want eventually. We save our money, then when we need a new car, or a new roof, or (fill in the blank), we have enough money to take care of it. We don't have to have a leaky roof, or a broken car until we can save enough to fix it. With kids, they may want to Christmas shop or have money to spend on vacation, or there may be a really cool thing that all of their friends have that they would like to get too. If they have saved their money all along, they will be prepared for those situations. If not, it may take quite a while before they can get enough money together.

One thing I will add, is that once they started getting allowances, we did not buy toys, CDs, trendy clothes, DVDs, candy and so on except for birthdays and Christmas. That is what the allowance is for. It is important, however, to make sure that you give them enough money that it is realistic to save for the things they want. When DS was old enough that he was asking for CDs every birthday and Christmas, we increased his allowance so that he could save enough to buy an average one within 3-4 weeks and still have a little left over for candy or other misc. If it takes 3-4 months of saving for something as small as a CD, saving for larger items will seem impossible to kids. DS is now 16 and saving for a car. :eek: ;) He is very good about putting half or more of his money in savings, some in church, and only keeping out what he thinks he will need for a few social get-togethers with his friends until the next paycheck.

[RunnerKim]

My daughter is still a little too young for an allowance but I picked up this book

http://ec3.images-amazon.com/images/P/1580085369.01._AA240_SCLZZZZZZZ_.jpg

and really liked the approach it takes. Like many others do, the author suggests having the allowance distributed in designated categories such as savings, charity and free spending. and to match the savings. Actually if I recall correctly all money the child received is divided (percentage-wise) in to the categories - so even birthday money. It's been awhile since I read it, but I thought it did a good job of explaining not just what to do but why it's a good method.

I think I first read it from the library and then bought it to have as a reference. I had read a review of it in a parenting magazine I think.

As to what the savings are for: I don't recall if I read it in the book or not but I plan to have my kids have 2 different types of savings - one will be long-term (college) and the other will be savings for their own choice. We'll have to figure out a process in the beginning to help them decide what and how they can use their savings (probably something with the cooling off period idea) but they'd still basically get to choose to spend that savings on whatever they want.

Kim