Comments on: How “Hands Off” Should Parents Be In How Their Kids Spend Their Allowance?

By: Chicago Financial Advisors » Blog Archive » 6 Ways to Increase Your Kids’ Financial Intelligence

Fri, 12 Dec 2008 16:14:46 +0000

[...] idea comes from a post I read at AllFinancialMatters.com asking how hands off parents should be. If you think your child is making a mistake with the discretionary portion of his allowance, [...]

By: Jack

Jack — Tue, 31 Jul 2007 03:47:24 +0000

donny. you’re right about gamefly. our family uses them and we’d never go back to buying where the kids just grabbed games without any thought for how much it cost or how much they really wanted it. we pay for the account but they manage it mostly. we set the parental controls to limit them the games rated for their age group and away they go.

my wife and i play too but we usually just play whatever they get. they’ve learned to manage the queue and work together to fill it with games they want to play. and now have to actually pick the game up off the floor when they’re done with it and put it in the mail if they expect to get another. so great!

thanks for bring them up. here’s their url if anyone is interested in trying them out. as head of a gaming family, i highly recommend them. http://www.gamefly.com.

By: ScottC

ScottC — Fri, 27 Jul 2007 06:33:44 +0000

Speaking of kids and allowances, here’s an amusing comic showing how many of us (kids and otherwise) think of our priorities:

http://beingfive.blogspot.com/2007/07/saving.html

By: ScottC

ScottC — Fri, 27 Jul 2007 01:47:33 +0000

The responsibility of the parent here would be to make sure that the kid is aware of the options.

As teenagers, they have to start learning to look out for themselves and make their own choices. You can help them do this without violating parental trust.

There are several times as a kid that my parents let me make my own screwed-up choices. I’ve thanked them numerous times for that.

By: Esmo

Esmo — Wed, 25 Jul 2007 21:33:13 +0000

Make sure you don’t relent after letting him buy the DS game – he needs to realize that there is finite money and he has to make decisions on what to buy. Otherwise, he’s going to grow up spending willy-nilly, and no parent wants that.

By: Donny

Donny — Tue, 24 Jul 2007 16:22:51 +0000

Another idea might be to get your kids a Gamefly account and have them split the cost or share a portion of it. It eliminates the impulse purchase scenario completely and teaches your kids some financial responsibility as they actually have a bill to pay each month.

Gamefly works the same way Netflix does and they carry video games across all platforms so your kids can rent whatever they want and send it back when they’re done. No late fees, no time limits. If they really like something they can opt to keep it and get it at a significant discount from Gamefly who will also send them all the packaging and manuals so they’re getting everything they would if they bought it new. They just get to actually play it before they own it.

With what games cost these days it’s the only way to stay on top of all the hot new stuff without going bankrupt. Not to mention avoid $40+ impulse purchases that more often than not end up gathering dust after a few days. Another nice feature is that you can set up the account with parental controls so your kids can’t get their hands on the mature stuff. It’s a money saver, totally eliminates the scenario in the store you described and you can effortlessly monitor what your kids are playing by setting up your account with limits.

By: fivecentnickel.com

fivecentnickel.com — Tue, 24 Jul 2007 15:39:34 +0000

We don’t allow impulse purchases of this sort. Our kids can spend their money on whatever they want (within reason, of course) but they have to go to the store with the intention of buying it. So if they’re in the store for some other reason and see something cool, they can buy it *next time* we’re they’re if they actually remember it, still want it, and bring money along next time we’re there.

When you go back n the 24th to get the game they really wanted, you can remind them (nicely, of course, not “I told you so”) of how it wouldn’t have been possible if they had bought the DS games.

By: JLP

JLP — Tue, 24 Jul 2007 14:24:32 +0000

Hammer,

I think that’s a perfect example of when a parent should intervene for the well-being of the kid since their decision could eventually affect your finances (filling cavities).

By: Hammer

Hammer — Tue, 24 Jul 2007 14:17:05 +0000

What about the situation where your kids want to spend their allowance on candy? This is a constant issue that arises with my children. They would nickel and dime every penny of their allowance on sweets if we don’t intervene. But at the same time I want them to feel like they can spend their money how they want. The best solution I can come up with is, “You can buy it but you can’t eat it.” If anyone has a better idea I’m all ears.

By: JOhn BoB

JOhn BoB — Tue, 24 Jul 2007 13:07:12 +0000

I let my 15 year-old waste his money however he wants, he’ll learn from his mistakes. I will usually let 10 year-old make small mistakes, under $20. I make my 4 year-old carry the toy around the store for a while, but if I really think it is a bad decision I will veto his decision but explain it to him.

In general, as they mature I exercise less control. However, I think the most important think is that they see me and their mom make the same wise decisions. There is nothing better than a good example.