When Kids Spend, Spend, Spend and Want More, More, More
Never spend your money before you have earned it.
—Thomas Jefferson, former U.S. President
“Could I get five bucks?” “A twenty?” “I need money for this.” “I need money for that.” As a parent, you hear these pleas from your children. Some ask for money more often than others, but all kids ask. How can you help your kids live within their means? How do you help your kids avoid overspending? How can you teach your kids not to pester you for money so often? Consider these ideas.
Tips for . . .
- Spending is the number one money-related topic among parents and kids, according to Search Institute research for a major corporate bank. Both parents and kids struggle with spending, overspending, and the desire to get more money. It’s a common tension in almost every household.
- Be intentional and consistent about money. For example, start a weekly allowance that provides the same amount of money each time. Be clear about what you will and will not pay for—otherwise kids will think they can ask you to pay for everything.
- Encourage family members to slow down their spending. For example, if your son gets a gift card or earns cash, try to get him to hold on to it for a while. Help him develop ways to save and to be more intentional about what he spends his money on.
- Talk about money with your kids. Which spending, saving, and giving strategies help you manage money well? Where have you made mistakes? Each year, Capital One, a Fortune 500 financial services provider, publishes a study on back-to-school shopping and how parents and kids deal with money. Every year, the company finds that families need to talk more about money, not less.
- Model savvy spending habits. When you get upset, go for a walk instead of going shopping. Don’t spend more than you earn.
- Teach your child how to keep track of money coming in and going out. For young children, this can be concrete: If you can see your money, you have some. If you can’t see money, you’re out. Have teenagers keep track of their money through a savings account, a checking account, or by creating a budget ledger that shows how (and when) money comes in—and goes out.
- Encourage family members to give money to a worthy cause, such as a food bank or a charitable organization they support. Talk about the value of spending money to help others.
parents with children 5 and under
- Create money boxes for your young child. Make three boxes: one for spending, one for saving, and one for giving. Each week, give your child her allowance in coins that slip easily into each box. For example, if you give your child a dollar, have her put one dime in the savings box, one dime in the giving box, and eight dimes in the spending box. This gives young children concrete experience in dealing with percentages.
- Help preschoolers learn how to recognize different coins. Pennies are easy: they’re a different color. Show them how a nickel has a smooth edge. Talk about how the big coin (the quarter) is worth the most—but expect kids to take a while to remember nickels and dimes, because it can seem illogical that a dime is smaller than a nickel, even though it’s worth more.
- Teach young children that once money is spent, it’s gone.
parents with children ages 6 to 9
- Talk about advertising and how it influences us to spend money. Some parents teach kids to turn off TV commercials (or put them on mute).
- If you haven’t started giving your child an allowance, this is a good time to start. It’s better for kids to get used to receiving money on a regular basis so that they can practice getting, saving, giving, and spending money.
- Help your child learn how to save. If your child wants something expensive, show her how she needs to save a certain amount of money each week. Don’t get her in the habit of buying something and then paying you back. Teach your child to save, wait, and then spend when she has enough money.
parents with children ages 10 to 15
- At this age, kids often start wanting more and bigger things. If they want to earn money, create jobs for them to do around the house, or connect them with a neighbor, grandparent, or other adult who may have small jobs, such as mowing the lawn, washing windows, babysitting, or weeding a garden.
- Introduce teenagers to adults who have solid financial skills. Ask the adults for tips they’ve learned for managing their money well—and some of the traps to avoid. ** If you would like your young teenager practice to practice using a debit card, you can get your child a Visa Buxx debitcard, starting at age 13. Both you and your teen can monitor how your teen uses the card, and you can always put a “stop” on it if your teen misuses it.
- Encourage kids to save money by placing some of their funds in a safe place, such as a savings account, a piggy bank, or a wallet that is meant only for savings.
- To encourage kids to develop more school spirit, offer to pay for school activities, school T-shirts, school dances, and other school-sponsored events. If you expect your kids to pay for these items, they’re more likely to choose other things to spend their money on, such as on food and entertainment.
- When kids spend too much money on frivolous things, ask questions such as: “Instead of spending all your money on junk food, is there a way to cut back and take a snack with you from home?” Or, “Instead of buying all those iTunes songs, does the library have any of the music on CD?”
parents with children ages 16 to 18
- If you expect your teenager to pay for part or all of her further education after high school graduation, be clear about that and look together for ways she can earn that money. Don’t wait until the summer after graduation to overwhelm her with unrealistic financial expectations.
- If your teenager has a part-time job, encourage him to spend only a portion of his earnings. Find ways to help your teenager save and give money to worthy charities.
- As teens get older, gradually introduce other money skills, such as having a checking account, a credit card, buying stock, or starting an IRA. For more ideas, visit MoneyInstructor.com.
- Learn to let go. Older teenagers need to manage their own money. You can still make observations and suggestions (and it’s helpful to keep doing so), but it’s also essential to let teenagers make their own money decisions.