To Spend or Not to Spend

by Andrew Sivertsen, CFP® CeFT®

To Spend or Not to Spend

To spend or not to spend, that is the question?

“Dad! Dad! Dad! Can I buy this?” Like many parents, this is a question I hear quite often having a 9, 6, and 4-year-old in the house. The other day my oldest had found a new Harry Potter Lego set in the back of one of the instruction manuals and quickly shouted this question yet again. She has money from birthdays and allowances that she has been saving, but upon reminding her of this she knew she was saving up to buy a camper van to go with her dolls. I could see the internal struggle of instant gratification versus the long wait for her goal. To spend or not to spend?

The Opposite of Spoiled

To try and teach our kids how to answer this question we have leaned heavily on principles from Ron Lieber’s book The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money. He talks about giving your kids a weekly allowance and dividing it into three jars: give, save, and spend. Fifty cents to a dollar per age of your child is a good starting point for a weekly allowance. We found jars and physical money too difficult to administer and found an app called Rooster Money to use instead. Each week they get to see the balance in their “jars” grow. This creates an opportunity to have conversations with our kids about their needs versus wants and ultimately decide how they want to use the money within the confines of the designated purpose give, save, and spend.

The Joy of Sharing

As humans we survive by relying greatly on others. By having a ‘give jar’, our kids are discovering the virtue of helping and bringing joys to others. It shows that our own personal joy comes from more than just satisfying our own needs and wants. With money ear-marked to think about others, hopefully, they will grow to become individuals who are more generous and less materialistic.

Living in the Moment

Spending is not a four-letter word and we should not feel guilty for wanting things for ourselves. The ‘spend jar’ teaches us that life is precious, and we need to know how to live in the moment. There are daily joys from being able to buy the small things that entertain us. For kids that might be candy, ice cream, and trinkets. Over time these desires and joys will change for each of them as they grow into adults. Having a jar limits the act of over-spending on instant gratification, but also gives the freedom to choose to spend the money to create these daily joys.

Worth the Wait

Delayed gratification is a much harder value to teach. The ‘save jar’ teaches patience and discipline. It identifies goals that are so important to us that they are worth the wait. Often our kids find that the thing they thought they wanted months ago no longer seems important and their goals change over time. If their goal changes, we make them wait two weeks before they can spend their save money on this new desire. This allows the time to separate the instant gratification on a big purchase to make sure that it is something that truly is important to us.

The Dilemma for All Adults

As adults we face this same dilemma daily. Money is a finite resource and therefore spending and saving work directly against each other. We must learn to make choices on what is most important to us. There is part of us that wants to spend money and part of us that wants to save. As financial planners one of our jobs is to help identify values, goals, and beliefs for our clients. This helps create the decision-making framework for not only how much we need to save for our short, intermediate, and long-term goals, but why we want to save for them. By adding a system like First Step Cash Management to implement this framework we can confidently know that not only are we saving for our most important goals, but we can spend the remainder guilt free on whatever needs and wants come up week to week. Ask your TPC planner if you are interested in learning more about this system. Even if you do not have or are not expecting kids/grandkids, I would encourage you to pick up Ron Lieber’s book. Maybe it will help you answer the question: To spend or not to spend?

Andrew Sivertsen, CFP®, is a Sr. Financial Planner in the Quad Cities office of The Planning Center, a fee-only financial planning and wealth management firm. Email him at: