An 8-Year-Old’s Spending Epiphany

February 6, 2015

by Michelle Perry Higgins

My 8-year-old daughter became obsessed with getting a mermaid costume for Christmas after she saw a teenager wearing the same outfit in a movie. She claimed that if I bought it for her she would be able to swim as fast and as beautifully as a real mermaid. I must admit that I checked out the details of this magical mermaid costume because I wanted one, too! After I got over the high price, I told my daughter, “Mommy won’t be buying the mermaid outfit for you because it doesn’t fit in with the budget I have planned for the holidays.”

She was extremely disappointed but kept a small glimmer of hope that Santa would come through. Alas, Santa did not.

Christmas came and went but the mermaid-costume discussion continued. I shared with her, several times, that the cost of the outfit is very expensive and that even I, as her Mommy, must make choices every day about how I spend my money. I know that she desperately wanted the costume, but given that it was not a priority in our budget, I told her that she would have to spend her own money to purchase it.

She had done a great job saving her allowance over the years and had the funds to purchase the mermaid costume herself. However, once I told her that she would have to spend her own money, she no longer wanted the mermaid outfit. I asked her why she chose to pass on buying the costume and she responded, “Well Mom, it costs way too much money, and what if I want to buy something else?”

At that moment, I realized the light bulb went on for my 8-year-old. She fully grasped that if she depleted her savings to buy this item, she would have no other funds in the bank, or very little. She worked very hard to build up her allowance fund and wasn’t willing to spend it all on this outfit.

Every day we make decisions that affect our finances, and as parents, it is imperative to convey the importance of these decisions to our children. Don’t be afraid to have the same conversation I had with my daughter about how things they want may or may not fit in with your budget. Educate them and share the importance of evaluating all their decisions that involve money. This can be done with allowances or gift money from birthdays and holidays.

Ideally, we want to fully equip our children with this decision-making skill before we launch them off to college. Otherwise, when they are on their own they may succumb to temptation and run up credit-card debt. I always say, “Choose wisely when making purchases, and think twice before the cash leaves your hand.”