Should kids get to spend their money however they want?

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

Toronto mom Blake Eligh was determined to teach her kids key financial lessons before they had to go out into the world on their own. She did this, in part, by giving her two daughters decision-making power over their own money from a young age. She and her husband set the girls up with both an allowance and a savings plan when they were eight and 11 years old. Now her kids are 12 and 15 and Eligh only wishes she’d started earlier. “Giving them a chance to learn about spending money at this point allows them to make financial mistakes when it doesn’t really count.”

Should kids get to spend their money however they want?
© Used with permission of / © St. Joseph Communications. By: Erik Putz

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

But what do the experts say? If Grampa hands your kid some cash or they’ve saved up a bunch from weekly allowance, should they get to spend it all however they want?

Learning financial literacy the hard way

When it comes to teaching your kids about money, there’s a simple rule to remember: Kids learn best from their own actions. That’s why Nancy Bisogno, a district leader at TD Bank who’s worked with elementary schools on programs that teach kids about money, encourages parents to give their kids as much financial freedom as they can. “There are two big lessons that can come out of letting a kid spend money how they like,” says Bisogno, who is based in Stratford, Ont. “One, which we can all relate to, is buyer’s remorse—when we purchase something before realizing that it’s not worth it. The second is realizing, I can’t afford this. This puts the cost of things in perspective, which kids don’t always understand until they have their own money to spend.”

Global Tech News Daily

Chelsea Brennan, a former hedge fund investor and the founder of Boston-based Smart Money Mamas, acknowledges how hard it can be for parents to watch their kids waste money or be demoralized by their poor spending decisions. But it’s an important lesson to learn while the dollar value is still relatively low. “We want to stop them from making those mistakes, but we need them to experience making a wrong decision,” she says. Eligh’s daughter Grace once saved up for a particular doll with articulated joints, which she had been coveting for a long time. “Within a week, both the hands had come off irreparably. That was really disappointing for her because she’d spent a lot of money,” Eligh recalls. Still, Grace learned not to buy that brand of doll again, and to think hard before spending that much money on one single toy.

Starting money lessons early

Brennan suggests starting an allowance as young as four or five years old, or when kids start asking for money or wanting to buy things from the store. “Begin by giving them some spending money, and then when they get a little bit older, start spreading it out into different kinds of goals,” says Brennan.

Global Tech News Daily

In Eligh’s house, they started the allowances off small at $2 and $5 per week, just enough to buy a treat or a trinket at the dollar store, and have recently bumped it up to $5 and $10. Once your child is able to get the hang of how spending money works, you can set up a system that includes spending and saving. For Eligh’s kids, one-third goes directly into a savings account and the other two-thirds can be spent however the girls like. “If they want to invest those two-thirds in gumballs, that’s fine. They can do whatever they want with that portion of the allowance. But the stuff in the bank—we need to have some discussion about how that will be spent.” Brennan’s young sons divide allowance up into thirds: a third to spend, a third to save for larger purchases, and a third to give to someone else.

Values added

While we shouldn’t micromanage every dollar our kids spend, that doesn’t necessarily mean they get carte blanche either. Brennan talks about what she calls a family’s money values—and that it’s important for parents to decide what their own financial mindset is before they guide their kids. “What values do you want to focus on through your spending? What emotions are you trying to create with your money? Are we prioritizing education? Are we prioritizing feeling charitable or feeling joyful?” she says. Those values can then help establish the parameters for how your kids are allowed to spend their own money. Some parents will insist their kids set aside a certain amount for charity (or for “sharing,” as Brennan calls it with her own young kids), for example. Or they might enforce a hard ban on specific types of items, such as toy weapons, violent video games or makeup.

Financial growth

As kids get older, the basic premise of letting them spend their own money within the boundaries of the family’s values doesn’t really change. What does change with age and independence is the type of things they want to spend their money on. Brennan sees this as a great opportunity to give your children more responsibility for their spending alongside, perhaps, a more generous allowance. “When we give our kids money, one of the things that’s helpful is telling them what that money is for,” says Brennan. With younger kids between the ages of three and eight, say, you might tell them their money is for toys or treats.

