Do your children ask for expensive toys? Chances are that they've asked for something with a price that made you gasp.
Say "yes," and it could cost you hundreds of dollars. The temptation to purchase with a credit card and deal with the payment later is strong for many parents. Whether you can or can't afford it, you can turn these requests into teachable moments by planning how to respond to them in advance. Here are a few tips to get you started.
Start the conversation about spending
A child asking for anything that costs money is an opportunity for financial education. Use your child's gift request to initiate a conversation about spending, saving and prioritizing. Consider asking your child these questions:
- How much does it cost?
- Where will the money come from to pay for it?
- How do grown-ups earn money?
- Can you think of ways to save up for this?
Talk them through a budget
Consider discussing with them the limited amount of resources in your budget to purchase extra "wants" for everyone in the family. Take some time to walk through the toy aisles in a store and look at and compare prices so they begin to understand the relative value of different toys. If you believe the toy requested is not going to hold their interest very long, maybe suggest a lower-priced option they would actually enjoy more or an outing that would create an even longer lasting memory.
Have your child research buying options
When your kids ask for an expensive gift or say they want to purchase a large item with their savings, have them do their research first. Ask your child to:
- Shop around for three price quotes. Then, show them how to evaluate costs, including shipping.
- If there are similar alternatives, have them make a grid to compare features and ratings. Then, ask them to explain how they made their choice of the best buy.
Consider buying a gently used version
If your child is interested in a toy that's been around for a while, consider buying a gently used version online or at a thrift store. Take trading card games, for example. For the price of one new pack with 60 cards, you could buy an entire set of thousands from a teenager who has outgrown them.
Sell or give away their outgrown toys
One family's cluttered playroom can be another family's treasure. Kitchen sets, dress-up costumes, train equipment and building blocks are just some of the great items that can be sold from an online marketplace to make some extra money. Other parents are looking for a great deal, too! When your child has outgrown a toy, encourage them to either give it away or sell it and apply the proceeds towards the expensive new item they want or to their savings account to fund another goal. (Hint: model that behavior by selling off things you no longer use and watch your kids catch on even faster!)
Not every toy request needs to be a teachable moment. Still, if you keep your eyes and ears out for money-related decisions and little things you wish your parents had taught you, you can set your kids up for future financial success!