[Jodi]

How do you teach your kids about the important money mindsets for a successful financial future—specifically when they have their own money they want to spend and want to spend it on something silly.

We regularly discuss the importance of making smart financial decisions and really understanding the value of small purchases/how they add up in the big picture.

We save each month for our family’s future and try to have open conversations about financial choices.

However, it seems like every time I turn around, my kids are asking to buy fake money on video games or upgrades on their games.

They each have their own accounts with money (birthday, odd and end ‘extra’ chores).

I feel like this is a waste of money so I often say ‘no, you don’t need that” but they continue to ask about it day after day.

Part of me wants to hold strong in my decisions when they bring stuff like this because it really is a silly thing to spend money on, but the other party of me wants to maybe just let them spend every $ of THEIR money on silly things and we can use it as a life lesson.

Thoughts?

[Zack]

Let them. But have the convo every time. And everytime they don’t have money for something else becuase they spent it on something you think is a waste have the convo again.

Kids need to learn the hard way and with their hands.

[Jake]

Let them manage their own cash. Yes, physical cash only. Let them make mistakes.

Suggest best use and division.

Don’t force.

Let them make mistakes and be disappointed by them now, not when they are adults.

You can always fund a Roth for them equal to what they earn and not tell them until they are 18

[Lauren]

I feel like the entire point of allowances etc. is for the kids to spend 10 years wasting them and making stupid decisions so they’ve figured out it’s stupid and they could have bought a (used) car or whatever by then, before they’re making decisions with tens or hundreds of thousands of dollars.

You definitely want to be kicking 8-year-old you at 22 rather than kicking 24-year-old you at 38 (or, even worse, 38-year-old you at 52) because the absolute value of the $$ is much lower.

(This is still academic for me, though.

My oldest is 5 and has had an allowance for a few months but doesn’t seem to really care about buying things yet.)

[Stacey]

I have a teen and we sat back and watched as they spent $300 one week on Starbucks, Crumbl cookies, Panera, etc…

And the next week when she needed some money for something, too bad, so sad

*That* was better than anything I had ever said about spending/saving money.

[Jessica]

You split it up. Every time they get paid.. a certain percent goes to savings, a certain percent to giving (if you do that) and a certain percent they can spend what they want.

That spend money..

they can choose whatever they want to spend it on even if you think its stupid or a waste (as long as it isn’t dangerous obviously).

But once its gone, if they don’t have money for the next thing..

they have to feel the emotions of not having money for it because of their choices.

[Megan]

How old are your kids?
Early on it’s about understanding choices. It’s okay to buy “silly” things.

That then also comes with having less for the next want.

Do you have a budgeting and tracking practice?

Is that scalable to kids?

[Trevis]

I don’t have kids but I am a life long gamer who had no good role model for finances for most of my formative years

(a minor grip considering I had and still have two parents who love each other, and me!)

Anyway, yes micro transactions are table stakes these days in games.

It’s prolific and very different from when I was younger.

Seems like this is a teaching moment to get them to manage their own funds and decide what brings them joy so that they can focus their spending on that and make real compromises.

I’d be afraid that if you always tell them no to things that make them happy that it will cause them to resent not getting to have those things so they won’t learn the most important lesson, which in my humble opinion is, spending on what makes you happy and cutting on areas that don’t.

[Tia]

Have them save (and give) a certain percentage and let them spend the rest.

I have a natural saver and another who will say “cool, I found a quarter I wonder if they have one of those machines around”.

[Ash]

I think it’s easy to see transactions in video games as a waste of money, but as a gamer myself, sometimes these things bring joy.

Everything in moderation! If playing games is what they are into, a few dollars here and there isn’t any different than wasting money at an arcade or going to the movie theater, etc.

[Athena]

In my house I have a very basic rule wth my kids. If you NEED it, I buy it. If you WANT it, you buy it.

It really helps them understand the difference between wants and needs.

I don’t ever tell my kids what wants to spend their money on if they want it and they have the money they’re allowed to buy it.

If they run out of money and realize what they bought was a waste that’s an important and valuable lesson that’s necessary in life.

[Damon]

I think it’s normal. Our kids all have accounts they can use for random expenses (separate from investments/college funding).

They get allowances and they know their account balances.

We might suggest not to blow it on something silly, but at the end of the day it’s their decision.

I find that it works well because inevitably they will want something else later and they will have no money for it.

That’s good for them to understand that they have to make better financial choices.

I see the kids make better decisions than when they purchased things with “our” money.

[Katherine]

We let them make purchases of their choice, with their money. We have limited the amount of money they can spend on some things, for example – in one day at the arcade…

with discussion.

like do you really want to emty your piggy bank?

We make them save portions of their birthday money.

[Reannah]

How old are your kids?
I’d say help them – something like creating a solid savings account with their money that a set percentage goes into when they’re gifted and giving them a spending budget.

Whatever their spending on from their spending budget is up to them, whether you think it’s silly or not.

It’s important to them at the time. But talking to them about choices is good.

Ex: Hinting at purchases they might like to save up for to help them plan.

Another tactic is after a month or two, add up their “frivolous” spending and talk with them: Did they know it was that much?

What else could they have purchased for that amount?

Are they happy with their choice? Why or why not?

[Charlotte]

Ideally they should learn how to be smart savers, yes, but also thoughtful spenders and generous givers.

Just because you see something as a waste doesn’t mean they see it the same way.

You are not a kid and don’t have the same desires and wants as they do.

I would go with the “you can afford anything, not everything” concept.

After saving and giving they can prioritize things to spend on, but they cannot give up saving and giving, and spend everything.

[Amanda]

I’m letting them make some (small) mistakes now and feel the pain of their decisions now so they hopefully don’t experience the big mistakes later.

Example: my kids are 6 and 8 and had to have these horrible stick on fake nails they saw at Target.

They cost $8 a pack and last less than a day once put on.

I told them I was not purchasing them because it was not a good value for the amount of wear they would get, but that they could spend their own money if it was that important to them.

They lasted less than 12 hrs before they lost almost every nail; they immediately told me that they regretted spending money on them and would not be purchasing them (or asking for them) again.

I think it was worth far more than the $16 they spent to experience this lesson.

I’m sure it won’t be the last, but I’m happy to start building that foundation with them.

[Rick]

I am big huge fan of two things
#1 model the behavior.

Show them picking meat that is on sale, choosing two shirts on sale over one expensive option, buying “value”meals like a pizza for the family instead of 5x Chick-fil-A meals.

#2 let them fail. Miserably. Hilariously.

Social media gone viral level.

Serious failing.

Yet be their backstop.

Be their safety net. For now. When they are tweens.

While they are teens. And then it ends.

Stop helicopter parenting.

Let them fail and splat as young adults. Do. Not. Help.

They need to fail first and then fail without help second.

Most of you fail at the second and it shows with your struggling “kids”.

[Author]

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