Counting the Cost

"I, too, have a hard time watching my children spend money on something I think is not worth the cost. I will counsel a child regarding how long it took to earn the money for the proposed item or compare the cost of the item to other possible purchases. Then we encourage the '24-hour rule' which requires the spender (parents included) to think and pray about this item and its cost. Then the decision is up to the child. If the purchaser still wants to make the purchase, the next time we are out and about, the purchase may be made. Sometimes children make a decision I agree with, sometimes not, but I look on this time as a learning period; I would much rather they blow their current $15 dollar wad on some thing they might later regret than have them blow a much larger wad sometime down the road. And, if the purchase turns out to be dissatisfying to the child, it is another opportunity to discuss, analyze, and help the child grow in making wise purchasing decisions." ~ Danielle

"I would suggest you let her make her own choices (and possibly mistakes) NOW. If you continue to remind her that she can get an item cheaper somewhere else, she will be getting the message. When her money runs out and she'd like Object X, remind her that she spent her money on whatever, and now she'll need to save it up. I, too, give my boys (ages 10, 7 and 7) money to spend on their own and I have to force myself to keep my mouth shut and let them learn on their own. They give an amount to church and savings, but after that it's theirs. My theory is that it's better to make mistakes with it NOW, than later when it really matters." ~ Connie

"You might want to consider how much your daughter is earning for chores. If she has $25, perhaps you are overpaying her. (Of course the $25 could be a gift, and that's an entirely different story.) A child that young doesn't need much money. (My teenage boys get $10 week for completing all their chores.) Make it a practice of waiting a week before deciding on a purchase and actually making it. When my boys were younger, they had to tell me at least 2 weeks before purchasing something. And no, I still didn't necessarily agree with the purchases, but I gave them ample time to think about them (usually they saved their money for specific purchases). Sometimes they changed their mind--usually when something different came along that they wanted more--then the wait started again. Now they are teens; I have one that will hardly spend a dime for months at a time and one that rarely has more than $10 in his wallet (he's older and has a busier social life). It was fun to see and hear their comments a few days ago when I told them that the entire dinner we were eating (sticky chicken, rice, gravy & broccoli) only cost about $2. (chicken leg quarters were 29¢ a pound) They were shocked-- it cost less than a school lunch.

Stay out of stores where your daughter will be tempted to "blow" her money.

You can teach her the basics, but 6-year-olds aren't mature enough to really understand the the whys and the hows of frugality." ~ Valerie

"Sounds like you are doing the saving, giving, spending for her. We do it with our kids as well. One thing that works it find something she wants say a bike for example. 10% goes to giving, 60% goes to savings (to be saved) and 30% to spending, or really any amounts you as a family decided. Then set a goal: "Ok we need $50 for the bike. Only the money from the 'spending' money gets used for the bike. The savings is just that: savings. (I.e. maybe a car, drivers ed, college etc, much much bigger things in life, no matter what age the child is at, prices don't come down!) Then let her know that each time she chooses to spend money on the stuffed bunny, it will take that much longer for her to get to have that bike.

She is still getting the concept of saving, giving and spending, but also the use of goals and delayed gratification! Today's kids do not have any idea what that is. There seems to be such a 'give me' attitude. You need to be firm. 'If you spend $15 on that it will take you 3 weeks longer to get your goal,' etc. Teach her that each time you go to the store, you don't always get something. It is hard I know, but it works. My now 15 yr old learned a long time ago you are not going to get so stop asking. nNw she only asks when she really needs and she is getting better with her spending.

Yes, as a parent it's hard to watch them just spend on 'whatever' only to forget about it, but they need to learn. We got a Larry Burkett bank for all of our kids and we control the opening cards, so they cant just withdraw anytime they want. They need to understand needs vs. wants.

Dave Ramsey's steps has helped us as adults and his principles work for children just on a smaller scale!" ~ Linda

"I'm 28 and have 3 little boys (ages 4, 3, and 1), so this doesn't come from my 'mom' perspective but from what my mother did with me and my brother and sisters growing up. We never had any money. My father did construction so each day was an unknown as to whether there would be any work or money or food, etc. Anyway, so we grew up shopping at discount stores, Goodwill, and yard sales. When I got old enough to earn my own money by babysitting or doing odd jobs for neighbors at first I was tempted to and did blow the whole amount on one or two big ticket items. Several lessons that my mom taught me stuck with me though and helped me understand the real value of things and what the difference was between needs and wants. One thing my mom did was to play shopping games with us where we would use pretend money to buy things in the house. Out of everything that was 'for sale' she would always have something out of the ordinary that was a lot of money. For instance I remember there was a clown doll that my grandmother had made priced at $25. When I asked my mom why that cost so much compared to all the other dolls and bears she would then tell us what the clown doll could do or how 'special' it was, etc. She would then say something like 'So, you can either buy this one toy, or you can buy 5 or 6 other things.' This wasn't the only thing she did with us though. There was a rule, that even though it was our money to spend, there were certain limits to what we could buy. If I wanted to buy something that I already had more than one of, I was supposed to get rid of one to make room for the new one. So if I wasn't willing to part with any of my dolls or puzzles or whatever, then I needed to buy something else. Looking back I can see that this was a good way for my mother to help control the amount of possible 'messes' that were being brought into the house as well as teach us kids about spending money and self-control. I wouldn't say I learned everything the first time, and some of these lesson were learned in retrospect, but I think it's okay to apply some rules for your daughter without feeling like a controlling parent. I believe that children should earn their freedom and responsibilities, but also with guidance and teaching from their parents." ~ Katherine

