The reader asked: “How would you respond to the parenting column about a mom’s conflicted feelings about allowing her daughter to splurge on an American Girl luxury with her birthday money?”
In the essay, “Forget the American Girl store. Just give us a Sprite,” William writes about the money that her daughter spent on her doll.
“My daughter, 6, spent more money on a hairstyle for her doll last weekend than I spend on a shampoo, cut and dry for her at the local salon,” she wrote. “It was hard to watch, but also really sweet to see her carefully open up her pink plastic princess wallet and count out her birthday money at the cash register for something that she really wanted . . . I had made a deal with her: I would pick up the cost of lunch, but any shopping she wanted to do had to come out of part of her birthday money.”
I thought the article by Williams was right on the money. We have to allow our children to spend their money so they understand what it feels like to let it go -- even on things we think are frivolous.
Now, there are times I will step in and stop my kid from spending his or her own money. My daughter Jillian loves Twix candy bars. She would eat them for breakfast, lunch and dinner. So I say no – often – when she begs to buy the candy by mockingly saying, “It’s my money.”
Other times I cringe but let her spend on something I wouldn’t. Still, as you might expect, my kids are pretty frugal because they have spent years listening to me and watching me talk about the importance of being a good money manager. Children can learn to imitate what they hear and see.
2013 Tax Season
If you’re thinking about proposing on Valentine’s Day, or at all, the Tax Policy Center has a calculator to help you see if saying “I do” will result in a higher or lower tax bill.
As the Tax Policy Center explains, “A couple suffers a ‘marriage penalty’ if its partners pay more income tax as a married couple than they would have as two single individuals. Conversely, the couple receives a ‘marriage bonus’ if its partners pay less income tax as a married couple than they would have as two single individuals.’
The center’s calculator lets you see what situations receive tax penalties or bonuses from marriage.
Roberton Williams, a contributor to Forbes.com, explains in a recent article three tax provisions that will increase marriage penalties a lot in 2013 for many high-income couples. First on his list is the new tax rate created by the American Taxpayer Relief Act passed by Congress at the beginning of the year.
The law created a new 39.6 percent top tax bracket, which starts at $400,000 for single filers and $450,000 for couples filing jointly, Miller reports.
So “consider two people, each with $400,000 of taxable income,” he writes. “Unmarried, neither would hit the 39.6 percent rate. Married, they would pay the top rate on $350,000.
Family Financial Fights