Children's spending of own money

I'm curious, what do your young children (8-10 year olds) spend their own money on?  My child has money he gets from gifts, finding change in pocket while doing laundry or on floor while cleaning (which he can keep), and some extra tasks he gets paid for (like tutoring younger sibling, doing chores not assigned to them, babysitting, etc.).  Our rules are he has to put 50% of it in the bank to be saved for car or large parent approved purchase (likely a cellphone in a few years), and the other 50% he gets to keep for spending.  Anything above the 50% he adds to the bank account we match to encourage more saving.  The amount he keeps for spending in his piggy bank he uses to bring to school to buy candy or other stuff from various fundraisers, buy school lunch (we always send home-made lunch with him but if he wants to buy lunch or snacks he is allowed to use own funds), uses during the Scholastic book fair to supplement the funds we give him, uses to buy gifts for family (sometimes as we encourage hand made gifts), and birthday gifts for some of his friends (we cover most of them, but some he contributes to in order to make it nicer).  I know roughly what balance he carries in his spending money fund (and his saving account is on track and doing well) and as we are making the decision to implement an allowance for him we are curious other other kids use their free-to-spend money on in order to set his allowance accordingly (or not do it at all) or increase the expenses he is responsible for.  

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My daughter's spending in elementary school was similar to yours: school lunch (until she got sick of it) and book orders, mostly. We divide her allowance into three bins. In addition to the "spend now" and "save for something big" (with approval from mom and dad), we also designated 20% as "save for college." I figured it was never too early to learn that you don't get to keep you entire paycheck (I remember my shock at my first real job seeing how much money taxes ate up), and it also got her thinking about and invested in (literally) the idea of going to college.

Now that she's older (15), she spends more on snacks and going out with friends, clothes, gifts, and other "wants."

My own goals of my kid spending his own money are:  1) learn delayed gratification  2) make good AND bad purchases to learn from experience and  3) learn value of money and how to spend carefully.  So I actually want him to spend and control his own money.  Allowance was purposefully modest : $1-2 per week. $1 starting in kindergarten $2 by 5th grade, with no requirements placed on it.  There was also the tooth fairy, plus birthday/christmas money from grandparents totaling under $100 each year (w/context that the grandparents wanted him to choose a toy). He's had a bank account since infancy. We had engaging conversations about the importance of having savings for the future... since saving is happening voluntarily, we don't have a formal requirement.   Routine household chores are are not compensated, but there are occasional opportunities to do an extra chore for money.  When he finally bought the coveted Nerf, he took good care of it.  He carefully researched lego sets before choosing the perfect one.  Buying toys from yard sales or flea market with his own money was a popular pastime.  He learned that buying secondhand was a often a good value.  Buyer's remorse is also a powerful teacher -like  buying a toy that looked fun based on marketing (but wasn't), or a toy that broke quickly, or that time he just had to buy an artificial blue drink out of a vending machine, then after taking one sip, thought it tasted terrible, and ended up dumping a nearly full beverage down the drain.  $1.50 worth of regret was well spent that day.   When we are out running errands, one of my pat answers to requests to buy restaurant food/fast food/snacks is, "Sure, with your own money."  If buying food, etc from concessions is part of the outing, I will hand my kid a bit of spending money - whatever is not spent, he can keep, but if he wants more, it is from his own money.   His having control over his own money really shuts down the asking to buy things.   We encourage and model generosity too, sometimes he will buy a small gift for a friend or family member when he sees something he knows they would like.  He has accompanied me every December since toddlerhood to buy a toy and deliver it to the local fire station for Toys for Tots; last year he decided on his own to buy one with his own money.  By middle school, I think he had a lot of practice at saving, delayed gratification, and making spending decisions.  I do have to say a calm personality and lack of impulsiveness has helped too. 

We didn’t budget what portion of our child’s allowance money could be spent on what. We talked openly about our own spending decisions, so that we communicated that every decision was a trade off of some sort. We explained that we saved for larger purchases, then, when they wanted something more expensive, we helped them figure out how long they would need to save for that purchase. Before long we were parenting a champion saver.

Very early on our kid started making charitable contributions on their own, with no urging on our part. In fact, one day they told us that we should be giving a lot more to charity; we told them how much we did give and that was the end of that.

Now our kid is about to graduate from college. At the beginning of their freshman year we gave them all four years worth of the money we had saved for their spending money during college. They understood that it was up to them to budget effectively. They did such a good job that they are graduating with a full *year’s* worth of spending money still in the bank, and this is after they paid the full cost of an optional summer language program overseas (for which we offered to pay). Obviously someone else might have made very different choices, but I think the freedom to make their own mistakes was important in how they manage money today.

Also: I think that if we had required them to save for something ten years out - like a car when still in elementary school - it would have been too abstract. That timeframe is just unimaginable for someone who still announces their age by including quarter-years.

Have you ever heard of "The Opposite of Spoiled" by Ron Lieber (I think)?

I think we will follow the philosophy described there when our kids are old enough to deal with money.

You basically have three buckets that you ask them to think about:

1. spend (now now now :o))

2. save (for future use)

3. share (i.e., charity)