Should I take away her allowance?

[mommahhh]

My DD (nearly 8) has been obsessed with money ever since she realized that's how you obtain stuff. She talks about money, she looks at money (a lot!) etc etc. I have always been a bit worried about how she is always looking for her next "hit"....she will see something she wants and talk about it endlessly (months at a time) until she finally gets it. Then she loves it for a week, and then she's onto the next obsession. It is worrisome (and also very draining for me) because it feels like she's never satisfied with what she has, she's never enjoying the now.

I am not like this at all. I'm not one who loves to shop or who needs the latest, greatest thing. So I find it hard to relate to her obsessions.

Anyway, in an effort to try to get it under control and give her a sense of buying power, I thought I'd give her an allowance. I don't want her to have too much (because I am not thrilled with the idea of our home being overtaken by stuffed animals, costume jewellry and dolls), but she loves bills (she's over change apparently ), so we agreed on $5 every 2 weeks. This often gets supplemented by her grandparents who will give her a $5 here and there.

I was attempted to teach her (a) how to save, and (b) why we don't just buy non-stop (I thought this would show her how much $ everything costs), and (c) to appreciate your hard-earned purchases. I know, it is probably a lot for a 7 year old.

Here's the issue: it seems to have made her more obsessed! She talks all the time about what she is going to buy next, and how long it will take to save. BUT, she gets very upset when she realizes that she'll need to save for a few months to purchase that $30 stuffed horse, etc. I've tried to get her focused on experiences rather than stuff, but it isn't working. If we go camping, she obsesses over which stuffed animal to buy on the way, etc etc. This weekend we are at a friend's cabin, and it has been horrible. She threw a fit when we went for a walk thru the little town because she didn't have enough money for 2 things she saw in a store window.

So I'm thinking to take her allowance away since it is making her even more obsessive, and she has such a bad attitude.

[ChetMC]

Couple Thoughts

There is a school of thought that says an allowance shouldn't cost a parent any money. Along with the money you also transfer some responsibility to the child. So as the money you give a child increases the stuff you pay for as a parent decreases.

I knew a kid in grade six who got $50 a week for allowance. That was a lot of money in 1986 / 87, but her and her older sister were also expected to buy all of their own clothes, pay for the gift themselves if they were invited to a birthday party, buy certain personal care items for themselves, etc. I'm wondering if your DD could benefit from more money and more responsibility. Do you think she wants to really shop and spend? Could she handle learning to manage her needs and her wants?

On some level, it is funny that most people start kids out with pocket money to buy toys and treats instead of using money for necessities first and fun stuff second. It's also interesting that parents expect kids to learning saving first (since most allowances are too low to buy much) and forget all about learning to budget.

My other thought is that when your DD really wants something you might try showing her how to comparison shop. If she wants a $30 toy, she might learn the importance of being less impulsive if you could show her a store online that has it for $20, maybe you could find a similar item for $15, a gently used one on ebay for $10, etc.

As for the cabin incident, some families do have a cash bonus for trips. When you win a vacation as a prize, it usually comes with spending money. It would not be unreasonable to consider giving your DD extra money before a vacation.

How long has your DD been interested in money like this? How long has seen been getting an allowance? I do think that this is something that could easily take months and months, even a year, for you to really see a change with. I've certainly known kids who were obsessed with money for a couple of years, though their tact on the subject certainly evolved over time.

Some of it is also just a kid's personality. I know a couple of families with three, four or five kids... all raised together, same parents, some attitudes about money, same allowance rules, same rules about part time work and one kid grows up to be a spender, and one takes his brother's used sneakers out of the garbage because he'd rather save the money then buy himself a new pair. On some level, it isn't completely fair to expect children to develop an IDENTICAL attitude toward money as their parents.

[HappyMommy2]

Could you enforce a save-half-spend-half rule?

[staceychev]

Thanks for the this post, Mommahhh. I think my DD, 5, could have these tendencies, too. Julie, your response was great, and some really important food for thought.