As your children move into the tween years, you might want to expand that to include outings with friends. And then, by the time your kids are teens, they may also become responsible for paying for a cell phone or subscription services, for example. “That might mean increasing their allowance by taking money that you would have spent on them and putting it in their hands. Saying, for instance, we budget this much a year for your clothes. We expect you to have a winter coat and so many pairs of pants and an outfit for holidays, but you decide what that is,” Brennan says. This gives the opportunity to start budgeting and thinking about bills before they’re out in the world on their own.

Modern tools for modern families

Cash is the best learning tool for younger kids because they can see their money accumulate and count it themselves. But Eligh found that keeping enough cash on hand for allowances was harder than she anticipated. So for the sake of consistency, her family keeps a binder in which they track money coming in (from allowances) and out (via online and in-store card payments) and then they settle up with cash every so often.

Older kids might like to keep a bit of cash on them as well, but there comes a time when having their own debit card makes sense. By the time kids are navigating their neighbourhoods on their own, around 12 or so, Bisogno recommends setting them up with a debit card. Don’t forget to train them how to use it safely.

Ultimately, we want our kids to make their money mistakes when they’re still young and the stakes are low. “One of my core beliefs is that money is involved in everything we do,” says Brennan. “Every time we choose to spend money, we vote on what kind of world we want to live in, what kind of businesses we want to support, what kind of policies we want to be enacted. And we can show that to our kids from a young age because they’re actually really good at understanding that.”

Need help managing allowance and chores? Your phone is your friend:

Mydoh: RBC’s new app teaches kids about money basics, helps them earn money from chores and offers advice on spending it wisely. It all starts from a parent account.

RoosterMoney: This virtual chore and money tracker app is nicely designed and easy to use. An upgraded version lets you tie allowance to chores and set an interest rate for savings.

iAllowance: Kids earn rewards for completing chores and parents can set recurring allowances that will pay into any of the unlimited “piggy banks” you set up.

How parents should handle larger cash gifts

Grandma surprises your kids by handing them a $100 bill. What do you do next? When kids are given a decent chunk of change, it’s important to have a consistent rule for how that money should be accounted for. Smart Money Mamas founder Chelsea Brennan says many parents she speaks to are fine with letting their kids spend $20 or so however they want, but prefer to confiscate larger amounts to deposit them directly into savings. She’s not a fan of this approach. “When you do that, you’re taking away their autonomy,” she says. “Some kids can build a mental relationship that saving is my money disappearing, and that’s not going to be helpful in adulthood.” In her house, her kids can spend half of all cash gifts however they want, and then the other half gets divided into thirds (spend, save, give away). Other rules for spending cash gifts can work too, as long as you’re consistent. What you want to avoid is kids getting excited over a large gift and then feel like somebody has taken their money away.

News Related

OTHER NEWS

New York Rangers get another comeback win to force Game 7 vs. Pittsburgh Penguins

PITTSBURGH — How many times can the New York Rangers dig themselves into a hole and climb back out? At least one more, as of Friday night. The Blueshirts came ... Read more »

Wilson, balanced Aces cruise to 96-73 victory over Dream

COLLEGE PARK, Ga. (AP) — A’ja Wilson scored 15 points, Kelsey Plum had 14 points and 11 assists and the Las Vegas Aces rolled to a 96-73 victory over the ... Read more »

EXPLAINER: Why frustration lingers in Okinawa 50 years later

The Associated PressFILE – U.S. Marine Corps Sgt. Mike Anglen of Turner, Ore., center, stands atop a cliff as Sgt. Bryan Wallace of Pikin, Ill., waits for his turn before ... Read more »

Astros beat Nationals 6-1 for 11th straight victory

WASHINGTON (AP) — Jose Altuve homered on the first pitch of the game, Yordan Alvarez and Yuli Gurriel also went deep and the Houston Astros extended their winning streak to ... Read more »

Kreider scores late, Rangers edge Pens 5-3 to force Game 7

PITTSBURGH (AP) — Chris Kreider’s long slap shot bounced over Louis Domingue and into the net with 1:28 left and the New York Rangers beat the Pittsburgh Penguins 5-3 on ... Read more »

Astros push winning streak to 11, roll past Nationals 6-1

WASHINGTON (AP) — Jose Altuve homered on the first pitch of the game, and Yordan Alvarez and Yuli Gurriel also went deep to help the Houston Astros extend their winning ... Read more »

