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Financial Lessons Learned By My Son Today!

Pokemon Kitty

Well something amazing happened today. My son all of a sudden wanted to sell his old Nintendo DS games and Transformer Toys that he never plays with.

So we hopped on eBay and did a search for his DS games that he wanted to sell. Unfortunately, they only were worth about $5 to $10 dollars. I winced a little at the hurt look on this face. Some of his transformer will go for over $10, but not much more, maybe top side will be $20.

So after a few eBay searches, I asked him why he wanted to sell them… That when he told me. He wanted to buy a new Pokemon DS game that just came out. But just last week he spend all of his money and took a $40 loan out from me to buy a $120 Lego Star Wars ship… And now he’s realizing he should have held off on the purchase! He learned a small lesson in opportunity costs. You see he has about 25 Lego star wars models already, and he’s been waiting for the new Pokemon DS game to come out!

So what lesson did he learn?

  • The first lesson, not to go in debt! He won’t be able to afford that DS game until mid summer.
  • 2nd lesson,diminishing returns on the Lego Star Wars ships… I mean how many of these does he really need?
  • 3rd it smart to keep some money aside for be events that are important. So he learned about a weak form of an emergency fund (although it’s not really totally that, it’s similar enough…)

I refused to give him the money to by the new game. To do so would ruin the lesson. I do feel bad that all of his friends will have the game and will have mastered it by the time he finally get it. But I think the lesson is much more important!

So it was a tough day for a nine year old!

-D

24 Responses to Financial Lessons Learned By My Son Today!

  1. Aww I feel bad for the kid. But standing your ground will for sure get him to learn his lesson.

    My little cousin loves those Star War lego ships and they sure ain’t cheap.
    .-= moneyhoneysf´s last blog ..Company Profit Sharing =-.

  2. @MoneyHoney
    I feel bad too! I want my kids to have the things that they want in life, but I also want them to be financial responsible.

    This particular time is the first time we’ve ever been at that point! I’m not going to cave…

    But…, I will help him make the extra money on eBay if he wants to sell his old toys!

    So if I do it right, his little problem is a great opportunity for me to teach him multiple things about finances!

    I just hope he doesn’t get too confused :)

  3. Tough love! :) Funny how’ll you feel bad, he’ll never remember that particular moment, but he’ll thank you years down the road for your diligence.

    Ever heard of the 30-30-30 rule for kids? Not sure how it changes with age, but the premise is spend 33.33%, save 33.33%, and give 33.33% in an effort to make them well-rounded and appreciate money in all capacities.
    .-= FinEngr´s last blog ..Maximizing Value, The Opposite of Earn More Spend Less =-.

  4. @FinEngr
    Even if he didn’t thank me but was financially stable as an adult, I’d be happy :)

    My kids are really young, We give to charity, but we don’t follow a strict percentage basis yet. I may switch to that model as they get older though.

    Honestly, I’m kind of torn on that percentage model…

    If you’re rich, then sure why not, 30-30-30.

    But if you aren’t wealthy, I think a model more like 40-40-20 or 45-45-10 is more doable if you’re middle income kind of family. Then volunteer a few times a year with some charitable function.

    And if you’re poor, then it’s to hard (and illogical) to give away money if you don’t have money to give away. But you can contribute time or help out.

    Hmmm, I think you just gave me a topic to blog about :)

  5. Wow, this is awesome that you are teaching your nine year old these principles. Most people would just give in. I’ll have to try and follow this when I have kids one day.

    Do you mind if I add this to my new blog carnival (obsessedanalytic.com/carnival/) about saving time and money? I think the personal story makes it a great read!
    .-= Ryan´s last blog ..How to Build a Homemade Hot Air Balloon =-.

  6. @Ryan
    Yeah, I’m sad for my son, but also excited that I get to teach him these lessons (if I do it right!)…

    Please feel free to add it!

    In fact, thanks! I’m honored :)

  7. @Ryan @ Planting Dollars
    I bet making those legos, shipping them, packaging them, and sitting on the shelf space time, still only comes to about $15… Hmmm, now what the stock ticker for Legos again… hehehe

    LOL, for those prices you’d think he could. :)

    Last night was the first time I’ve ever seen him have buyers remorse!

  8. Good lesson to learn. I can’t remember ever having a $120 Lego anything, my how the times have changed. Mine just wants a Spider Man toy and he still has to wait to save up.

  9. Tough love is the way forward. If it was me I’d have charged him 0.1% interest per week on his loan on the Millennium Falcon. And then repossessed it if he didn’t cough up!

    Only way they’ll learn… ;-)

  10. I love that you are loaning him money rather than just giving it to him. What a tough but invaluable lesson to learn so early in life!
    .-= SeeJaneGetRich.com´s last blog ..February 2010 Expenses =-.

  11. @Kyle C.
    Yeah, and the funny thing is all boy’s love legos toys these days? You put them together, then play with them, and the break all the time??? Go figure…

    I see kids my son’s age with cell phones, and one has an iphone… Heck I’m too cheap to buy a iphone for myself let alone my son!

  12. @Monevator
    His only source of income is me giving him and allowance, so he just won’t get one for 4 weeks. ;)

    I’m impressed that he’s innovative enough to want to sell his old toys. it’s kind of cool to seeing him think through this…

    Thanks for the comment, I always like to hear other suggestions… Sometimes I even switch to another, if I think it’s a better solution than my current one!

  13. @SeeJaneGetRich.com
    Hi Jane! Good to see you out and about :)

    I give him an allowance, just so he learns a bit about finances from his level… I’m sad, but excited because this is the first time he has went into debt. This is a great opportunity for him to learn about it… Teach them while they are young is my philosophy!

  14. @LeanLifeCoach
    Thanks! I was waiting for the allowance that I pay my son weekly to finally pan out!

    He’s been really good with money when he was younger (actually I think his mom curbed his spending habit a bit grrr), but now she’s letting him go. I finally brainw erh convinced her to let him learn. Trial and error, and experience is always better than hypothetical book examples.

  15. @Financial Samurai
    Unbelievable how much legos cost these days!

    Both my son and daughter get their Age number as an allowance dollar amount. Not the most expensive allowance, but good for them at their age.

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  17. I’m so sad that nobody commented on the similarities of the picture “Pokemon Kitty Evolving” and my son Pokemon kid evolving financially… (sniff sniff)…

    Oh wait, I just did :)

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