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Letting Kids Make Money Mistakes

Christina has a 6-year-old son with $400 saved. He wants to buy a motorcycle someday with it, but now he's changed his mind and wants a tablet. Is it okay for him to change his mind like this?

QUESTION: Christina in Idaho has a 6-year-old son with $400 saved. He wants to buy a motorcycle someday with it, but now he’s changed his mind and wants a tablet. Is it okay for him to change his mind like this, and how should Christina handle it?

ANSWER: I’m not concerned about the iPad Mini or the dirt bike. I’m more concerned about what the lesson is that we’re trying to teach him.

What we did with money was we always looked for coachable, teachable moments in the discussion, and usually the money question opened up a life question—a life discussion. With a 6-year-old, I am concerned that he will have a regret, but it’s not going to ruin his life to do either one. If you advise him one way and he goes the other way and then he has his regret or whatever, then you can just say, “Hey, that was a chance you had to listen to mom’s wisdom and you didn’t. But I allowed you to have enough rope there to hang yourself. I allowed you to step out there, and you made a bad decision, and I want you to learn from the bad decision.” It’s kind of controlled pain, if you will—natural consequences.

An example of that was Rachel—many years ago—went to a theme park. She was the spender of the three kids and spent all her money on two or three games in just a few minutes—rip-off carnival games, you know? Then the rest of the day, the kid had no money. And she whined and moaned through the whole park. She got nothing else, but I had warned her. I said, “You’re going to lose it over there. Those things are a rip-off. It’s not going to work.”

“I want to play them!”

“Well, go ahead then.” Fool. You know?

And actually, we ended up writing Careless at the Carnival—the little children’s book—after that story, but it was a lesson learned. A controlled amount of pain didn’t change her life, but A) she learned to listen to her dad, B) she learned carnival games are a rip-off, and C) she learned to control herself a little bit and think through how these things work.

If you think he might come back and change his mind, you need to kind of sit down and talk to him about that and just say, “If you buy this Mini, it’s going to affect the motorcycle. Later on, your brothers and sisters may have motorcycles and they’ll be riding around on their dirt bikes. You’re going to be looking at your Mini. I don’t really know if that’s a good decision or not. I kind of think it’s not, but you have saved it up, and if you really have your heart set on that, you can go that direction.”

Kind of allow them the emotional dignity of making some decisions but with the warnings and with the protections. You just kind of put those warnings in there and kind of manage the expectations and so forth. If you’ve had all those conversations, then I’m good with it. Of course in either case—motorcycles or iPads or anything else that they buy—they’re going to be used in a way that, as a parent, I agree with. The fact that you used your money for it doesn’t change that conversation.

It’s a natural tension that you have in the process, but it’s a great conversation and it just opens up conversations about maturity and about life and about choices. Money’s finite. You do this, you can’t do this. It’s called opportunity cost. You don’t tell a 6-year-old that, but it’s what it’s called, you know?