Moustakas, Drury power Reds to 8-2 victory over Pirates

PITTSBURGH (AP) — Mike Moustakas homered twice and Brandon Drury drove in four runs to break out of a slump and lead the resurgent Cincinnati Reds to an 8-2 victory ... Read more »

Peterson's bases-loaded walk lifts Brewers over Marlins 2-1

MIAMI (AP) — Jace Peterson walked against Anthony Bender with the bases loaded in the ninth inning and the Milwaukee Brewers beat the Miami Marlins 2-1 Friday night. After starters ... Read more »

Padres: No cancer found during manager Bob Melvin's prostate surgery

SAN DIEGO (AP) — The San Diego Padres say no cancer was found when manager Bob Melvin had prostate surgery on Wednesday. Melvin, 60, was recovering at home Friday after ... Read more »

Ogunbowale, Gray help Wings rally past Mystics, 94-86

WASHINGTON (AP) — Arike Ogunbowale scored 27 points, Allisha Gray had 21 and the Dallas Wings overcame a 15-point second-quarter deficit to beat the Washington Mystics 94-86 on Friday night. ... Read more »

Resigning North Dakota senator led lawmakers in travel costs

The Associated PressFILE – North Dakota Sen. Ray Holmberg listens during a joint House and Senate Appropriations Committee meeting at the Capitol in Bismarck, N.D., on Jan. 7, 2009. Holmberg, ... Read more »

Residents in picturesque California county hit with gas prices topping $7 a gallon

A California county known for its spectacular mountains and proximity to Yosemite National Park has been paying the nation’s highest gas prices. Read more »

Boudreau to return as coach of Canucks next season

VANCOUVER, British Columbia (AP) — Bruce Boudreau will return as coach of the Vancouver Canucks next season after helping to turn the struggling NHL club around as a midyear replacement. ... Read more »

New Zealand leader Jacinda Ardern tests positive for COVID

On Location: May 13, 2022 Catch up on the developing stories making headlines.The Associated Press WELLINGTON, New Zealand — New Zealand Prime Minister Jacinda Ardern has tested positive for COVID-19 ... Read more »

Today in History for May 14th

Highlights of this day in history: Colonists go ashore in Virginia to set up Jamestown; Lewis and Clark begin to explore Louisiana Territory; Israel founded; Skylab launched; Movie producer George ... Read more »

Twitter CEO expects Elon Musk acquisition to close, addresses spending cuts

Musk is awaiting details supporting calculations that spam, fake accounts represent less than 5% of Twitter's users Read more »

Padres: No cancer found during Bob Melvin's prostate surgery

SAN DIEGO (AP) — The San Diego Padres say no cancer was found when manager Bob Melvin had prostate surgery on Wednesday. Melvin, 60, was recovering at home Friday after ... Read more »

Renovated NYC museum shows indigenous perspectives

The American Museum of Natural History in New York City recently finished a major renovation of its exhibition on the native peoples of the northwest coast of North America. Curators ... Read more »

Police release 911 calls in Gilgo Beach case

A woman who disappeared in a beach community on New York’s Long Island more than a decade ago, sparking an investigation into a possible serial killer, said “there’s somebody after ... Read more »

Academy Awards set 2023 Oscars for March 12

The Associated PressFILE – Oscar statue on the red carpet at the Oscars on Sunday, March 27, 2022, at the Dolby Theatre in Los Angeles. Next year’s Academy Awards will ... Read more »

Actor Fred Ward, of 'Tremors,' 'The Right Stuff' fame, dies

The Associated PressFILE – Fred Ward, a cast member in “30 Minutes or Less,” poses at the premiere of the film in Los Angeles on Aug. 8, 2011. Ward, a ... Read more »

Judge refuses to drop elections suit against Trump, media

NEW YORK — A Colorado judge on Friday denied motions to dismiss a defamation lawsuit filed by an election systems worker against former President Donald Trump’s campaign, two of its ... Read more »

Q&A: Becky G unveils every side of herself in latest album

The Associated PressFILE – Becky G appears at the Oscars in Los Angeles on March 27, 2022. Beck G’s latest album is “Esquemas.” (AP Photo/Jae C. Hong, File) NEW YORK ... Read more »

