Should Children Be Allowed to Buy Everything with Their Own Money?
Financial Literacy

Should Children Be Allowed to Buy Everything with Their Own Money?

The following generally applies: Children should be free to do whatever they want with their pocket money. But parents are not always that happy about leaving purchasing decisions to their children. In his column, Daniel Betschart of Pro Juventute explains how parents can grant freedom to their children while at the same time communicating sensible consumer behavior with them.

Give Leeway for Experiences

If children have the opportunity to control their own pocket money, they can have worthwhile learning experiences on the topic of handling money. This includes thinking about wants in addition to managing, saving, and weighing up decisions, setting priorities, learning to do without things, resisting temptation, and being happy, angry, and disappointed. Children realize that money is a limited good that must be budgeted.

When dealing with pocket money, there needs to be leeway for experiences that can sometimes be unpleasant. For child development, it is important to not only learn from successful experiences, but also from bad purchases – even if this leads to anger or disappointment. Maybe your talking robot breaks after a few days or your incomplete Panini collection causes more frustration than joy. Such things are annoying and sometimes difficult for parents to tolerate. But because of this, the child will probably think more carefully about what they want to spend their pocket money on next time. Parents need to hold back in order for the child to experience such learning moments.

Observe Legal and Family Rules

Parents have the obligation to protect the well-being of their child and to promote their development. If it involves the purchase of life-threatening things like alcohol or weapons, parents should intervene. An 11-year-old child, for example, isn't allowed to buy cigarettes with their pocket money.

For other wants like computer games, candy, etc., parents can ask themselves the following questions:

  • Does the item purchased or desired endanger the health or development of my child?
  • Are the consequences of the purchase acceptable for the child and can the child cope with them? (e.g. negative comments from other people about certain clothing items)

If parents don't see any harm in the purchase, they should allow it. However, family rules are a sensible solution. For example, parents can make a rule that the child needs permission if they want to buy a computer game with an age rating higher than their age. Or: Sweets may not be eaten before having a meal. Therefore, this rule also applies to gummy bears the child bought themselves, of course.

Family rules should be discussed with children and be reviewed and adjusted from time to time. It is a chance to discuss and negotiate values and rules, as well as to accept compromises for them.

Family rules should be discussed with children and be reviewed and adjusted from time to time.

Daniel Betschart

Discussing Consumption

Besides necessary things, we all buy luxuries: brand jeans, smartphones, action figures with guns, or even talking ponies. But do parents have to allow purchases that they see as being inappropriate?

If the child actually has enough money, then they can buy a smartphone. But having parental authority, the parents can help make decisions on how the phone will be used, and make restrictions. By law, the child can only get a subscription with the consent of the parents. 

Parents can hardly forbid the child from purchasing expensive jeans or the newest trendy product, if the child can afford these things. However, you can talk with your children about using money, about values, and about consumption. It is also an option to explain to your children what you think about certain products and how things are made – perhaps at the expense of others. That is an important educational task.

In these conversations, parents can make connections without moralizing: What alternatives are there? What values are important? And how does advertising tempt us to do things that we don't need to or that we cannot afford? The consumer world is becoming more and more complex, and children need support in order to navigate it. Parents should look at, inquire about, and question certain circumstances – not just involving their children, but also themselves – because children look closely and find it difficult to understand if they are supposed to behave differently than their parents.

Maybe parents can also control the consumption behavior of children through the amount of pocket money. If less money is available, they may have to save longer for that next pair of sneakers. During this time, the saving goal may change and the purchase of the article in question may become unnecessary.