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Grow your money

December 01, 2020

An Eight-Year Old’s First Major Personal Finance Experience

See the life lessons a child learned while saving money to buy his own gadget.

Sometime in 2019, my eight-year-old son Sloan learned about the Nintendo Switch Lite and decided he wanted one for himself. He knew that it was an expensive purchase, the kind that he may only ask for on special occasions like birthdays or Christmases – and even then, there was no guarantee.

So he decided he’ll save up for it. He had a basic understanding of the concept after a briefing from his father and me when we started giving him an allowance for school. This was our own simple way of trying to set him off on the right track in terms of handling money.

Fortunately, he is proving to be much better at it than we were at his age, applying principles we didn’t realize he could already grasp.

  • Goalsetting
    During a visit to the toy store, he took note of the gadget’s price. He wrote down his target amount in our blackboard at home. On the column for tasks, it said: Sloan – Save P11,000 for a Switch Lite. It was a huge amount for a kid his age who only receives a small allowance, but he was determined.

  • Forced saving
    Whenever we’d hand him his allowance in the morning, he’d take small portion and put it straight to his money pouch so he won’t be tempted to spend it in school. Some days, he’d even leave the entire amount at home since he has baon.

  • Record-keeping
    One thing I taught him was to write down what he spends each day. It was a chance for us to see what he buys from the cafeteria and also a way for him to practice Math skills. This would also help ensure that he gets the correct change, especially since paying for his own stuff was pretty much a new experience for him.

  • Enjoying the present
    Every now and then, Sloan would find a toy he likes and would end up getting a small amount from his savings to buy it. We wouldn’t stop him from doing this so he would see the value of buying something from his own savings. At the same time, it was also an opportunity for him to understand how spending on little things here and there affects his efforts towards his bigger goal.

  • Making do with what was available
    At one point, Sloan came close to giving up because it seemed like he was making such slow progress towards his goal amount. And then he made a cardboard version of the Nintendo Switch complete moveable parts and a game cartridge. He’d play with it on and on, probably simulating the feeling of having the Switch Lite in his hands. After that, the race to 11k was back on.

Sloan was about halfway his goal amount when the pandemic happened and he had to shift to online classes. Since he no longer received a regular allowance from us in the new set-up and we refuse to give rewards for doing regular household chores, it seemed like the journey was going to be prolonged further.

His father and I decided it was time for us to finally get him the gadget of his dreams. On the morning of his 10th birthday, we surprised him with his very own Nintendo Switch Lite. He couldn’t believe his eyes and thanked us with the biggest hug ever.

I suppose we could’ve stuck with the plan and told him to keep saving. But we felt that the lessons he learned throughout this whole journey were already enough for his first major personal finance experience. His savings are intact, and there will be more opportunities to learn in the future. This, for us, was a good start.

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