2019-2020 was an exercise in teaching our elementary school-aged children personal finance, driving independence, and encouraging them to make constrained resource decisions.
Our three elementary school-aged children have two accounts: one for spending, and one for saving. Half of every dollar they earn goes into the savings account. The remainder is theirs to use, with a few reasonable, parental limitations.
Once the children learned that they have freedom to spend from their spending accounts, the middle one (2nd grade at the time) immediately asked how much a smartphone costs. I told him it can be as low as $300, but that the service fee is $25 per month. Sadly for him, this is one of the off-limits purchases. The children are too young to have phones.
He then switched his eyes toward an iPad, believing that once he owned any of these magnificent personal electronics, he would have free rein over them.
We corrected that belief immediately, making clear to him that even if he bought them, and paid for the ongoing service costs, he was still under the same restrictions on overall screen time and content as with the family-provided options. It took a bit of wind out of his sails.
Finally, in lieu of phones, the kids decided they want Gizmo Watches. A Gizmo is a GPS-enabled kid's smartwatch that can make calls with exactly three pre-programmed phone numbers while offering some other fun bells and whistles.
At full price, Gizmos cost about $180 from Verizon with an additional $5/month service plan. They’re fantastic for younger kids to whom you’re not yet willing to give a phone, but whom you really want to keep tabs on.
The GPS lets the parents know where their kid’s watch is at any given point in time, enabling two-way communication with them. The kids feel super-sophisticated all the while. It lets you send your kid off on his or her own without wondering whether they made it to their destination safely.
The littles see their friends with them and also want one. One concern is that if we buy it for them, they will not appreciate its actual value and will treat it carelessly. As this will be the gateway electronic into pricier and more unrestricted personal devices, we want to set the stage properly.
Instead of a yes or a no, we agreed with the children that they can buy the Gizmo, and we’ll cover the $5 monthly service fee. We also will control which three phone numbers are programmed in.
The oldest (9 1/2) set her sights first on getting one of these Gizmos. She packed her lunch almost religiously, making the occasional exception to buy on French Toast day. Finally, after several months of hoarding her allowance, pet-sitting for neighbors, and protecting her spending account, she had enough money saved up.
Interestingly, she waited a few extra weeks before making her purchase, so she would not be left with an empty account.
Late June arrived and she was ready to buy. With a choice between blue and Mickey Mouse, she chose blue. We hit a sale, where for the 2 year commitment, she could get $50 off. Since I don’t see us leaving Verizon Wireless any time soon due to reception in our neighborhood, I cheerfully agreed. $50 makes a huge difference to a kid, and Baby Girl was ecstatic.
Husband: “Baby Girl! How much money does it cost you to buy it? How much did you save?”
“I tried to get to $200, but I wanted it so much and I already had earned $150, so I asked Mom if she’d go out and buy it.”
Husband: “I heard that Mommy may have found it on sale.”
“Yay!!!!”
We expected that once the oldest had her device, the middle child would be motivated to save up for his. Interestingly, it wasn’t him but the littlest one (6 yrs old) who wanted the next Gizmo. She had the advantage of summertime, where there were no lunch purchases to deplete her account. Once she had accumulated enough in her spending account, she chose a pink Gizmo, also at the discounted rate.
Wee One bought her device in September in time for back to school. Of the two of them, the youngest most enthusiastically wears and uses her watch. She regularly calls and texts her three people, and most reliably puts it on in the morning.
Bottom line - both girls set their eyes on a large purchase. They saved up, making sacrifices along the way, and they each bought their desired device. There is some buyer's remorse because the device isn't all that ... but it reinforces the importance of doing your research before making your purchase. Baby Girl is disappointed in its limited functionality, and more often than not forgets to charge or wear it. She has tried to sell it to her siblings, but to date is asking full price. She will need to learn that used items are not nearly as valuable as new, and that depreciation is real. However, it has bought her the freedom to bike around our fairly spread-out neighborhood on her own, which in and of itself is valuable to her.
Stephanie Brooke Lennon is the author of Family Bank Blueprint, GoldQuest, and What Would Water Do? Simple Strategies for Navigating Life's Obstacles. Her titles are available in Paperback and Kindle on Amazon.com. Follow Stephanie Brooke on Facebook, Instagram, TikTok, YouTube, Twitter, Amazon, and at BrookeLennon.com.