What to do if my kid bought something expensive: A parent’s money guide

Uh-oh. Your child made an overly expensive purchase with a linked debit or credit card that they probably shouldn’t have. Now what?

First thing’s first: don’t panic. A minor’s purchase is often reversible. Contact the merchant and explain what happened. If that doesn’t work, contact your credit card provider — you can probably dispute the charge under the Fair Credit Billing Act (FCBA), which requires creditors to investigate charges made in error. 

Once you’ve recovered your money, you can turn this into a teaching moment. This is a great opportunity to talk to your child about impulse buying and smart money management. Here are some tips for parents to move forward after their child makes an unexpected purchase.

Why a teaching moment matters more than a punishment

You may be a little upset after your child buys something expensive, and that’s understandable. But let’s step back and examine why this might have happened. 

Kids today are surrounded by influence. According to one recent survey, over 70% of parents with Gen Alpha kids report that their child asks to buy something online at least once a week. Social media can encourage childhood materialism. And with linked credit and debit cards and in-app purchases, it’s all too easy for kids to make impulsive purchases without asking. 

So, when your child buys something without your permission, consider it an opportunity to explain why they should save money and make smart purchases. This is a great time to:

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• Validate your child’s feelings — understand that they may feel like they need that purchase to fit in.

• Discuss the difference between needs and wants.

• Ask them why the product was so important to them and suggest more affordable alternatives.

• Offer a pathway to help them save for their own purchases in the future.

Exploring practical solutions together

When your child spends too much money, exploring solutions together can help them understand their mistakes and make better choices in the future. Here are a few potential solutions you can discuss with your kid:

Return or exchange the item

Discuss the value of the purchase and ask your child to explore alternative, more practical ways to spend that money. Then exchange the item for something that provides more value. 

Resell the item

If you can’t return or exchange the purchase, ask your child to help you resell it. This will teach them about depreciating value. 

Share the cost

If your child has an allowance or savings account, consider splitting the cost of the purchase.

Work to repay

You could stop giving allowance as a form of discipline — or you could teach your child smart money management by having them work to repay the purchase. Greenlight’s chore-to-earn feature allows you to connect payouts to chores. They can track their progress and see how much they’re earning through the Greenlight app.

A step-by-step action plan for parents

Not sure where to start after your child buys something? Here’s a detailed roadmap for parents to stay calm, explain why they can’t make the purchase, and come up with a solution.

1. Step away: Take a moment to breathe, contact your credit card provider, and work through your frustration before you react in front of your child. 

2. Talk it over: Sit down with your child and talk about what happened. Ask why they made the purchase and try to empathize with them. It may have been an accident. 

3. Review the purchase together: Show them how much the purchase costs. Provide examples of other things that cost the same amount, and explain how every spending decision impacts your family finances. 

4. Choose an outcome: Discuss practical solutions with your child: keep the item, return it, repay it, and similar. This is a good time to bring up potential consequences, such as limiting screen time or assigning chores. 

5. Take steps to prevent future mishaps: If this was an accidental purchase, you can stop it from happening again by installing parental controls. Another solution: check out Greenlight, the #1 family finance and safety app that’s an all-in-one tool for SOS alerts,* fraud detection,** purchase protection,*** and more.

Building better habits for the future

As your child grows up, you can help them make smarter financial decisions by teaching them the importance of financial literacy. This starts with the rules and routines you establish at home. 

Try these strategies to continue their financial education and make sure the same mistake doesn’t happen again:

• Set clear boundaries for online spending.

• Apply a “24-hour rule” to encourage them to think for a whole day before making a large purchase.

• Allow natural consequences to help them learn. For example, if they overspend on their allowance, the overdrawn amount should come out of their next payment. 

• Use digital resources like Greenlight’s savings goals to help them visually track their finances.

A real-world example of lessons learned

Here’s an example of how an irresponsible purchase can turn into a lesson in financial literacy.

Max is 13 years old and has logged into his parents’ Amazon account to buy the latest gaming console, without considering the cost. His parents offered him two options: they could return the console, or he could work to repay them for it. Max chose to repay them.

Using Greenlight’s chore-to-earn tool, Max earned allowance for his chores and tracked his progress in the Greenlight app. Earning his own money helped him realize the true cost of the console. After repaying his parents, he chose to keep working for his allowance and continued saving up for future purchases.

How to prevent overspending with smart tools

Mistakes happen. But with the right attitude and smart money-saving tools, you can turn your kids' spending mistakes into valuable life lessons. 

Take this opportunity to talk to your child about the importance of smart money habits and create proactive solutions together. Use Greenlight’s kid-friendly money management tools to show them how to save, and prevent overspending in the future.

Finally, remember to keep the conversation going. Talking to your kids about money is the best way to set them up for a better financial future. 

Make saving fun for kids. Customize allowances, set savings goals, and learn to invest with Greenlight’s award-winning app. Try Greenlight, one month, risk-free.† 

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