DH and I are on-again, off-again Dave Ramsey fans. (We're off-again, and definitely need to get back on the wagon!) I know he's got info for teaching kids about money, and teaches that money should go to three places: giving, saving, and spending.

ETA: I don't know if you're religious or not. We're actually not, but Dave Ramsey is. Don't be turned off by the religious (Christian) talk: there's plenty of good there, still.

[4evermom]

I decided at one point that my ds needed a larger allowance so he could save more easily. Not long term saving, just more $/week so saving for a more expensive toy could be done in a more conceivable time frame. He was just blowing his money on cheap things because it seemed futile to try to save for 6 months. His starting allowance (age 6) was $5 a week because I could see him being able to save for 1 month and buy a $20 toy, or buying something for $5 that was worth having. At that time, I stopped buying him things when we were out and about as much, so it didn't really change our budget. It just gave him control over that aspect of it. I didn't have to make judgment calls or be the one saying yes or no to requests.

I upped his allowance to a dollar a year per week when he turned 8. More money did seem to help. It is just for extras like toys. I supposed if he liked clothes and wanted more than what was necessary, I'd consider having his allowance include that.

Right now his allowance is on hold because dh is unemployed. Ds knows his allowance is linked to the family finances and food and bills come first. I suppose it might be harder for kids in a more financially stable environment to understand that quite as easily. But I don't think having young kids earn money or pay for necessities would necessarily help since it could be seen simply as mom and dad have money but won't share. But I might try that with older kids (tweens/teens) if they didn't seem to be picking that up.

We like to look things up online to find the best price. We'll get things used. We maintain a wish list. Ds is learning to plan his spending and research his purchases. I avoid going into stores just to look around very often. But sometimes we do that, especially places like Five Below because ds knows they sell $1 tricks and sometimes mini lego kits.

I think your dd is just focusing on learning to spend and that learning to save will come with time. I'd think taking away her allowance would make her more focused on money rather than less. I would encourage her to compare prices and have an idea of what she is looking for before going into a store. And I'd think about increasing her allowance. With my ds, more money meant he bought less cheap junk.

[velochic]

Does she watch a lot of commercial TV? Because my first thought is that she's being bombarded with the over-consumption consumerism that typical mainstream media feed to children. At that age, they can't understand needs vs. wants, so with a lot of exposure, that message gets confused and exaggerated even.

Do you feel comfortable getting her involved with your household finances? You can generalize, but show her that "this much" goes to housing, and "this much" goes to food, and "this much goes to savings", etc. and have her help so that she can see that not 100% in goes to 100% wants.

I don't know if you do charitable contributions or contribute time, but it's also important to talk about how those with more can help out those with less. Sometimes that doesn't mean $$, but time. If you can get her volunteering, perhaps she can see how fortunate she is and realize that there's a lot more to life than just getting the next bling. That she can help instead of get.

Just some thoughts. May not apply at all to your situation.

[phathui5]

I think that being really into money is pretty normal at that age. Both my 9yo and 7yo have gone through phases where it seemed like they were talking about money all the time.

They both get $5/week in exchange for chores being done without me having to nag them about it. Generally, half goes into their savings account and half is for them to do what they want with.

[madskye]

I don't think I'd take away her allowance. You might want to have a quiet talk with her about "balance" though and not letting money or anything else become an obsession. What else does she have in her life right now besides buying stuff? Is she into horses or dancing or sports? Maybe let her know that she needs to give all those things equal value.

[One_Girl]

I think you should give it a while longer before taking it away. The money and you not jumping to buy her things when she wants them sounds like a new thing that is going to take some getting used to. I think you should talk to her about what you see and tell her why you think it is important for her to learn about money while she is young. I also suggest that you treat the fits over not being able to afford something the same way you would treat a fit over you not buying her something (or a fit for any other reason).

