Personal Finance For A Nine Year Old

A few weeks ago, one of my daughter’s friends got a new computer game, and the two have been playing it ever since. However, my daughter, Tori, cannot play it unless her friend brings it over to our house, or she goes down her her friend’s house. So, naturally she wants her own copy.

She had recently spent all her saved allowance money, so she was starting from scratch saving up the $20 for the game.

Last Friday afternoon, when she got home from school, she exploded through the front door, ran up to her room, and grabbed her piggy bank. We opened it up, and she counted $5.48. Adding that to the $9 I gave her that same day for allowance she had a total of $14.48.  Not enough to purchase the $20 computer game she had been coveting.

She was crushed. She had gone through the whole day assuming she would have enough money to purchase the game. In fact, she had made plans to play it all night and was really looking forward to it. If only she had budgeted, tracked her expenses and savings, or had an emergency fund!

After an episode of pouting, she came and sat next to me.

In her sweetest voice, she calmly asked me if I had any jobs I could give her so that she could earn some extra money. I was proud of her as I realized my daughter just exhibited the drive to work extra by getting a second job when more funds were needed. But, the lesson of the day was patience. I explained to her that I would be happy to give her extra responsibilities for additional pay as the need would arise, but that that that very moment I didn’t have anything for her. Sometimes you have to save and wait to get what you want.

Round 2 of pouting ensued.

She came back for more. This time, she asked if I could give her next week’s allowance now, and then just not give her allowance next week.

 Did my daughter just apply for a payday loan? Gasp!

I launched into a speech about the dangers of taking out a loan to get something now, when all she had to do is wait a week. What if something else came up? What if she got asked to go to the movies, or ice skating?

Ding, Ding….Pouting, Round 3.

She then accepted that she was going to have to wait until the following Friday in order to make the purchase. Throughout the week she performed her responsibilities, thinking ahead to when she would have enough cash in her pocket to buy the game.

In the course of 10 minutes, our conversation ran through many major personal finance concepts:

  • Budgeting
  • Savings
  • Emergency fund
  • Working a second job to earn extra funds
  • Unexpected expenditures
  • Payday Loans
  • Cash is King

Did she really fully understand them all? Probably not.

This isn’t the first time we’ve discussed these concepts, nor will it be the last. By repeatedly discussing money and handling finances the right way I hope to lay a foundation that will give her the right perspective and built the good habits to last a lifetime.

What was the last time you discussed personal finance with your child(ren)?

About Travis

16 Responses to “Personal Finance For A Nine Year Old”

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  1. @Travis I love this post! Your daughter sounds like my son when he hasn’t saved enough for the coveted game/toy. He is quite the little manipulator and if mommy doesn’t give the answer he wants he calls his dad, grandma, and will even ask my boyfriend if there is anything he can do to earn extra cash. I believe he understands the hard work part, but still has the “I want it and I want it now mentality” that gets both him and many adults who should know better in trouble. This is a great lesson for young and old alike! 🙂

  2. I know that’s the mentality that got me into trouble, Suzanne. My post (attempts) to take a light and humorous approach to looking at the issues, but so many people (including myself) act the same way, resulting in more and more debt. So, let’s all take a lesson from Tori, and even go off and pout for a little bit, then accept that most of us will have to be patient, work hard, and save for awhile to have cash in hand in order to make those purchases we are looking forward to!

  3. Scoblentz says:

    Awesome post Travis! I admire you for remaining true to the lesson, while withstanding not one but THREE pouting sessions. I am typically worn down after only two myself. Great job and a great example of what it takes to give your kids everything they need to be successful adults! Kudos

    • Three pouting sessions is pushing my limit as well, scoblentz! I was happy to see she went into the “acceptance” phase as I don’t know how much more I could have taken on a Friday afternoon..LOL. I think all in all the most important thing that will sink in when she gets the game is the pure appreciation of it. She will have a better understanding of what it took for her to earn the game over time instead of getting it via immediate gratification. The underlying principles of saving and not going into debt will come, but I think having her learn to appreciate the things she gets is very important at this stage.

  4. I wish my 10 year old daughter even had as much financial knowledge as this. I don’t know why but my daughter has ZERO interest in money. She doesn’t care to save up for things, she doesn’t care to do jobs for money, she just doesn’t care about it. Which frustrates me to no end as you can imagine. 🙂

  5. Personal finances student in training. I love it! I’m sure she understands more than you think.

    You forgot that negotiation was also a lesson. Using techniques like pouting can be a risky negotiation technique.

    • Great point, Shaun! I suck at negotiating, but my kids seem to have it mastered. I’m hoping she grows out of the pouting….but then again, I see lots of adults (including myself) use that technique too. Haha!

  6. Awesome lessons for your daughter! I think the one about patience is probably one of the most important, since so many adults don’t have much of it.

    • I agree on the importance of patience, Kris! That is one thing that I can say that I have learned well during my journey out of debt. Sure, I have a “wish list” of things I would like to have…as does everyone. But I’m not really overly anxious to get anything on that list, because none of them are “needs.” When the money’s there, then I can get them. Until then…I’ll enjoy what I have.

  7. I admire you for bringing up your kids so well and teaching her the value of money at an early age. In my case, despite the attempts to teach them how to save, they still spend all of their money whenever they receive some.

    • Thanks for the support, Cherleen. As with all kids, they have their moments when they make me proud (saving their money for something “bigger” down the road, etc), but then they have their moments when they need guidance. I hope and pray that what my wife and I lay down as a foundation will help stay with them and prepare them to manage their money as they grow into adulthood.

  8. Way to go Travis! She will tell stories. Now – you are a meanie. Later- you are great and taught her so much. I know that because my mom was the same way. I started teaching my kids early also. Thought you might enjoy this post and how I taught my kids about money http://inthetrenches2009.blogspot.com/2010/11/excerpt-from-in-trenches-if-kids-were.html

    • LOL, Carol…being a meanie isn’t much fun, but I know it’s for the best. I took a quick look at the article, looks like an interesting read (as does your entire blog – which this was my first visit to) – looking for ward to taking a closer look later today!

  9. ImpulseSave says:

    Great post! It’s so funny to look back and think about when you were a child. To a child, it is just another traumatic experience of not getting her own way, but in actuality she is learning several important lessons. I hope she earns her game the old fashioned way – or maybe next week it will be something new she wants!

    • I’m happy to report that my daughter was able to purchase the game with cash last weekend. She’s been playing it hard core (well, as much as we’ll let her) ever since. As I suspected, she takes very good care of her game, ensuring she is extremely careful when putting it in, and taking it out of the CD drive of the computer. She also puts it away when she’s done playing…..so that nothing happens to it.

      You make a great point though, impulsesave – sometimes when a person has to wait to purchase something, once they are able to buy it, it doesn’t appeal to them quite as much. That’s why impulsive buying is never a good idea – in my opinion.

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