“Uh oh,” said Gabby after tallying the Are You More of a Savor or a Spender? questions during my 5/6 money class yesterday.  She had answered every single spending question with a ‘yes’ which translated to: she liked to spend.  Hanging at the mall, well that was paradise.  And she’s only 10 years old.  

A lot of parents don’t realize the potential problem in their kids’ spending habits because, hey, they’re just kids and what kid doesn’t like to spend?  Kids who really like spending money when they’re 10 will probably grow up to be adults who really like spending money.   And if not kept in check, it could lead to serious problems.

Time for intervention.  What Gabby, and a lot of other kids and adults need, are strategies for their shopping trips.   These will help her when she finds herself surrounded by temptation.  (The first big hurdle, recognition, was discovered when she took the survey.) 

Here are some strategies we came up with:

• Carry a limited amount of money when out shopping.  When the money’s gone, it’s gone.
• Never borrow money.  In fact, make sure your friends know not to loan you money.
• Shop with a list.  Never buy anything that’s not on the list.  
• Follow the 24-hour rule.  Wait 24 hours, (some may need longer) and if you still really want it and you have the cash, then go for it.
• Keep a record of what you buy and what it cost.  At the end of the week/month go over it.  Rate each item on a scale of 1-10, 10 being you would buy it again.  Make a concerted effort not to buy anything that was rated under 5 or 6 again…or at least, not for awhile. 

Now that Gabby has some strategies, she can head to the mall armed and ready to keep her spending under control.

But parents, you can play a role, as well.  Teach your kids the value of saving their money.  One way is by using KidsSave to introduce them to the power of compound interest.  That’s what worked for our youngest son.  When he realized he would end up with more money without adding a single penny, he was a believer.

Another way to encourage them to save is by setting up a little 401(k) plan and matching their deposits by a given amount.

Bottom line, most kids don’t know how to save and spend wisely unless we teach them.  And reaching the spenders early will not only benefit them but you as well.