Nancy Phillips


Happy Spring! It’s time for sunshine, rain, flowers and sometimes spring break travel.

Me.jpgToday’s post is about a recent vacation I took with my children, Natasha and Max, to Southern California. We had a fantastic time, and learned some great life lessons. We also experienced how we all react to consumerism at its most powerful state, those attractive and awesome things we want NOW! I’ll get more into that later.

Over a year ago I let my kids know they would need to save their own spending money for this trip. I said I would cover the basic needs of travel, food, lodging and fun times (like surfing lessons), but they were responsible for buying any “stuff” they wanted. While this may seem like cruel and unusual punishment to some parents, allowing them to control the preparation and outcomes of their spending decisions was a powerful learning decision for both of them – and they both came home with purchases they loved as well as some leftover cash!

This is real life stuff, and too often our children don’t get the opportunity to make these decisions until they’re out on their own – when devastating mistakes can happen quickly.


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So, Why did I let my kids save their own travel spending money? Here’s the lowdown:

 1. To learn to use cash before they get plastic – practice doesn’t make perfect, practice makes permanent. Whether it’s good habits or bad, when the brain does the same thing over and over, it becomes a habit. Using cash heightens awareness of what’s actually being spent. Combine that with tracking your spending (proven to be one of the most effective habits to enhance financial well-being), and you’ve got the basis of understanding cash flow, something that isn’t common practice now with most spending occurring on plastic and phones. In this case, it was just a matter of having a couple of envelopes on hand to keep the receipts and note the amounts. Trip Receipts.jpg

Letting our kids practice with small amounts of money to develop good decision making, and learn from their mistakes and successes, is critical to long-term personal financial success.

  2. To learn to deal with the “to buy or not to buy” drug rush of desire – emotion is the real reason most consumer purchases are made, and vendors know that. When we enter a store and see something we like, the motivation center of our brain is flooded with “upper” chemicals that make us want to buy. It’s that emotional state that can be devastating financially and we’re all vulnerable to it. Learning how to deal with this and get ourselves back to a logical thinking state is key, our kids desperately need to understand this too. This video shows more at the 8-second point.

3. To learn the value of things – when it’s the parent’s money getting spent, the child doesn’t feel or recognize the investment being handed over. It’s totally understandable, we don’t feel the true cost of things when other people pay for us either. Also, when our kids buy their own things, it allows them to learn about good quality items and poor quality items more quickly. All of these lessons are learned through experiential learning not just watching. It’s just like learning a sport, you need to do it yourself for the real learning to occur.

 4. To learn when it’s gone it’s gone – opportunity cost

Making great choices helps lead to a great life. In this fast-paced world with tens of thousands of products available at every turn, it’s critical our children learn to prioritize and really think about what they want and why. This comes from defining their values, dreams, and goals.

Plus, spending money you have in your wallet is one thing, spending money you don’t have on consumer items is something totally different and very common in our society today. Avoiding overspending on consumer items is one of the most valuable lessons our kids can learn. Why?  Because unfortunately there are plenty of high-interest loan products out there wanting to get your child’s business in the years ahead if they go into debt. The problem is, once a person is in a cycle of high-interest debt, it becomes a vicious cycle that can be very difficult to get out of. This is not something we want our kids to experience, it affects health, relationships and all the key areas of life.

5. To practice their everyday math skills

This isn’t just about adding and subtracting, while those are very important skills, these experiences also included figuring out tips on a bill (percentages), currency conversions (again percentages) and creating a spending plan so they didn’t run out of money before the end of the trip. This type of practice rarely occurs in today’s world unless the parents give their kids the opportunity. Ever been in a store or restaurant when the cash register broke and the cashier was having trouble making the proper change? Yes, me too.

Learning how to calculate percentages is a real life skill that can be used in everything from sports to cooking and forms a basis of knowledge for understanding interest charged on a credit card or, on a more positive side, returns on an investment.

6. To learn to save – delay gratification and learn self-control

Numerous large studies show that self-control in young children is directly related to their financial success in adulthood. Allowing our kids to set goals and save for them is one of the most effective lessons we can teach which will lead directly to helping them develop good financial habits in the long-term.

7. That the pre-purchase “high” wears off – quickly

Max nearly spent the majority of his savings twice at the beginning of the vacation, once for a jelly (see-through) skateboard and once for a Go-Pro. I gave him time to think things through and re-affirmed that I wouldn’t be funding the purchase or part of it. In under five minutes after walking out of the stores, he was able to list the reasons why it wasn’t good timing to buy the product, what features they were missing or why he wouldn’t use it much. Ten minutes later it was as if he hadn’t seen them in the first place! We were off on the next exciting adventure.

8. To learn the difference between needs and wants

These days the line between needs and wants can seem blurrier and blurrier. Having these discussions with our kids helps them understand what a true need really is (not the newest app!). It can make your life much simpler if you clarify that you are responsible for providing needs, the wants they can save for or put on their wish list. As parents, we have to get past the guilt factor for buying ridiculous amounts of stuff for our kids. It doesn’t help them in the long-run, in fact, it can make their adults lives much harder and less fulfilling. There is extensive research on the entitlement attitude by Dr. Bredehoft and it doesn’t work out well for those kids in the long run.

9.  Gratitude

The best way to appreciate things is to ensure you take time to reflect on them. At the end of each day we discussed all the exciting, wonderful things we saw and did such as visiting friends, and while writing down our spending details, talked about the fun new items we purchased. Gratitude has been proven to increase happiness and it’s more important than ever to do this with our children. It’s way too easy to fall into the “not enough” trap in today’s world.  Here’s a gratitude list you can use with your kids.

10. Super bonus: To learn yet again that life experiences and relationships create longer lasting and more meaningful memories than things.

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Am I happy I stuck with this decision to let them manage their own spending money? Absolutely Yes! They appreciate their purchases far more than they would have if I bought the items, and they learned a lot of great life lessons along the way. The hardest part was for me  – to not cave in and buy stuff for them.  I’m really glad I didn’t though, it would have robbed them of all these learning opportunities.

Cheers, please share thoughts or suggestions!



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