Childhood should not be overshadowed by financial issues. The problem is, while you don’t want to make your child privy to all your family financial issues, you also don’t want to shield to the extent they don’t know how to handle money at all. Many parents deal with this in a number of ways. They let children budget an allowance. They even go so far as to tell the child where that allowance should be budgeted towards. Others set limits on the number of items bought in a trip to the store. Many don’t believe in allowance and insist that toys or money should be earned through chores or educational success.
The only trouble is that even these types of activities can transfer a parent’s financial stress to a child. They receive or earn a small amount of money and we become concerned about what they are doing with it. Are they saving anything? Are they really going to waste their money on that? By the time we shake our heads and tell them it’s their money their confidence about how to handle money is shaken. That feeling can follow them through life.
Mistakes Must Be Made
It’s a truth that no one likes. Most of us have a financial obligation or a purchase we regret having. Allowing children to make mistakes unhindered with their own money can reduce the mistakes they make as adults. Imagine instead of trying to get your child to spend money on the right thing, you hold your tongue and allow them to spend money on the wrong thing.
At some point your child will come to you and say something to the extent of “I wish I hadn’t bought five pounds of gummy bears. I didn’t think I’d ever get sick of them, but after two days I don’t even want to look at them!” Then you can tell them that they are a smart kid and they wont make that mistake again. Don’t offer extra money. Don’t offer to get them another purchase they may enjoy more. In the adult world the money would be gone. Let it be gone in the world where they will miss out on a Lego set. In the long run they will learn to think before spending money.
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