Kids and Money #3

October 04, 2023

It’s been a little while since I’ve written about this topic.  Teaching kids about money and finance…and everything else is a little tougher than expected.  I don’t know when kids start to understand the concept of money and budgeting but it is definitely later in life than I expected.  I guess that is why they say youth is wasted on the young (This has become my favorite expression because it is so true).  Maybe I started too early with Little Man but I think it’s better to be early than late and the sooner we start the better…generally.  It’s been about 6 months since I’ve written about this, mainly due to deferring the work but also, not much has happened to write about until recently. 

 So, for several months, we would go to a store and he would ask for something and I would ask him if he brought his wallet and he would say no, then I would mention if he wants something he needs to bring his wallet and buy it.  I’ve been giving him his allowance each week and he has been building up money but he hasn’t been interested in purchasing anything.  He has wanted his mom and me to buy things for him but I don’t know if he is hoarding money and not telling us or if he just doesn’t think or care about it.  Sarah and I stick pretty firm to our guns in that we don’t buy him too much just on a whim.  Hopefully, he is learning that lesson.  He does though, as I’m sure most kids do, just say things like why don’t you just buy it for me?  Or, you can afford it!  Well, that is when we try to explain to him that money is finite and we have to use it for the right things and not just toys and wants. 

 For some reason, a couple weeks back we went to Walmart and he said he wanted to bring his wallet.  It was the first time in months he brought his wallet with him or showed any interest in buying something.  He asked if we could go down the toy aisle where he found a ninja turtle toy for $25.  I thought it was a ripoff but who am I to say how much something should cost.  So, Walmart only had Leonardo and Rafael available and he wanted to buy both of them.  I should mention that back in April he had a business fair at school and earned about $45 so he was sitting on about $60 in his wallet.  I asked him why he wanted 2 and he said he wanted other kids to have one to play with when they come over.  Very sweet of him but I thought it was a bad decision.  So, instead of telling him he could only buy 1, I asked him if he wanted to buy 1 and save the extra money and if another friend was over they could play with different toys.  He thought about it for a moment and said that was fine.  

 So, he purchased the toy and brought it home.  I covered the tax because I don’t want to destroy his dreams.  Within 1 day, pieces were missing and in about 2 weeks he stopped playing with it and found something he liked better.  Based on a $1/week allowance, it took him months to get this toy, he got it and then played with it for about 10 hours and then forgot all about it.  I’m sure that some of his friends will use that toy when they come over so it still has some value but not the same level of excitement it brought in the first few days of ownership. 

 I should mention that he just turned 5 years old and has received lots of toys and those have piqued his interest more than Leonardo.  I don’t know how my parents felt when I turned 5 but I think he has WAY more toys than he should.  Ironically, when he goes to other kids’ houses they have WAY more than him so I guess we are good for now.

 The parents that are reading this understand what I am learning which is that one of the hardest things about parenting is watching your children make mistake after mistake.  This also holds true with money.  They have to spend it poorly to learn what is and isn’t a good decision.  At least they learn from them.  Fortunately, this was a small amount of money but it is still challenging to watch.  I think that as we get older it’s difficult to recall what life was like as a toddler and young child in that there are lots of things you really, really want and have the best intentions to use and play with those items and think you’ll have it forever but quickly find something better. 

 As we head into the fall, I’m hoping I can get him to help me with some outdoor chores and potentially earn a little money doing it.  I think consistency is the key and continuing the conversation and discussions around the topic will be helpful.  I will keep you posted. 

Rory Hartmann CFP®

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