Guiding the Spend

By Alec Lindenauer, Chief Allowance Officer

A few weeks ago, I was talking to a COR parent in the midst of implementing his second COR Day. For the uninitiated, I’ll translate: 

I was talking to a dad who is fully onboard with the idea that allowance is a fundamental platform for getting your child on a money savvy path. 

He’s “all in” on the idea that allowance is more than just the practice of handing his children money. It’s a ritual to use for guiding our kids about spending, saving, donating and giving … not just on allowance day, but also on an ongoing basis with a strategic plan.

As a result, he consumed all of the videos in our flagship course, “How to Get Your Elementary-Aged Child on the Money Savvy Path” in pretty rapid succession. 

While preparing for his second, new strategic allowance day on the first Sunday of the month (now branded as his COR Day), he posed a great question. 

He asked me: 

“What rules should I impose upon my daughters with regards to their spend buckets?” 

In the course videos, I had already explained that my kids have pretty free reign to spend on what they want, but he was looking for a bit more guidance.

Here’s the thing …

It’s important to let your kids spend on what’s important to them. 

Yes, you’ll think many of their purchases are frivolous. In fact, I can guarantee it. But I can also tell you to prepare for some surprises. 

For one, you’ll be surprised sometimes at how rational and disciplined your child will be with ther money. (Yes, sometimes … let’s be real.) Other times, you might find that what you thought was frivolous, actually wasn’t. 

I often tell the story of my daughter buying herself a mermaid tail to wear while swimming. I thought it was ridiculous, but she wore that thing until it was riddled with holes. Once upon a time, it was her favorite, most used toy of the summer. Money definitely well spent. 

So I told this dad the most important spending rule to implement with your kids is that all spending must follow the house rules. As an example, your kids shouldn’t be buying candy bars to eat for breakfast if that’s not allowed in your house. 

But beyond that, I recommended this: Try to restrain from adding any other rules. 

Case in point: My daughters aren’t allowed to buy glitter. I hate glitter. There’s no glitter allowed in the house because it gets everywhere. But erasers, pop-its, candy, stuffed animals … all fair game. 

BUT … They must still follow the house rules. Even if they buy candy, they can’t just eat it whenever they'd like to. My girls know they can eat it only at the appropriate time. 

So, if your child wants to buy another stuffed animal, another Minecraft skin, or a third app to edit photos, you’ll probably see it as frivolous. I would too. 

But, what are you trying to teach them? What is your “WHY?”

That’s the important question to ask when you are questioning their spending habits and decisions. 

Are you trying to teach them that every purchase has to matter? That every time they spend money it has to have meaning?  

If that’s the case, then I should be scolded for spending $5 on a movie rental. Or for spending money on a pricey dinner when I could have cooked at home. 

What you might see as frivolous, they might see as entertainment value, and that’s alright. What we should be teaching them is to think about their purchases in a mindful manner. 

Instead of rolling your eyes at a purchase, or restricting it, instead try asking two questions: 

First, “Do you need this, or want it?” Then just see where that dialogue goes. And based on that, try one more follow-up question … something specific about the purchase. 

Perhaps, “What future purchase might you have to give up if you buy this?” Or, “Can you find it for a better price?” 

Any thoughtful question will do. One that’s thoughtful for you, and for them. Then take the dialogue from there. 

If they still are ready to go for the frivolous or impulsive buy, then you might say, “I wouldn’t do that with my money, but I’m not you.” Or, you might want to remind them how long they have until the next allowance day. 

But perhaps they’ll proceed, and you’ll get to remind them of the purchase at a later point when the right teaching moment appears. A gentle reminder about their frivolous purchase a few weeks later can be a powerful tool if they’re looking to buy something, but have run out of money for the month.

I want my kids to learn how to be mindful spenders, not that spending on entertainment is bad, or that every purchase has to be “worth it”. That’s the more important lesson.

Our entire COR philosophy is based on the idea that letting your kids have ownership of money, and giving them opportunities to practice with it will yield excellent learning opportunities. Again, I ask … What is it you want them to learn? 

Always come back to the “why” of your strategic allowance program, and remember… allowance is not free money. It is a teaching tool. 

Try to let the money do its thing by standing back and let their experiences do the teaching while you do the guiding.

Teach cents-ibly,
Alec