With that first taste of independence—and a little bit of cash in their pockets—comes a whole lot of wasteful impulse buying. Here, experts advise on how to approach tween and teen spending.

Advertisement
An image of a crumpled dollar bill on a blue background.
Credit: Getty Images.

I used to think I was doing an OK job educating my kids about money. I make it a priority to talk to them about all things financial. I try to role-model a value system that prizes hard work, I explain what things cost, and I educate my kids to be ethical, thoughtful, and sustainable consumers (in other words, I rant about the evils of fast fashion on a near-daily basis).

Then, my oldest daughter, who's 11, started hanging out with her friends. Which mostly involves wanting to buy things: five bags of Skittles from the supermarket, multi-packs of peel-off face masks, cheap dangly earrings for aspirational piercings that don't yet exist, thousands of Fortnite V-Bucks (tweens are just as happy to burn cash on virtual purchases, in case you were wondering). 

And yes, after years of seeing me shop secondhand and extol the virtues of "buy less, buy better," I'm fairly confident she would sell her soul to get her hands on a Zara crop top.

I've seen enough tweens in the wild to recognize this isn't just my tween. They love the thrill of an impulse-buy, the buzz of instant gratification, the excitement of being out on their own. Many enjoy lavishing gifts on each other (a noble sentiment, although less appealing when it's my hard-earned money being spent). They're also incredibly skillful at convincing each other that necessities for "survival" include things like avocado-shaped Squishmallows, so they can burn through money at an astonishing rate.

Understanding how tweens think 

Research tells us that the prefrontal cortex of the human brain, which helps with decision-making and impulse-control, isn't fully developed until our mid-20s. So it's understandable that tween brains have little concern for things like...future consequences. 

"Those are things that are very hard for them to do because their brain just doesn't add up that way. They need to have A plus B plus C in order to think through how their actions would impact their future, and they just don't have all three of those letters to do that," Dr. Scyatta Wallace, psychologist/teen expert, member of the American Psychological Association and CEO and founder of Janisaw Company, tells Parents

While I love watching my tween discover her interests and passions, I do find it irritating when her spending feels wasteful and impulsive. Until I remember my own childhood, and my mother's exasperation at how I too could make cash disappear in minutes, with "nothing to show for it." She may not have thought much of the sticker books I'd fill with collectible Oilies liquid stickers, but I cherished them (also, they were my primary source of social currency as a 5th grade sticker-swapper).

"You may want to consider not giving them your last dollar, because it could just get spent on garbage—what you perceive as garbage, but may not be for them. We have to limit our judgement of what they should be buying, unless it's something that's dangerous or terrible," explains Dr. Wallace. She describes this stage of tweenhood as "almost going back to toddler years," a time of exploration and discovery where they're trying to figure out what they like and who they are.

Dr. Wallace reassures me that exploration and impulsivity when it comes to spending is very normal for the majority of tweens. In fact, making these throwaway purchases is part of their development, and the best thing for parents to do is to be supportive, not judgmental. This generation has influences coming at them from all angles, with pressures from social media as well as peers. For tweens trying to figure out who they are, having the right "stuff" can cultivate a sense of belonging and connection with others.

"We always say, it's better to have your child waste $10 when they're 10, than $10,000 when they're 18 and they get their first credit card," says Dean Brauer, co-founder and U.S. president of GoHenry, the prepaid debit card and app for kids.

Turning tween spending into teachable moments

An abstract image illustrating wage inequality.
Credit: Getty Images.

As well as being understanding, an open-minded approach when it comes to kids' interests can help make these tentative first steps towards financial responsibility easier for both tweens and the adults trying to tame their childrens' spending. All too often, parents can be dismissive of tween and teen interests like video games including Minecraft and Roblox, when in fact, these are a crucial source of social connection for kids. As well as tools for financial education, it turns out:

"It's often the first time they're coming into contact with currency and needing to make choices and compulsive spending. We see it all as learning opportunities for kids, and that's why you put the right boundaries and frameworks in place," Brauer says. Tweens and teens typically spend their money 60/40 online vs. offline, with food and gaming two of the top areas of spending.

