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How to prevent kids spending money where they shouldn’t

How to Prevent Kids Spending Money Where They Shouldn't

When asking for a new toy or a treat at the shops as a young kid, my parents would sometimes turn me down with the simple saying, “Money doesn’t grow on trees”.

 

These days, how we spend our money has become far more sophisticated and fast-paced. Modern marketing makes every product we see enticing.

 

Parents have the difficult task of not only teaching children how to appreciate the value of money, but how to spend it wisely.

 

Here are some ideas to help prevent your kids from spending money where they shouldn’t.

 

How games can teach your kids how to spend their money wisely and save.

Games like Roblox and Minecraft are hugely popular with my twin boys. At first, I was dubious about the extra screen time. Then my children showed me the “worlds” they built and created as well as the unique characters (also known as avatars).

 

Along with encouraging creativity and imagination, these games can teach children how to spend wisely. With currencies like Robux and Minecoin, players can make purchases to widen their gaming options. They can customise their avatars or buy unique items using these in-built game currencies.

 

Players have a constant track of their savings and as well as their spending history on their dashboard.

 

What about pocket money? Commission or allowance?

Earning pocket money on a commission-based system gives children the freedom to make as much as they want or need. It also gives them the focus to save up for something worthwhile like a rare, expensive toy or a new bicycle.

 

Have a suggested list of chores that your kid can choose from. Stick it on the fridge or the kitchen wall. You could even have a different amount subject to how much time and effort needed to complete the chore. For example, taking out the rubbish may earn them $1 while mowing the front lawn is a $5 reward.

 

Other chores can include:

  • Vacuuming the house
  • Packing and unloading the dishwasher
  • Hanging up and taking down the washing
  • Washing the car
  • Walking the dog

Make sure to clearly define the difference between a chore and a normal daily task. In our house, packing toys away doesn’t earn any pocket money!

 

Demonstrate the importance of giving versus spending

It’s never too early to start teaching your kids about charitable giving. It allows them to practice generosity and support others in the community.

 

They can start to perceive money as a means other than just spending it. Importantly, children begin to understand how they can help those in need.

 

Exposing them to some of the many charities who help those in need, and encouraging them to choose one they’d like to support allows children to practice generosity.

Some other opportunities where children can give money are:

  • Donate online to a charity of their choice
  • Make birthdays charitable by asking for donations instead of gifts
  • Donate old toys or clothes

 

Teach Your Kids The Consequences to Mindless Spending

 In-app purchases available in gaming apps and video game consoles can create mindless spending habits.

 

As kids can quickly become engrossed in a game, the additional costs to continue or upgrade are easily overlooked.

 

A friend almost fainted when her credit card statement arrived. She discovered that her 10 year old daughter went on a little shopping spree while playing Candy Crush.

 

The daughter used her savings to pay her mum back. Mum has since figured out how to disallow the purchase settings on her phone.

 

Teach Contentment

 

All of a sudden after having a play on his friend’s Nintendo Switch, my son wanted his own. He even offered to buy it with his own birthday and Christmas money.

 

Peer pressure and FOMO (Fear Of Missing Out) are two behavioural patterns that can often lead to a tween or teen’s lack of appreciation for what they already have.

 

We challenged our son to think about all the great games he already had on his tablet device. We put our foot down and told him it was best to save his money.

 

There were tears and intense tantrums. But we held strong. He eventually figured out for himself that life - without a new video game - would continue just fine.

 

So there it is! Easy, right?

 

ZAAP is a visual tool that can further help your kids learn the importance of smart spending. Similar to games, ZAAP allows kids to see their spending habits, but also set savings goals.

 

Parents can also view this information and support their children, suggesting tips on how to improve their money management.

 

Teamwork of parent and child is key to help our kids to become confident, independent and capable adults.

 

Especially with matters of the wallet.

 

About the Author:

Grace is a freelance writer with over 25 years experience in business, having held senior roles in marketing, finance through to sales.

 

Graduating from the Australian National University, Grace spent 10 years working with multi-nationals in Asia. She is multi-lingual, fluent in Japanese and Bahasa Indonesia.

 

On returning to Australia, she then carved out a successful career in financial services, IT and telecommunications.

 

In addition, Grace has run her own small business focused on issues such as parenting, financial literacy and digital security.