My oldest is 10, and he does chores around the house to earn an allowance. He works hard, and we’ve taught him to set aside a percentage for investing (10%), for saving (20%), and for giving (10%). That leaves him to spend 60% of everything he earns.
And spend he does!
He finds it extremely difficult to let his spend money sit and grow so that he can buy something bigger. Instead, as soon as the money hits his hands, he wants to spend it even if it’s a fairly insubstantial amount and can’t buy him much.
He just can’t seem to save up for the things he wants.
Instead, he’s enticed by advertisements. He reads the newspaper and magazines to find free catalogs to send away for, and then he wants to spend his money on any little thing.
His money, his life. I should let him spend the money and be disappointed when he has no money to spend later.
Actually, that’s already happened. When we first moved to Arizona, he saw a 2015 calendar at Costco for $15. This calendar had scenic landscapes of Arizona and was quite pretty. I told him to wait because as 2014 came to a close, he could get calendars cheaper. But he couldn’t wait, and then in December and January, he was disgusted to find how cheap calendars got.
Still, his behavior hasn’t changed.
As a parent, I wonder how much I should interfere.
You see, when I was young, I was just like my son. I spent every Saturday at the mall, my money burning a hole in my pocket. I HAD to buy something, even if it was just a pair of socks I didn’t need. Every week, I walked through the same stores, buying stuff I didn’t need, just like my son buys the stuff he doesn’t need now.
However, my mom never stepped in. She gave me a wide amount of freedom. Whatever money I earned was mine to spend how I liked. She didn’t even ask that I set aside a portion of it for savings.
I was a responsible kid and bought my own car, paid my insurance, paid for gas, and also bought my own clothes. I think she figured that I was handling my money well, so it was up to me to decide what to do with the rest.
When I was a teenager, my friend and I used our money from our job to go out to eat and see a movie every Friday. Sometimes we’d go out to eat on the weekdays, too.
What a waste!
Imagine if I had instead invested just a small portion of that in a Roth IRA. Or if I had saved it to pay for part of my college education. Maybe I wouldn’t have graduated with $25,000 in student loan debt.
Even now, I have a hard time saving, though I am getting much better. I’m finally able to stick to a budget and make saving a priority. It’s taken me 40 years to break bad spending habits that I learned in childhood. Let’s be honest, getting a hot deal isn’t really a deal if you don’t need the item and it robs you of the ability to save.
I want to teach my son this lesson now, so he can be more financially responsible than I was for many years. But that lesson is oh so hard to teach.
How much do you guide and interfere in the way your child chooses to spend money?
For More Great Reads, consider checking out Kidwealth.com and kidsaintcheap.com.
Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.
Oh Melissa, I know how you feel. We have a sixteen year old who is fully used to managing his own budget (he’s done so for 8 years). When he turned 16, the amount of his allowance took a dip to account for money he could now earn on his own. After he had a job, he was Daddy Warbucks, treating his friends to dinner, buying lavish gifts and driving us nuts with his overspending. It was tough. In the end, however, this only lasted a few months until he realized he really wasn’t as rich as he’d thought. We had a talk with him at one point to help him get back on track (knowing teenagers brains can never be fully accountable for some of the dumb mistakes they make) and he agreed he needed to set up a budget for the money he earned on his own the way had managed when it was his allowance that was budgeted. Happily, all is well again. Just in time for the next kid to turn 16 and re-start the cycle! 🙂
I love the idea of withdrawing a month’s worth of income and showing that to kids – what goes where and how it’s divided. The one thing that I’ll try to teach my (unborn) kids is that $1 spent on something is $1 that could have been spent on something else. For example, if they want to spend $5 on ice cream – I want them to understand that 10 ice cream purchases could have been used towards a new video game. Only time will tell if I’m successful.
The one thing that my dad taught me – for which I’m forever grateful – is that money can work for you (not against you). He explained that he was making money while he was sitting on the couch, mowing the lawn, etc. because of the choices he made. He decided to let his money work for him.
So true! We are trying with my son and he is only 5. We are in the process of buying a house(well in 6 months) right now we are saving for the down payment and closing costs. We were at a store the other day buy my son some much needed jeans. we were paying for them when he says ” well, I guess we wont have that money for the new house” lol
Hi Melissa, great article and thanks for sharing your concerns. I think the difficulty that you are facing is solely due to the fact that you feel unsure of how to approach your son since no one actually approached you when you were young. Deal with it in a matured way and make your son your friend, explaining that it is perfectly ok to do what he is doing but there are better alternatives waiting to treat him with a better future. Show it to him how valuable he is, and how valuable his youth, energy and time is. I am sure he will understand when treated in a friendly way.
Hi Melissa, I am a financial expert and I was so overjoyed to see these advices come from you. It is indeed heartwarming since many of us experts also have a hard time teaching our kids how to draw the line on individual spending. Great job. Cheers!