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Don’t Be Afraid to Let Your Child Feel Some Financial Consequences

When I look back on the journals that I've kept since kindergarten {some in crayon scribbles}, I'm reminded of how far I've come in my money journey.

Sneak Peek: One of my most favorite entries is this really funny, dramatic essay where I moan about having to ‘drain' $13.00 from my account each week for gas (oh, the look of horror in my 16-year-old eyes at what our current monthly gas bill is)…

Yes, I've financially matured since then.

But it didn't happen overnight.

If I travel back through time, I can think of several mistakes I made with concrete (read: savings account-draining) consequences.

At the time, they were really painful {financially} to go through. Especially since I was earning my money mainly through mucking horse stalls, milking cows, and other forms of exhausting, smelly work.

But boy am I glad I learned them when I did compared with learning them as an adult…because when you're an adult small mistakes can have much costlier consequences, and even be potentially irreversible.

3 Financial Lessons from Childhood Mistakes

  1. There are Financial Consequences to Not Taking Care of Your Belongings: Flip back in time. The year is 1999, and I am a drummer in our high school marching band. I manage to lose my marching band tunic. It could have happened at any of the parades we went to, or perhaps on a bus to/from the event (to this day it's never shown up in my belongings). I dreaded each and every event we had thereafter because I had to ask to borrow one from the band moms, explaining yet again that I still could not find it. Then, the end of the year came. I signed over $385 to the band fund to make up for my mistake. Ouch.Flash Forward: I honestly don't think I've lost anything of large value (or perhaps even of ‘small value') since that band tunic. I am organized, and keep my belongings in good working order because I've realized how costly it is to replace them.
  2. Some Deals are Too Good to Be True: I was one of those teenagers who desperately wanted some CDs of my favorite music, but just couldn't afford to purchase them all. One day I found a deal in the mail from BMG (remember those guys?). It was something extremely tempting, like 5 CDs for $25. My mother gave me fair warning the first time I approached her with this unbelievable deal, but still dutifully sent in each check I gave her when I didn't want to listen. Then one day, it dawned on me. Since you had to become a member of the club and buy a certain number of CDs over the next year or so, it turned out that in the end, you really paid just as much for those CDs as you would have in the store. Except you spaced out the purchases. Doh!Flash Forward: I excel at finding great deals. By learning all those years ago to sit down and do the math before signing up for an offer that sounds too-good-to-be-true, I've developed quite the system for quickly sifting through fool's gold to get at the real thing.
  3. Sometimes You've Got to Cut Your Losses and Move on: One night my father offered me $20 to milk the cows. I decided that I would do it because I really wanted this new jean skirt from a catalogue (ordering from a catalogue was something I rarely did, so this was a special treat). So, I spent the two hours or so sweating it out in our barn, milking all of our cows, and showering off the manure smell right before settling into my homework. The next day I placed my order. But the skirt didn't come. Three weeks passed, then four weeks, then I just about forgot about it. Until a letter came in the mail letting me know that this company had declared bankruptcy. Yikes! All that work for nothing.Flash Forward: This is one of the hardest lessons I've had to learn, and honestly, I need a tune-up every so often. Things do not always pan out in this world. When I sink tons of time and energy into a losing battle, it's important to cut my losses and move on before investing even more time, energy and money into something.

I'm sharing this with you so that hopefully you can feel more confident and steady when allowing your child to feel their own financial mistakes. Learning these lessons when the consequences were relatively minor, and when I had my entire life to reap the benefits, really changed the course of my money future.

Do you have children? Share with us a financial mistake and consequence you let your child work through. Has it changed their thinking yet? 

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Amanda L Grossman

Personal Finance Writer and CEO at Frugal Confessions, LLC
Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.

Jack @ Enwealthen

Sunday 27th of April 2014

#3 is the hardest, and easiest to forget and relearn, forget, relearn, ad (hopefully not) infinitum...

In business school they teach you about sunk costs. The trap that just because you've invested $X (the sunk cost) you're emotionally invested in the outcome and tend to sink another $X into the same project, even though you'd be better off investing that money elsewhere. Key lesson? What's spent is spent, and not coming back, so make sure you are making the wise choice when it comes to where you make your next investment.


Monday 28th of April 2014

Yes, Jack, so very hard to learn and re-learn! That makes sense that it's the sunk emotions that keep us from seeing lost causes. Thank you for sharing!


Monday 21st of April 2014

I remember spending $15 of my own cash on a Super Soaker water gun when I was 11 that I immediately regretted. But I then decided to get my money's worth and used that thing every day that summer. I also remember signing up for a magazine or two from a guy at the door when I was 13 and home alone, but when I had second thoughts nearly immediately, my mom contacted the company and canceled the order and chided them for taking advantage of minors in their own homes. So I learned the lessons, but my largest mistakes were costly and later on. After college, my husband and I invested and lost $15,000 in a friend's game store business. That still stings to think about. But live and learn...

Amanda L Grossman

Tuesday 22nd of April 2014

Ouch, for sure. When we make a big purchase, years later I sometimes wonder what I could have done with that money, so I hear you!

Thank you for sharing your own money mistakes and lessons with us.


Monday 21st of April 2014

Ah yes, BMG! Been there, done that too!

Amanda L Grossman

Tuesday 22nd of April 2014

You too? Hahaha:). I imagine lots of people our age used to subscribe to BMG.


Monday 21st of April 2014

Oh, I love this because it brings back so many similar memories - especially the CD deal! We don't yet have children, but I know if/when we do, teaching them about finances is really important to both of us because of the things you mentioned. I remember getting my own phone line the 2nd I could afford it, and then hardly using it! OH, the price of independence :-)

Amanda L Grossman

Tuesday 22nd of April 2014

Thank you for sharing some of your own money experiences! I just think it's so important for kids to have these, even though it's going to sting (ah, that darn band tunic...)