Kids and Spending

Research shows that children in the United States spend lots of money. Before 1990, spending by children ages 4 to 12 almost doubled every 10 years. In the 1990s, it tripled. Currently, children spend $40 billion every year.

Of course your own children don’t spend all that money, but if they’re like most kids they do spend their allowance or money from a part-time job on games, movies, food, and activities.

Cash or Credit?

How do your kids spend their money? The most common method for kids is cash, and sometimes kids use gift cards.

Cash is considered the best way for kids to spend their money because they are too young to use checks and credit cards, and cash is easier for kids to keep track of. When it’s gone, it’s gone.

How Do Your Kids Spend Money?

We want to hear from you. Do you agree that cash is the best method? When your child is older but not yet an adult, would you open a debit card with your child or co-sign on a credit card?



Packaged Facts, “The Kids Market in the U.S.,” seventh edition, a Packaged Facts report, May 1, 2006.

James U. McNeal, The Kids Market: Myths and Realities (Ithaca, NY: Paramount Market Publishing Inc., 1999).




These tips are all good. I disagree with the “secrecy” of a families finances or income It can only foster a degree of distrust, ignorance and/or shame. Financial literacy needs to be taught in several places and from various sources. As young children and teens begin to identify financial wants and needs their ambitions have to be balanced, even tempered by financial knowledge. In America we have embraced prosperity as an assumption and a goal that can be moved towards rapidly. Almost at will. New economic realities and unsustainable personal debt have put families in a position never imagined. I advocate an approach that makes finance part of every day conversation. Conversation like reviewing the family budget, discussing how much money will be needed for upcoming activities (weekend, social commitments, consumption, etc.), Regularly scheduled financial conversation creates an ease. It moves away from the tragic, the hostile, the confrontational, the chaotic, the emotional. If young people learn to discuss and plan financial matters at an early age they are less likely to make severe emotional mistakes as adults. Imagine a young adult who can choose to wait for a want, and at the same time promptly pay their bills. It is necessary to equip young persons with knowledge and understanding of how financial decisions impact their futures. By instilling awareness and forethought the individual, the family, the community and the country are better off. That’s my two cents…