Sent to you by john taube via Google Reader:
Failure is the best teacher. So why not let kids fail financially?
That's a debate my wife and I have had in recent months regarding our 13-year-old son. He's not one to regularly want to spend money, but when the urge strikes, he wants to spend every last dime he has—like wanting to take $800 out of his savings account to buy his own laptop computer.
My wife is quick to want to suppress that urge—to the point that she will very nearly forbid him from spending. That generally devolves into arguments between the two of them over "whose money is this?" And, my son will ask, "why can't I spend my money on what I want?" My wife's counterargument—common among parents—is always about saving for college or a first car. She'll often turn to me, a financial writer, for wise input. (I offered The 15 Money Rules Kids Should Learn in the Sunday Journal.)
But my input doesn't jibe with her thinking. The way I see it, kids should be allowed to fail financially (Rule No. 9).
The best lessons in life come from the experiences that leave a mark. And what better time for a financial mistake—like spending all your money on an immediate want—to leave a mark than when a kid is still so young that the screw up impacts only mood and emotion rather than financial security?
With sympathetic parental input after the fact—not the useless "I told you so" lecture—I'm convinced kids build on such financial failures and incorporate wiser analysis into their spending decisions as young adults.
But who takes the other side of this debate? Should parents always act to protect kids from stupid spending decisions? Or should we allow them to fail as a way of teaching them the financial lessons they need to learn?
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