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Should I cut my daughter’s allowance or let her keep on spending?
So, let me tell you the story of a frustrated father. Let’s say the father is serious about raising his daughter to be manage her money well. So, he gives her a monthly allowance and suggests to her the best way to spend it. The instructions he gives her are clear.
“The money I give you is for school expenses,” I said. Umm… the father said. “And for school clothes and food for your pet’s food and so on.”
The father, realizing how his daughter is, expected her to overspend her budget and she did.
“I spent more than I should have,” she told me. Umm… told her father, “Can you give me a little more?”
The father sighs and gives her more money and for a while she is fine but then, she overspends. Again. With hands out and puppy dog eyes, she asks for more money explaining that if I did not give it to her, her pet fish, pet Iguana and dog would suffer incredibly. I give into the emotional appeal. Or rather, her father gives in to the emotional appeal, and gives her even more of his hard-earned money.
Over time, the pattern repeats itself and I get irate at her lack of discipline. Instead of spending money on what she budgeted (yes, I required her to write a budget) she started buying things at the mall and subsidizing her friends because she wanted to be popular. I cautioned her that if she did not get a handle on things that I would cut her off and she would have to (gasp) get a job and earn extra money herself. Rather than do anything so drastic, my daughter, I mean the girl in the story, decided to get a credit card.
It was not until Amazon started delivering packages everyday for a week that I caught on to how much debt she got herself into. At that point, I told her I was cutting her off and cutting up her credit cards. She told me I was being unreasonable. She argued that I made plenty of money to support her spending habits and in fact, there should be no limits on the money I give her. Why? Although she regularly overspends her allowance, there were some critical needs (makeup, clothes and pet food) that were “essential” and my cutting her off meant that there would be unnecessary suffering.
Sigh. If nothing else, my daughter, the girl in this story… (Ah, forget it!) My daughter is resourceful and likes to argue her case with passion and emotional appeals that are often devoid of logic. Regardless, no matter how rich she thinks I am, I cannot keep spending money on her without restraint. Supporting her as I have been is now causing me to borrow money to keep the rest of the house afloat. So, what should I do? As I see it, I have two choices:
a. Cut off her spending and deny any new funds until she is out of debt. This may mean that she has to cut expenses, sell some of her stuff and/or do something creative (get a job for example). However, no more money from the bank of Dad; at least, not for the foreseeable future.
b. I give in to her pleas, give her more money (again) and try (again) to mentor her spending habits. My long-term hope being that she learns to be fiscally responsible instead of just spend, spend, spend and worry about her ever-growing debt later.
How should I choose?
Before you answer, consider a major issue being debated in Washington right now – raising the debt limit. On September 23, 2021, AP News reported this.
“The House voted late Tuesday to keep the government funded, suspend the federal debt limit and provide disaster and refugee aid, setting up a high-stakes showdown with Republicans who oppose the package… The federal government faces a shutdown if funding stops on Sept. 30, the end of the fiscal year.”
In a nutshell, Democrats want to raise the debt ceiling, pay the bills, buy some extra stuff and worry about the debt later; eventhough there is already a lot of debt to be paid. The Democrats have the majority in Congress and control the White House so they can do it without Republicans. So, why not just do it and get it over with?
If Democrats increase the debt and buy all the extra stuff they want without Republicans sharing some of the blame, any negative political consequences will fall on Democrats alone and an election season is coming (very) soon.
Consider this quote from Rasmussen Reports which puts the situation in an even clearer context, as far as Republicans are concerned [August 11, 2021].
Under the Biden-Pelosi-Schumer plan, the national debt, which now stands at near $30 trillion and well above the warning sign of 100% of our GDP, would soar to close to $50 trillion in 10 years. A new study by FreedomWorks shows that the debt under the Democratic plan could rise to 200% of GDP over the next decade — almost twice as high as any previous time in our nation’s history.
This debt explosion will happen even though Democrats are also planning one of the largest tax increases in American history.
Further down the article it reads…
Doesn’t it seem self-evident that the people who are putting our credit at risk and shoving us on to the precipice of a financial collapse are the ones who actually approved all of this debt spending? They run up the credit card and blame the credit card company for not giving them a higher credit limit. Amazing.
On the other side of the aisle, Democrats see it as hypocritical that Republicans will not sign on to the debt limit. To quote The Washington Post…
If Republicans don’t budge, they would leave the U.S. economy hanging by a thread, potentially forcing Democrats to raise the ceiling by rewriting and passing a massive (and filibuster-immune) budget reconciliation package in a matter of days. It’s the legislative equivalent of passing a camel through the eye of a needle.
As The Post’s venerable congressional correspondent Paul Kane notes, Republicans have entirely invented this new standard that Democrats alone are responsible for increasing the limit: “Almost every time the debt ceiling has been lifted, it has been done in bipartisan fashion under the regular Senate order that requires at least 60 votes to end debate on the legislation.”
The hypocrisy is stunning. McConnell has voted to increase or suspend the debt limit 32 times, including thrice under Trump, who added $7.8 trillion to the debt, The Post’s Jeff Stein reported. About 97 percent of the current debt existed before Joe Biden’s presidency; McConnell and his GOP colleagues are refusing to finance the debt they already incurred because they object to other spending that has merely been proposed.
That was in August, a few more proposed items have come to light since then. Items like:
- $3 Billion on “Tree Equity“
- $15 Million Resource Centers for Seniors with Gender Identity Issues
- Free Community College for Illegal Immigrants
Republicans view things like that as excessive spending and not a priority, to say the least. Democrats, President Biden specifically, thinks that there is no cause for alarm and that the 5.5 trillion dollar spending he is proposing on those and similar items will ultimately pay for itself. No problem.
Forgive me, I have become severely distracted with all this. If you would, please let me know what to do concerning my daughter’s spending? Should I give her more money, let her continue to drown in debt and worry about it later? Or, should I stand firm and say “no” your spending is out of control. Cut costs, sell some of your stuff, be creative, but no more money from me until your fiscal house is in order.
I need your advice. Tell me what to do.