AFC®️and host of Her Dinero Matters podcast, Jen Hemphill, sees this tween period as ripe for learning about financial matters that kids can use to help them in the long-term, even if their motivations in the short-term are all about instant gratification. "I'm a fan of letting them fall while they're with you to make financial mistakes so you can pick them up and teach them," she explains. 

She advises setting parameters when it comes to giving the kids an allowance, so they understand exactly what they're expected to use their money for (e.g. lunch, clothes), Any leftover money could be put into savings or spent on whatever they like. Except, if your child uses their allowance on something they didn't need, or treats all their friends to lunch, and then doesn't have the money to do something they were meant to, well, that's a lesson learned right there. 

And here's a lesson for parents. We can't control everything that our tweens are spending their money on. Giving them the freedom to experiment a little, with safety measures in place, is exactly what they need, which is one reason prepaid debit cards for kids are becoming increasingly popular (and essential as we move towards a cashless society; three in 10 Americans don't make any cash purchases in a week, according to Pew Research from before the pandemic). 

Prepaid debit cards like GoHenry and Greenlight have parental controls, as well as alerts that indicate what's been spent and where, so parents can track their teen's spending and block the card if kids misplace it (this also happens fairly regularly with this age group). 

Talk to your kids about money from a young age

illustration of mother and son holding hands flying above talk bubbles
Credit: Illustration by Andrea De Santis

Parents are still uncomfortable when it comes to broaching the topic of money with their children. When I think about how I've been addressing it with my own family, I've probably been too emotion-led, rather than pragmatic.

Not only is it important to start having these financially minded conversations, it's something to do sooner rather than later. A 2013 study from the University of Cambridge found that our approach to money habits is already established by age seven.

The more direct you can be, the better. Explain how to budget using visual tools, set goals for the short- and long-term and tell the kids how different items cost different amounts, so they start to understand that saving up for a bigger toy or treat requires planning and patience. Helping kids understand the difference between wanting something (new sneakers) and needing something (socks for schooll) is another crucial lesson in Spending 101. 

"Something like almost 75% of parents are not talking to their kids about money, so a lot of what we're trying to do is engender positive conversations around money and having a framework to have this positive conversation. It's actually parents who have the most influence on changing, adapting, and evolving these attitudes and habits," Brauer explains. 

Money talks are part of larger conversations to have with kids about things like family finances and financial privilege (or difficult periods of financial strain). This can also tie in to bigger conversations about pressure on kids to own certain things, which might come from peers or social media. Teaching kids the difference between what's genuine and what's being foisted on them through clever marketing is another lesson you can't teach too soon.

Encourage them to earn their own money

An image of a dustpan on a colorful background.
Credit: Getty Images.

The question of whether or not to pay kids for chores is one that divides parents. However, the general consensus from experts is that children do benefit from earning their own pocket money, since it teaches them to appreciate the value of a dollar. They can start from a young age, around six or seven years old. Brauer suggests thinking about creative ways for kids to start earning, whether that's helping neighbors with chores, selling old toys, or shoveling the drive in winter.

Once they've started earning, another way to help kids understand and appreciate how money works is to get them investing young—that's what Hemphill did with her two kids.

"They can play with the stock market, penny stocks and all that stuff, just to get their feet wet. Let's say you decide together that some of their birthday money will go to open up a Roth IRA, a custodial one. Being able to visually see growth is powerful," says Hemphill. For those who are financially savvy, setting up a custodial Roth IRA through a brokerage can work, or you can try a robo-advisor.

Resources such as Money as You Grow from the CFPB break down money choices and goals by age, introducing concepts like comparison shopping and planning in advance for purchases. GoHenry is also trying to bring these complex concepts to kids in a gamified way through Money Missions, while Greenlight has in-app investing options from $1.

When my tween came home with a bead bracelet she'd purchased for $3 the other day, I smiled. She explained she'd bought it from her friend, who had started a jewelry business. We had a chat about supporting small businesses and how good that feels… and she told me she wants to come up with her own business idea so she can start earning her own money too.