Thoughts on daughter's spending

[disneysteve]

How does she have such easy access to it that she is already forming the thought that it can be sold on ebay if she doesnt want it?

Develop a list of what a good purchase might be, better purchase, and then best purchase

Dad is a big-time ebayer, so she comes by it naturally. I will get her more involved in the process,though.

She already is well-acquainted with shopping store brands vs. name brands and we regularly shop at yard sales and thrift stores. All of her jeans come from the thrift store and she's bought books, toys and games at those places many times. I think she's pretty set that way as far as understanding a good deal and knowing how to compare prices.

Why not work up a schedule of slowly adding in small necessities for her to purchase? You can also add in a schedule of allowance raises, but to loosely quote a proverb - "to whom much is given, much is required". That way you will still be providing necessities for her (in the form of your money) but she has to use her brain to start figuring out where to put it, what to buy, and why sometimes, for instance, the cheaper shampoo has to be bought instead of the hyped up overpriced smelly type.

This is exactly what we've been talking about recently. She's getting to the age where the line between wants and needs starts blurring. Yes, she needs clothes but there are basic clothes from Target or Goodwill and then there are snazzy threads from Limited Too or Aeropostale, so we will start having her contribute to things that are beyond what we feel are necessities.

[Broken Arrow]

I agree, but I think that the money has to be earned somehow (over and above regular chores).

I think that's one of the the general conclusions the last time this subject came up.

Speaking for myself, I'm a divorced, part-time father, so I think that can skew things a bit. Also, I don't really expect my youngest (who is 6) to do much right now. So, chores is good enough for me. The oldest, on the other hand, really has to go out of his way to work for his money.

But in the end, I don't really know. My child doesn't seem to get it (yet) either.

[Ima saver]

I started working at age 12. I already knew I wanted a car when I turned 16, so I started saving for one at that age.

[LivingAlmostLarge]

Steve, one thing my parents gave me was a set clothing budget at that age. Say something like $250 for the entire year for me to buy my own clothes and budget with. I had fun looking at clothes with my mom and we looked at walmart, thrift stores, and full price if it was something I really wanted.

It wasn't really because of money or for working for it, I could earn extra by washing cars, picking fruit, etc, but this was to teach me budgeting and delayed gratification. That if I wanted my cute jumper I needed to wait or find it dirt cheap.

I think I was around 12, plus you know getting a fancy hair cut instead of the $10 cut or something! Or getting my mom to dye it for me using the box instead of professional dye or something. Just stuff like that will also help the learning curve of money.

Also DH learned don't ever loan $$$ to his mom. Goes to the "Mommy bank" to never come out. That makes him extremely uncomfortable now to "loan" people money because of the bad habit his mom made of taking his money.

I don't like a lot of the "Frugal" methods his parents used to teach wastefulness. I think it taught stinginess and meaness rather than being frugalness and carefully managing their money. It was sort of like it's okay to cheat your child of their allowance. And that by not giving them money it's encourages shoplifting and other bad habits. I'm not saying that DH was perfect, but his parents poor influence did not help. By not giving a child any money you encourge them to look for other means to "fit" in.

And yes he worked, since his dad took him on late night computer networking calls so he wouldn't have to pay an employee. I still am angry about that. And my MIL did "Lose" my BIL's money and she offered to repay him, but it wasn't a sincere offer.

[Ima saver]

I also had to buy my own clothes and that taught me a lot too.

[smokey0066]

I would suggest you keep an open line of communication on the value of the dollar. I think that is what helped me as a child. My parents were very open about finances of the home. Of course I was always told this was private and we only spoke about this stuff within the family. Knowing the finances at home gave me a sense of ownership in the family well being. This included helping save money for the family and watching the spending. You could argue this makes you grow up faster but it really helped me understand that just because I wanted something doesn’t mean it’ll fit within the family budget. I’m not sure how willing you are to share this type of information with your daughter but getting them involved with saving and showing them how it helps the family might give her a better sense of understanding the value of a dollar.

I will say I’ve been working since the age of 12 or so and actually bringing home money. Every paycheck I received I gave to my mom who put it away for me. I never really kept track of this but trusted my parents to this task. My sister was the same way. We both saved up quite a bit of money with our parents, if I remember correctly there is roughly ~$5k with them now between the two of us. There have been occasions where our parents borrowed the money and both my sister and I agreed since it was in the interest of the family, such as down payment for buying a car. The point is that you shouldn’t teach kids to be so frugal that they hold onto everything with the mentality that it’s “MINE.” My parents still have that chunk of money and my sister and I could care less. In fact we were talking a few weeks ago and they brought up the fact that our savings were still with them but I brushed it off. I make plenty of money now and will leave that money with them.

[LuckyRobin]

One thing I would consider is having her wait at least six months before making any purchase over a certain dollar amount. A lot can change in six months. Other friends may buy the item and find out it easily breaks. Or they may tire of the item because its not as much fun as it was, in which case she can decide if she still wants it or not and perhaps buy it discounted from said friend. Or she may just not be interested in it once the waiting time has passed.

The question I have for you is: Is it possible she gets too much disposable allowance? How is it broken down? Is she expected to tithe or make charitable donations out of her allowance?

