My 7-year old stepdaughter received $100 for a birthday gift last year. She kept it in her wallet and instead of working with her to decide how to spend it my husband let her do whatever she wanted with it. She took the money to her mom's house where it all disappeared. She claims she spent it but can't remember what she bought. When grandpa asked what she did with her birthday money he was disappointed she didn't buy a toy she wanted or something similar.
This year grandpa will be giving her $100 for Christmas. I think it's our jobs as parents (or step-parents) to help her learn how to manage her money. So I think we should help her decide what to buy with it and encourage her to save it if there is a big toy she wants.
My husband says it's HER money and she should be allowed to spend or save it as she pleases. Even if she loses it, it's her loss. He thinks forcing her to save it when she wants to spend it is wrong.
I agree that it's her money and she should buy what SHE wants with it, but I think some guidance is in order. Also, whenever she brings things to her mom's house (toys, clothes, money) it disappears forever and we never see it again. So I think we should put the money in a safe place (a parental bank so to speak) and she can have it when she's ready to decide how to spend it.
Any advice?
Thanks for all the support and advice! We had a talk with her on how she wants to spend the money, and also to wait until after Christmas because there are many things she wants that she might get for Christmas. She decided she wants to save for a wii. We are going to put the money in the "bank." We are going to make a box with a picture of a wii on it, how much a wii costs and how much she has. Make one of those color-in charts for her (like they do for fundraising!) and she can put her money in the box. I am going to introduce the moonjar, save, spend and share.
This will help her SEE how she is working toward her goal. Dad has agreed this is a good way to teach her how to save, but also says if she wants to change her mind and spend the money that's OK too. I will counter that by talking to her about the wii, how much she wants it, how fun it will be, etc. if she can be patient. I am not going to FORCE her to save the money tho, but will talk to her about the consequences.
I'd like to set up a college fund for her but am afraid an account in her name will be accessible by her mom and I don't want her mom to get her hands on her daughter's money—the money is for HER COLLEGE. That's a question for a different post!
Thanks!
She should have some guidance. 7 is pretty young to handle that much money. Let alone keep it in her wallet! My kids have their own bank accounts and piggy banks at home where any gift money is put into. I have taken money out once to let them go shopping for whatever they wanted. The rest went back in the piggy bank. She should definately be made to keep it in a safe place until she decides what she wants to buy.
Kids need to have guidance on how to manage money. It is not something that people just know. It is learned. Your husband is right in that it is her money but he isn't doing her any favors of just letting her have at it without any guidance. Just the fact that she has money doesn't mean she will learn anything about it. My kids have a piggy bank and they are to put 50% in savings, 10% into tithe and 40% to spending. The savings is for something big that they want to save their money on (they choose what it is, but it usually costs a lot so they have to wait for the item and learn how to appreciate to save and they are more responsible with the what they bought. Then the spending is again on whatever they want but they can spend it as soon as they get it. Then titheing (sp?) goes every sunday to church with them. When they get older they have to know how to do this and learn to wait instead of getting that instant gratification all the time. That's part of the reason our economy is in the tank because people use their credit cards without thinking that they have to still pay it off. Then we they get into high school, we will be taking out more money so the kids get used to tax and all that other stuff. It's hard for them at the time but they will reap the benefits when they are older and have learned how to manage their money well.
my parents always made us bank half of any money gifts as a child. i hated it at the time on occasion, but now i see what they were up to -- teaching me about managing money and that some should be saved so i didn't spend every last cent i had. their lesson stuck, and i plan to help my kids in the same way when they are given cash gifts. i think you are totally in the right wanting to help her have some direction with the money and hopefully also save some -- whether it be saving up for something big or just having it there "in case". it is a great lesson to learn young -- much easier than trying to change the spend-it-all mindset later on!
We have always had our children put 1/2 away for college and they could spend the other 1/2 however they wanted. We would take them shopping and guide them gently. In the end it was their choice what they bought though. Now that my daughter is 19 and working she still is putting 1/2 or more away each payday. She knows she's only getting so much toward college and thanks to saving all these years if she plays her cards right she will not have a college debt.
Hi Nicole,
When my children receive money from relatives for whatever reason (birthdays, Christmas, grades, etc) it is the rule that half goes into savings for college and half can be spent on something specific. It is is a small item that they have the money for now I will take them to purchase the specific item that we have spoke about. If it is a larger item that needs saving for it goes in their "bank" until enough money is saved/earned. We talk about what things they want and discuss how much it costs that way they just don't impulse buy and waste their money. I think if we get in the habits now hopefully they will not impulse shop their whole lives.
Best Wishes!
If it was just $5, that would be fine, but $100 is alot of money, especially for a young child! I would open a savings account for her, any money she recieves goes directly in it until she decides what she wants. This will also help her understand saving. A child should not be carrying around that much money, I would also talk to her Mom and ask her what happened to the money, she should know!
One of the best lessons I learned from my mom was the value of a dollar. She let me spend the money I got for birthdays, but would remind me that what I wanted costed "x" and I had "y" and if I spent "y" then I would only have "z" left to spend.
I think you're right...she will only learn how to spend/save wisely from examples given to her (lessons she's learned from her parents or from how she sees you spending your money). Now that she's getting this type of money though, she should learn how to manage it. I also like that you're willing to show her...ok you have this much money, but the toy you want costs that much...if you save, you can have enough to buy that toy in "x" amount of time.
You're on the right track!!
I agree that as a parent, step or not, we have the job to make sure a child is guided to the best of our abilities. My kids never got to hold thier money in thier wallet when they were young. My husband or myself always held onto it in a seperate place in our wallet. If they had a piggy bank it was allowed to go in there.
Just my opinion, but I think 7 is too young to walk around with a hundred dollars. Is she set on holding the money herself? Does her mom give her a hard time if she doesn't bring presents home that she got at daddys?
This Christmas would be a good time to remind her that she had money before and either lost it or it was stolen or it was spent on trival things and that daddy or you should hold onto it until she finds something she wants to buy. Or you can open a savings account for her and begin the teachings of saving money, someplace safe.
I think you teaching her how to spend/save is very important, if the ecomony has taught us anything lately, it is that people spend too much and don't know how to save. Letting her spend every cent she recieves will eventually lead to the attitude of spending without consequences and she will end up in debt. I know this sounds silly now because she is only 7, but it is what we learn in the formative years that shape our lives.
If you and your husband can't agree on a strategy, maybe you could suggest to grandpa to please put his money in a savings account or a college account for her (and maybe buy her something small with some guidance from you in her likes and dislikes). That way he is still giving her something and it won't disappear and will be something she will really need later in life. I know it isn't teaching her how to handle money but you can find other ways to do that, and hopefully, there will be no disagreeing involved.
You are doing an excellent job, keep it up!
J.
I think you are totally on the right track.. Sitting down with her and letting her make a decision about how th spend the money, with your guidance, will last the rest of her life. You can encourage her to save some of it or save toward something larger. Maybe you can set up the parental account and show her how to save by giving her some type of interest on that money.
