If you're a big shopper or always coming home with new items, your kids are going to be similar. So watch out, parents of middle schoolers, because that's the age where materialism is most likely to rear its head. But are there ways to amend this behavior, or is it already too late?
We know from research that it's right around this time where material possessions — who has what compared with other children — become a source of judgement from other kids, as well as a measure of what we think about ourselves. And like so many other facets of life, kids take their lead from parents.
A study from the University of Missouri pointed to the fact that three particular parenting strategies can lead to an increase in materialism — so try to banish these from your parenting arsenal.
- Rewarding children with things (i.e. paying for grades or good behavior with gifts or presents)
- Showing affection with material items (i.e. bringing home a gift because you weren't able to be there yourself)
- Punishment by taking something of value away (i.e. a phone or favorite video game)
Another important concept to keep in mind with kids this age is that they have to have money in order to learn to manage it. Think about it this way — the older you get, from childhood into adulthood, the more responsibilities land on your plate. By the time you're out of college, you'll have a job and you'll need to make the money you earn in one pay period stretch to the next one — as well as leaving enough cushion to deal with expenditures that only come along monthly or quarterly. Everything we're doing up until then builds to that point.
One great way to make sure your kids have that experience is with an allowance. Research from the American Institute of Certified Public Accountants found that 6 in 10 parents give an allowance — most start by the age of 8. The way to make an allowance an actual teaching tool is to increase the list of things you're no longer willing to pay for as your child gets older and, essentially, force them into budgeting accordingly. For example, in middle school they might use it for school lunches, fill-in school supplies, video games, bake sales and other school fund raisers, entertainment with friends. In high school, that list expands to include clothes, sports equipment, gas for the car, optional grooming (manicures, highlights, etc.), gifts for their friends, and entertainment with friends.
(And if you haven't started an allowance yet, it's time to consider it. According to Money magazine, "kids who get an allowance tend to be more financially savvy than those who don't. They score higher in a test of pricing knowledge, and they are less likely to mistake credit as a limitless form of currency.")
How much weekly allowance is typical? Here's what kidsmoney.org says, which runs an ongoing survey on amounts:
10, 11: Between $7 - $8
12, 13: Between $9 - $10
In this electronic age, you have many choices of how to dole out these payments. In elementary school and middle school, I'd give cash. It's important for kids to get use to transacting with actual money. But as they get older and into high school, you can go electronic. Take your teens to the bank or credit union and open accounts that are linked to yours (that way you usually won't have to worry about them maintaining a minimum balance, or an extra cost for the account). Have them sign up for online banking and get passwords and a debit/ATM card. Then schedule transfers to deliver the allowance on a regular schedule.
Your kids can download the banks app on their phones so that they can watch their funds. And they can link their accounts to Venmo or Zelle (the new Venmo-like service from the bank) so they can pay their friends back when they split bills. (You should be on Venmo or Zelle, too, by the way so that they can funnel money back and forth to you.) And because the accounts are linked you can keep an eye on the flow of funds. One note: Do not get them overdraft protection. If they overdraw, their purchases should be turned away - it's a little embarrassing, but it's better than a $35 fee. Instead, have them sign up for alerts so that they know when their account dips below a certain level.
Finally, there will come a point where it will not be enough. Your kids will ask for a loan until the following week? Take it on a case-by-case basis, but if you do it make sure you charge enough in interest that it actually hurts. The 4%, for example, that we pay on a mortgage, isn't going to do it. The 25% that some credit cards charge is more like it. But it can't be annual interest, if you want the lesson to be felt - it has to be loanshark interest. If you give your kids a $10 advance on next week's allowance, they a month to pay you back $12.50. They need to decide if it's really worth it. Hopefully, they'll see that it's not.