How to Keep Your Kid's Rich Friends From Ruining Your Budget

By Andrea Cannon on 21 October 2016 2 comments

Every year, your child will make new friends at school or in their social activities. This can be a great thing, but what happens when your child makes a new rich friend? As an adult, it can be difficult to resist the urge to keep up with wealthier friends. For a child, it can be even more difficult to understand and accept. Here's how to keep your child in a frugal mindset.

Show Them That Time is More Valuable Than Money

Spending more time with your child is more important than helping them keep up with their wealthier classmates. Children crave time and love; this is what memories are made of. They won't remember the expensive pair of shoes you bought them or the electronics they had in middle school. They will remember the time you all went camping or how you cooked dinner together every night.

Emphasize Experiences

Enroll your child in sports, summer camps, and free local child activities. They'll make new friends, have unforgettable experiences, and gain new skills. Fun experiences like these will quickly make them forget about what their rich friend has.

Focus On the Important Things

Focus more on what they can have and what makes those things special. Every item they own should feel like it's truly special and meant just for them.

Teach the Value of a Dollar

You can make this awkward moment a great learning experience. Set up an allowance system so your child can earn small amounts of money for completing chores or doing well in school. Depending on their age, you can also suggest that they begin with small jobs like baby-sitting, pet-sitting, or mowing the neighbors' lawns to make a little extra cash. You can also encourage them to start their own savings account and balance a checkbook. This will help them to better appreciate that money goes quickly and it can distract them from feeling inadequate.

By earning their own money, they'll feel like the money is theirs to control. You can let them know that they can buy what they want, as long as they have their own money for it. Not only will they have something to look forward to, but it'll help them better understand the value of a dollar and how hard work can pay off.

Don't Give In

It may seem like the easy answer is to purchase your child something that they've been asking for, but this isn't the right approach. Not only will it throw your budget off, but it will only make your child feel better for a little while. Soon enough, they will want something else to keep up with their friends, and you'll be right back to square one. You can also remind them that their birthday or the holidays are right around the corner and they will be receiving gifts at that time. By the time the holiday rolls around, they probably won't want with they're asking for now anyway.

Ask for Hand-Me-Downs

Ask your friends and family for hand-me-downs from their older children. Your child will never know the difference and can benefit from clothes, shoes, and toys that feel like new.

Create Teachable Moments

You can always teach your child so much more than you can buy them. When your child begins asking financial questions, the key is to teach them how to be grounded and smart about money. Consider explaining to them what you're currently saving for, such as their college education or a family vacation. If they know there's a reason for a budget, they won't feel like they're missing out, but instead, can see the bigger picture.

Most importantly, you need to be honest with your child, and phrase it in a way they'll understand. Explain to them that they'll always have everything they need, and whenever you can, you purchase them things that they want. Providing your child with the best upbringing possible has nothing to do with what you buy them — it's about the experiences and love you give them. Teach your child that the most important things are these familial bonds — not material possessions.

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Guest's picture
Regretting the Big House

Interesting article. Our biggest problem is that my daughter, through no fault of her own, IS the rich kid and her friends and their parents are constantly arranging expensive outings that we have no desire to do. However, they think that because we are in the biggest house, we shouldn't have any problem with a 14 year old spending $20-40 every weekend on socializing. I'm constantly trying to get my daughter to convince her friends to just hang out. I truly feel like the other parents are feeling like they need to keep up with me and I wish they would just cut it out! I give my daughter $10 every two weeks and that's supposed to be all she has to spend on socializing. But just last night I had to fork over $80 because ALL of her friends were going to a haunted amusement park and then having a sleepover. We've avoided some things in the past and just showed up for the sleepover, but this time we were pressured into spending $38 admission, $15 for the haunted house AND money for dinner there. Ugh! It's not always the rich kids!schoo

Guest's picture
DJ

This is easily one of my favorite blog titles of all time. It immediately made me chuckle. Although I'm not a parent, I can definitely understand how this could be a huge problem, especially these days when it seems like new shoes, games and gadgets are release pretty much every day.

I like the idea of teaching kids the value of a dollar. That's what helped me become a lot smarter with my money. The new Yeezy shoes don't seem like such a "must have" when you have to buy them yourself.