North Korea reports 21 new deaths as it battles COVID-19 outbreak

SEOUL, South Korea — North Korea reports 21 new deaths as it battles COVID-19 outbreak. Read more »

North Korea confirms 21 new deaths as it battles COVID-19

SEOUL, South Korea — North Korea says 21 people died and 174,440 people were newly found with fever symptoms on Friday alone as the country scrambles to slow the spread ... Read more »

White Sox place Giolito on COVID list, activate Vaughn

The Chicago White Sox placed ace Lucas Giolito on the COVID-19 injured list and activated outfielder Andrew Vaughn following a rehab assignment with Triple-A Charlotte on Friday. Giolito began experiencing ... Read more »

Traded back and forth, Ford learns to live out of suitcase

NEW YORK (AP) — Mike Ford has learned to travel light — and quickly. Since the start of the season, the 29-year-old first baseman has played for Tacoma, San Francisco ... Read more »

Falcon 9 rocket launches Starlink satellites

A SpaceX Falcon 9 rocket launched 53 Starlink satellites to low-Earth orbit from California on Friday. (May 13) Read more »

Celtics' Robert Williams remains out for Game 6 vs. Bucks

MILWAUKEE (AP) — Boston forward/center Robert Williams missed his third straight game with an injured left knee as the Celtics tried to keep their season alive Friday night in Game ... Read more »

Padres sign Robinson Canó, plan to use him off the bench

ATLANTA (AP) — The San Diego Padres have signed veteran second baseman Robinson Canó to a major league contract and plan to use him as a left-handed bat off the ... Read more »

WNBA star's Russia detention extended by 1 month

The lawyer for WNBA star Brittney Griner says her pre-trial detention in Russia has been extended by one month. Alexander Boykov told The Associated Press the relatively short extension indicated ... Read more »

Louisiana justices toss COVID-related charges against pastor

Hundreds of thousands of Americans fighting long-haul symptoms from COVID-19 Dr. David Putrino from Mount Sinai Health System and COVID long-hauler Joel Fram discuss the long-term effects of the disease.The ... Read more »

Sandy Hook lawsuits against Alex Jones on track to resume

The Associated PressFILE – This Tuesday, Dec. 11, 2018, photo shows radio show host and conspiracy theorist Alex Jones at Capitol Hill in Washington. The Sandy Hook families’ lawsuits against ... Read more »

Rockies' Bryant closer to return after cortisone shot

DENVER (AP) — Colorado Rockies outfielder Kris Bryant took swings in the cage Friday for the first time since he was sidelined with a sore back nearly three weeks ago ... Read more »

Mariners demote Jarred Kelenic to minors after poor start

NEW YORK (AP) — Rather than make his Citi Field debut against the team that traded him, Jarred Kelenic was demoted to Triple-A Tacoma by the Seattle Mariners on Friday ... Read more »

Biden: ASEAN partnership 'critical' in this moment

Looking to strengthen ties, President Joe Biden welcomes leaders from the Association of Southeast Asian Nations to Washington for the first time. “We’re launching a new era in U.S.-ASEAN relations,” ... Read more »

Phil Mickelson will not defend his title at next week's PGA Championship

Phil Mickelson caught lightning in a bottle last year at Kiawah Island, winning a major championship at 50 years of age. The fairways flooded, and the golf world stood and ... Read more »

Tennessee Titans' Malik Willis on Ryan Tannehill's mentorship comments: 'Everything is cool'

The Tennessee Titans didn’t take issue with Ryan Tannehill’s comments about mentoring third-round rookie Malik Willis. Willis and coach Mike Vrabel were asked about Tannehill’s scrutinized remarks following the first ... Read more »

Lawyers plan suit against Lufthansa over Jewish passengers

Lawyers for 26 passengers said Friday they told Lufthansa that they will sue the German airline for refusing to let members of a large group of Orthodox Jewish passengers board ... Read more »

Wild face offseason after yet another early ouster

While the Minnesota Wild were stacking up franchise records and securing the extra home game for the first round, general manager Bill Guerin carefully acknowledged a “great year” for the ... Read more »