"Being only six years old, she does not have the ability to know the entire value of the dollar. We should not make the mistake of expecting her to behave like she is ten or older. It's not her fault that she doesn't know that all stuffed animals are made the same and you can pick up the same thing cheaper at another store. If she is receiving money at that young age perhaps half to three-fourths should be placed in a bank account. If the goal is to raise a financially responsible person, starting out shopping with $20 at the age won't help. Take the money out of the card, hand her six or seven dollars (an age appropriate amount) and put the rest in the bank. Both of our children have had jobs since they were 7and 8 yrs. old. They worked on a fruit farm with me and I gave them a small portion of what they earned for the first few years. They learned that the money went for the gas to the stores and places they enjoyed, groceries and snacks for activities, and we chose in the beginning of the season what we were to spend the money on: a trip or purchase etc. Now in their young adult years they are more responsible and much kinder with their money than most adults we know. If I'm out of an ingredient or have a need, both offer to pay for it instantly. When they mention something big, we joke, 'That's a lot of berries!' and they immediately laugh and think of how much the would work for it." ~ Tina

"Dave Ramsey has excellent programs for children. www.daveramsey.com" ~ Bonnie

"You have to realize that to a kid that bear might be worth it. I doubt you would see her blow thousands of dollars on a ring but most of us are married to guys who have." ~ Sandy

"I don't have kids, so take these ideas with salt, but it eems to me that teaching her is like teaching any impulse spender:

-- Have her wait a certain length of time to see if she still wants the thing

-- Have her think of a number of other things she can do with the same amount of money that might be more fun.

Check out ideas for curbing impulse spending." ~ Frugal in Ottawa Ontario

"Since Lydia is donating to the church and also putting money into savings, I think the remainder of her earnings and gift money should be free to be 'wasted.' She is only six and what you consider a waste of money probably isn't to her. She sees something she wants and she has the money, so why not buy it? But I have a caveat to letting her have the remainder of the money. I don't know how much she gets in gifts at any given time, or how much she earns, but perhaps you could set up a rule that after the deductions for charitable giving and savings, she must keep the remainder in a 'special account' (you can keep it for her) and withdraw no more than $5.00 per week. This way, if she sees a $20 doll that she wants the first week, you can remind her that she only has $5 now and must wait until she can withdraw the remainder. She may learn to wait, or she may just spend her $5 each week on things you believe to be a waste, but she needs to learn that SHE has control over the money. (This is why I prefer an allowance for children - a set amount that they gradually learn to budget much the way we - hopefully - learn to live on our salaries).

It sounds as if you are often shopping (even if it's yard sales and thrift stores) and you may be role-modeling a spending habit. She is too young to realize that you are shopping frugally, too young to understand things like comparing prices, budgeting, etc. And even though you may be buying necessities or gifts for others, all she is seeing is that you go out and spend money and she wants to do the same thing.

I can't stress enough that she is only six years old and doesn't really understand yet about money and how to control her spending. She'll spend all of the money she has at her disposal because she thinks that's what you do when you have some! In a few years, when you feel she is old enough, include her in some of your buying decisions and let her know how you decide what you can afford; let her know how much money you allocate to, say, groceries and how you decide which items to purchase, etc., and let her help you to make those decisions. For now, tho, just limit how much she has at her disposal and let her be a six year old." ~ KL

"This is a topic that drives me crazy too. We have three teenage boys. (16)(15)(15) Since they were probably 10 or so we offered whatever money they put in the bank, we would match up to $100. In all the years leading to now, collectively, they've put in about $100. I can't understand why they wouldn't take advantage of this opportunity. Their savings account have been the same for at least two years. They have no problem tithing since they see $1 as easy. I finally stopped giving one son his $5 allowance as I would cringe when he would spend the whole $5 to try to get the stuffed animal out of the crane machine. I know part of it is out of my hands as they will soon be in the employment line. I'll keep my end of the bargain then too. Any suggestions for books to maybe help teens understand the need for saving would be appreciated." ~ Kathy

"I would recommend you read the book, Debt-Proofing Your Kids by Mary Hunt. It's a fabulous resource and it's written based on first-hand experience. Another good resource is Money Doesn't Grow on Trees: A Parents Guide to Raising Financially Responsible Children by Neale Godfrey." ~ Nancy

"I think we can present proper money management strategies to our children and teach by example, but must step back and allow them to spend their money as they please and learn their own lessons along the way. I got my children as teenagers. The older one was quite a spendthrift and the younger one saved every penny. The older one eventually married a woman who knows how to manage money and he has mended his ways. The younger one is still single and leads a very nice lifestyle, using his money for what is important to him (a doctorate and travel) while forgoing what doesn't really matter to him." ~ Alene

Editor's Note: Thanks to these subscribers for taking the time to respond.

...of Good Stewardships of Your Money and Resources

Talk It Out:
Teaching Children to Manage Their Money

Responses:

...of Good Stewardships of Your Money and Resources

Talk It Out: Teaching Children to Manage Their Money

Responses:

Talk It Out:
Teaching Children to Manage Their Money