Dave Says: Can a Child be Too Frugal?

Dear Dave,
We’ve followed your advice and put our kids on commissions instead of allowances. Now, they know they have to earn things instead of having it handed to them. The problem is our 10-year-old daughter. She is EXTREMELY frugal and never buys anything. We want her to understand its okay to spend money if you do it wisely. Any advice?
-- Susan

Dear Susan,
Well, it’s not the worst problem to have – especially at that age. But you’re right for wanting to teach her wise spending habits.  

Each of us has the personality of being either a spender or a saver. As parents, it’s our job to help accentuate our kids’ strengths and help them stretch and grow in areas where they have weaknesses.

Praise her for being so good at saving, but encourage her to spend a little, too. Spending is one of the rewards of disciplined saving and working. You might let her pick something she really wants and help her make plans to save enough money to buy the item. Once she has enough money, then it becomes a celebration of a goal reached.

There are three good things you do with money – you can spend it and have a little fun, you can save it and build up security and you can give it away to help others. Focusing too much or too little on any of these is not healthy.
-- Dave