My daughter is almost eleven and this is how her allowance is broken down:

$20 for a four week period (of $5 a week)

$12 disposable allowance
$ 2 tithe/charity
$ 4 long term savings account in credit union (matched at 25% and not to be touched)
$ 4 short term (vacation spending money or to buy b'day presents for friends) savings in piggy bank

If she does not tithe or make charitable contributions perhaps it is time for her to choose a charity and start channeling 10% of her allowance there. This is the perfect age to learn about giving back.

[disneysteve]

I would suggest you keep an open line of communication on the value of the dollar. I think that is what helped me as a child. My parents were very open about finances of the home. Of course I was always told this was private and we only spoke about this stuff within the family. Knowing the finances at home gave me a sense of ownership in the family well being.

DD has been balancing our household checkbook for about 2 years now. It started as a math exercise but it doubles as a teaching lesson about the costs of running our household and family. She sees what the bills cost, how much income comes in and where it goes.

[Ima saver]

Now that is a smart thing to do!!

[LivingAlmostLarge]

Wow your open. I still don't know what my parents make, they hide everything. Sigh.

[disneysteve]

Wow your open. I still don't know what my parents make, they hide everything. Sigh.

That's probably more common, and then we wonder why kids go off to college and get into debt trouble.

As I've said, our daughter is quite well-educated on personal finance for her age (for any age for that matter). That's why I'm not terribly concerned about her current spending, but if there is something I could fine-tune, the sooner the better.

[scfr]

Since I have no children myself, I'm the last person in the world who should be offering advice on this! But I do remember reading a really great bit of advice in a Dear Abby (or something similar) column about kids and trends. The letter was from a parent whose teenager wanted to get a tattoo. Abby (or whoever) suggested that the parent pull out a picture of the child taken about 10 years prior, and ask the child how they would feel about wearing the clothes they were wearing in the photo at the present time, and every day for the rest of their lives. Her point was that preferences change, but tattoos are forever.

I'm sure there would be a way to apply this lesson to purchases. Perhaps take your daughter to the clearance section of a toy or electronics store where things are about 25% of original retail because they are yesterday's news. Ask your daughter if she would want to pay the fulll, original retail price today for last year's trends. When she says "NO" point out that in a year or two the same things that she wants to buy today are going to be selling for a fraction of what they are now, and she's probably going to want nothing to do with them. (And if she still wants them in a year or two, she can get them at a really great bargain price by waiting!)

Or ... Why not see if she can call in to the Suze Orman show and ask "Can I Afford It?"

[disneysteve]

Since I have no children myself

Perhaps take your daughter to the clearance section of a toy or electronics store where things are about 25% of original retail because they are yesterday's news. Ask your daughter if she would want to pay the fulll, original retail price today for last year's trends. When she says "NO" point out that in a year or two the same things that she wants to buy today are going to be selling for a fraction of what they are now, and she's probably going to want nothing to do with them. (And if she still wants them in a year or two, she can get them at a really great bargain price by waiting!)

Sounds like good advice, but clearly you don't have kids.

Trends are perfectly normal with kids. When all of your friends are playing with a certain thing, you need to be playing with it too or they will want nothing to do with you. You can't show up with Pokemon cards if everyone else is trading Yu-Gi-Oh cards. Your Beanie Baby will get ignored while everyone is playing with their Webkinz. The key, then, is controlling the wants: being happy with one Webkinz even though you have friends who have 5 or 6. I often say, true happiness is being happy with what you have.

[LivingAlmostLarge]

Then if true happiness is being happy with what you have, sounds like she's buying things that make her happy so it's not too much of a problem. Along with the clothes thing, get her a CC.

Yes I"ll get shot for my reccomdation, but I had one by 13. I had to use to it to buy stuff so my mom could show my what a statement looked like, etc. When I left home at 16, I was ready to take on the world. And going to college about 6k miles away from home and not signing up for CC was hard. Of course i couldn't legally do it, but still I'm sure I could have done it.

But I was ready for the temptation because my mom at least explained what a CC was, how it worked, what it looked like, etc. Everything, I understood nothing was "free". It's surprising how many people think that when you charge something you don't have to pay.

DH also got a CC in high school to learn about them. Because of it we've never had CC debt. So I guess our parents did something right.

But to me the problem is a lot of people can't teach their children these things because they themselves have never learned it. They think as long as you can afford the monthly payment. Or charging it makes it affordable. It depends on the mindset you instill in your kids.

[disneysteve]

my mom at least explained what a CC was, how it worked, what it looked like, etc.

Our first "financial academy" lesson (that's what we call our teaching sessions) was a hypothetical store purchase and discussing all the options for payment - cash, check, debit card, credit card. I explained the pros and cons of each method. I focused a lot on credit cards and explained how they work and used an onine calculator and one of our actual CC statements to show the effect of not paying the balance in full each month. She was shocked by how much it would cost and how long it would take to pay it off by paying the minimum. I made it very clear that we always pay our bill in full and never carry a balance. We use the card as a convenience so we don't have to carry a ton of cash plus we get lots of reward points (like the 10 free hotel nights we'll be enjoying this summer). She understands that we never use the CC to buy something that we don't already have the money for.