I have a funny story to share about teaching kids about money. When my son was four years old, his grandparents gave him five dollars for his birthday. We went to the store to pick out a toy, but the one he really wanted cost eight dollars. As he received a dollar a week for his allowance, I explained he'd have to save his allowance to make up the difference.
Three weeks later, he had enough money to buy his birthday present. He was really excited and proud of himself, but when he and I were out for another reason, he found beautiful marbles in a home décor store. He really wanted these marbles, so I told him he had to buy them with his own money. They were three dollars. I gave him the money and told him to reimburse me when we got home. I'll admit it - I set him up.
When we got home, he happily went to get his saved money and went to another room. That's when I heard a woeful cry from a distance. "What have I done!!" He had just realized that he didn't have enough money now to pay for the birthday toy he wanted. He cried and cried, "Mom, please lend me the money and I'll pay you back." Those sad eyes were very hard to refuse, but I explained that he chose to spend his money on marbles, and I would not lend more to him. We dried his tears, and we discussed how he would have to be patient and save his allowance. Three weeks later, we went to the toy store, and he proudly bought his birthday present.
He's 22 now and he never spends a cent without a large amount of research and patience and doesn't spend what he doesn't have. So, the moral of the story is it's never too early to teach life lessons and it really is okay to let your kids make mistakes!
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