[Heavenly]

It sounds like she really needs to learn about people that have less than her. Is there a homeless shelter near you? How about taking her to visit and meet some of the children there? Maybe start a jar to save money to buy toys for the children who don't have any. How about volunteering to serve a meal to the less fortunate? She really needs to stop focusing so much on all the things she wants. That can be hard for a 7 year old but I think it's a good idea to start working on it sooner rather than later. I would also insist she save a portion of her allowance to go towards something important. For example if you are taking a family vacation have her work towards paying for a souvenier or something. Or if she really likes an expensive outfit tell her she needs to save part of her money towards it. And this may sound mean but I would just stop listening to her. If she started going on about how much she wants some item and being upset about how long it will take to buy it I would listen for a minute and then if she kept going I would tell her that I don't want to listen to her complain and I would walk away.

I just re-read your post again and I really stand by behind my suggestions to teach her about children less fortunate. How about saving part of the allowance to sponsor a child from a third world country? She seems to think it's all about her and what she's going to get and I can tell you from experience (DH's much younger sister) that it doesn't just go away. DH's sister has been like that as long as I've known her (age 11) and even know at age 23 she is constantly shopping, saying she needs the latest clothes, the latest phone, a bigger purse, etc. She spends like crazy. Her parents never did anything to change her attitude when she was younger.

[GuildJenn]

Originally Posted by phathui5

I think that being really into money is pretty normal at that age. Both my 9yo and 7yo have gone through phases where it seemed like they were talking about money all the time.

They both get $5/week in exchange for chores being done without me having to nag them about it. Generally, half goes into their savings account and half is for them to do what they want with.

This is my experience with my nieces and nephews. They are learning that money is power, things are a part of interacting with peers and so on and so forth.

I think talking to her is a big part of that learning, and so might volunteering be. You could also have a talk about the "three jars" approach (save, spend, give).

However - I would also really think long and hard before you penalize your daughter for how she is acting around money you've given to her to experiment and learn with. What she will learn is "what I care about is not acceptable to my parents and they will take things away from me if I share my real feelings."

Part of having an allowance is IMO having the freedom to go through all those phases when the costs are small to her/your family.

[Multimomma]

Some of it is also just a kid's personality. I know a couple of families with three, four or five kids... all raised together, same parents, some attitudes about money, same allowance rules, same rules about part time work and one kid grows up to be a spender, and one takes his brother's used sneakers out of the garbage because he'd rather save the money then buy himself a new pair. On some level, it isn't completely fair to expect children to develop an IDENTICAL attitude toward money as their parents.

This is exactly true. We have eight children, and they all have such different personalities, some more like me, others like my dh, and most are just themselves. It has nothing to do with TV power, or their generosity (they donate time to local shelters and NPOs)

I would really suggest you keep on the way you are (my 7 yo and 9yo both get five dollars) It's the perfect amount because it is enough to let them decide if they want to buy something smallish, or save for something larger. Just don't get frustrated (aloud) and support her positively. Sayings like "You sound really frustrated, you don't feel like you have enough. How can you get more?" "You want both X and Z, do you think we could find those toys somewhere that it might cost less?" and most importantly, share times in your life where you've had to budget, save or forget buying something "Once I really wanted to buy a new book, but decided that if I borrowed it from the library, I could get X instead."

I don't agree with forced savings or donating. It takes the power of money out of their hands and doesn't allow them to make the choice to do so. But show her how much YOU donate or save, and offer her the opportunity to do so. At this point in time, taking that away from her could really backfire and make her cling more to what money she does have.

[EdnaMarie]

Wow, what Julie said.

I certainly never got an allowance without earning it. I was paid to do things that my mom would have done otherwise. I got paid if I did them on time--if I didn't, no money.

As for the tantrums, I almost think that's a slightly separate issue. Having a fit is a problem, regardless of whether it's her money, your money, or the fact that you have to leave the cabin, you know? It's just not appropriate to ruin other people's time like that. So my response to that would be, "I know you're upset, but this is a public space. Please take your tantrum somewhere else."