JLP’s Question of the Day

Read this column by Jeff Opdyke first and then answer this question:

Should parents allow their children to spend their money any way they see fit?

I say yes and no. Obviously kids have parents for a reason. I think as parents it is our job to steer our kids down the path that we think is best. If I think one of my kids is about to do something really foolish with their money, I will stop them. However, the other side of me says that I should just allow them to spend their money pretty much any way they want to. I mean they tithe and save 25% of their allowance and my wife and I tell them that the rest is their money. If they go and spend their money on something stupid, they will feel the hurt and most likely learn the lesson. That said, I’m still torn on this issue.

I’m really interested to hear what you guys and gals think.

6 thoughts on “JLP’s Question of the Day”

  1. You didn’t indicate the ages of your kids or the amount of money we’re talking about. However it appears you’ve already built in two important values – tithing and saving which implies they’ve also got other important values too. Given that, I absolutely agree that they should be given as much free rein as possible – to make (and learn from) mistakes and to be in the process of becoming independent thinkers. Short of spending money on something dangerous, ie. spending on cigarettes, alcohol, fast cars, fast women, I would not step in but would hope they learn to seek my advice.

  2. Very good article and very smart kid.

    I agree with the editor and think children should be able to spend their own money however they want. Assuming, tithes have been paid (10%), long term savings have been set aside (another 10%), and the money is coming from their “spending” category that was earned and saved 100% by them. IMO, if my daughter had the discipline to save $150 in her discretionary spending account, then she should enjoy the fruits of her labor. I do believe there are two early lessons to be learned that we haven’t conquered even as adults…instant gratification and making wise purchases to prevent buyer’s remorse. The first is learned by requiring your children to save for what they want and the second can only be learned by spending what they saved.

    The only problem with this strategy is my own weakness. For example:

    My daughter can have here eye on something and she’ll start saving for it. However, because she only earns $10/week in allowance and 20% is earmarked for tithes and long term savings, it may take her a long time to save the amount she needs. As a parent, I want her to have the item too, so I find myself making up reasons to give her extra money so she can reach her goal faster. This is counterproductive and the intended lesson learned (instant gratification) may be lost.

    Another weakness I have when it comes to my daughter saving/spending is: Let’s say she was very diligent and saved enough on her own to buy whatever she wanted. After her money is spent, she doesn’t regret the purchase per se’ but she’ll see something else she wants as well. Instead of making her save again for the new item because her money is now gone, I’ll buy it for her. Again, this is counterproductive and the intended lesson learned (wise purchases to prevent buyer’s remorse) may be lost.

    So while I agree that children should be able to spend their own money however they want, the intended lessons learned may be loss due to the parents’ inconsistent behavior. When it comes to my baby, I have issues and I know it. I’m getting better though.

    Great question!

    P.S. can you add a “preview” feature to your comment box?

  3. I didn’t have an allowance at all when I was a kid, and damn but didn’t I find ways to make money quick =) My parents are still surprised I didn’t go into business. I think that having a little set aside for savings is a good idea, but kids don’t really have any long term goals to save for. It’s not reasonable to expect a 9 year old to save significant sums for college or a house or something like that. For them, saving up for an iPod is their idea of what “saving” is – for something big. So I don’t see the problem of draining a savings account for something large. In their mind, an iPod IS a long-term goal, which cannot be reached if you fritter away the money on smaller things. And frankly I don’t see why the article writer got his panties in a twist about the kid saving up a whole lot of money to buy something for his MOM, not for himself! I think that kid has got his head on straight.

  4. Allowances for my 11, 8, and 6 year olds are $21, $12, and $5 per month, respectively. Chores are expected b/c we’re a family–and not necessarily tied to the allowances. My 6-year old tends to spend his $ at Target on toys. (He’s on a “Seatoy” diet: he sees toys and wants them! However, he does periodically give me $15 or so for his 529.

    My 8-year-old is intent on keeping his 529 balance higher than his little brother’s (yeah sibling rivalry!) This week he gave me $247 for his 529. He rarely spends his money.

    My 11-year old is a history and car/transportation buff and is most likely to spend his money on books. At times, he gives me $ for his 529.

    All are expected to bring spending money ($20 or so) on vacation for any of their wants. They also tend to use their money for the “extras” on fieldtrips or arcade situations.

    They are expected to contribute at church.

    Everything else is at their discretion, given personal safety issues.

    The largest purchase ever made was by my oldest when he was 8 or so. He eyed the huge RC Hummer at Sam’s Club and saved until he had the $100. Rarely played with it and ended up giving it to the 8-year old a few months ago (he declined trying to sell it at our garage sale.) As an 11-year old, I’m sure having the $100 now would be appealing, but he learned a great lesson.

    As stated before, better to learn the lessons now than as an adult!

  5. Everyone has made good points.

    For me the answer is “yes” with some exceptions.

    Children should generally be allowed to spend their money as they see fit. Sure they will make poor choices. It’s better that they learn that bitter lesson now while the dollar amounts are small and the consequences relatively insignificant. That’s just part of life.

    On the other hand, they will make some good choices too. My oldest son pledged his monthly paper route earnings to a missionary for one year when he was about 10 years old. I thought he was nuts at first but then realized he was following God’s leading. Why would I thwart that? God provided other earning opportunities for him that year to the extent that he didn’t really miss his paper route money. That’s an invaluable lesson.

    The exceptions are that you should not allow them to spend money on things that are harmful or that might compromise the values you are teaching.

    Finally, it is more important to focus on the relationship you have with your children than the rules for spending/saving. If you have a loving, trusting relationship with your children, then they will seek out your counsel and guidance before making a major purchase. They may not always follow your advice, but it’s important that they see you as someone they can confide in. You’ll be surprised how often they’ll see things your way. I’m not a perfect dad but my kids always come to ask me if important purchases are “wise.” It’s a great opportunity and draws us even closer together.

  6. Interesting.

    My first thought was “Where did a 9 year old get $150 dollars?”

    Right now my children are young, 3 & 5, and all checks that they receive for holidays go straight into college accounts. I think that will continue for large dollar amounts as they get older (grandpa doesn’t really expect my 5 year old to go out and SPEND the 100 he sent, he knows it’s going to college) on the other hand if they get a 20, I will assume that the cash was sent in lieu of a gift so that they can pick out what they want.

    I think that if the kid has really earned the money, they should be able to spend it as they like. I think we all have to learn some hard money lessons. That something that looks cool on TV and we just have to get turns out to be junk, that candy and food don’t really last very long (is transient pleasure worth it?) etc. I’d rather they made those mistakes and felt the pain of it. That’s how they will learn.

    I do think we will talk to them about the money and the choice, and try to show them the relationship between how long they worked and the value of the item (is that toy really worth cleaning up after the dog in the back yard for X number of weeks?).

    I’ve already started trying to teach my children that money is finite, and when it is gone, it is gone. We go to the local store that still has penny candy, and they get 5 pennys and can pick out 5 peices of candy. If they pick 6, they have to put something back. (I know the ladies there must think I’m such a miser!)

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