Updated on 03.01.10

When Parental Money Lessons Backfire

Trent Hamm

As I’ve mentioned before, we give our children a small allowance each week. Our daughter, who is only two, puts all of her money into a single-slot piggy bank and is allowed to fully spend it as she chooses. Our son gets more money for his allowance (for now), but has a Money Savvy Pig, where he splits his allowance into four equal parts: money to freely spend, money to save for an item he wants, money for an annual charitable gift, and money for investing for the long term.

The idea here, though, is that each of them has a few quarters to spend each week on whatever they would like. Most of the time, they spend it on reasonable kid things – they both have a strong affection for M&Ms, for example, and often buy M&Ms with their quarters.

This week, however, was different. We were dining at a restaurant that had one of those carnival-esque “claw” machines near the exit, where you use a stick to maneuver a claw around, then hit a button to have the claw drop into a pit of stuffed animals or other toys. Almost always, the claw is unable to pick any of the items up, so you simply lose the money you put in there.

We’ve warned our kids about these machines in the past. “If you put your money in there, you’ll just lose it and not get anything for it.” “Those machines are rip-offs.”

However, we are also committed to letting our children make their own choices about their free-spending money. Thus, as we were leaving with our children, they asked if they could use their spending money in the claw machine. After a quick warning about the nature of the machine, we allowed them to, assuming it would teach them a quick, simple lesson about disappointment and how things like this actually work.

Of course, my two year old daughter won a stuffed animal on her first try.

Of course, my four year old son won a stuffed animal on his second try.

Obviously, the lesson learned from this situation is the opposite of what we hoped they would take from it. My son, in fact, has already told us that this is now his favorite restaurant and he can’t wait to go back to get another stuffed animal, implying (of course) that it’s trivial to get a stuffed animal from such a machine.

Where do we go from here? My wife and I talked about it and came up with the following conclusions that we feel are in line with the money lessons we want to teach our kids.

If they wish to try again with their “free spending” money, we won’t stop them. How you choose to spend money – and what you get out of it – is a constant lesson in itself. Putting restrictions on the portion of their allowance that they’re allowed to spend freely (at least at this point) defeats the learning (even if sometimes the learning isn’t perfect).

We’ll still advise them of potential poor spending choices. Of course, just because they’re allowed to freely spend doesn’t mean we don’t offer suggestions to them about what’s a good spending choice and what’s a bad spending choice. We try to avoid drawing conclusions, but we do try to provide information. We focus on saying things like, “If you put your money in this machine and it doesn’t win a toy, that money is simply gone – you’ll get nothing for it.”

We won’t “avoid” such machines in the future. One topic was whether or not we should actively strive to avoid “claw” machines for a while until they forget that they won. Of course, doing so simply delays the inevitable lesson that they’ll have to learn from such machines, so we decided not to avoid such machines.

We will never recompensate them for their lost money in such machines. When they try again and inevitably lose, we will allow them to feel the sting of disappointment and not undo that sting by reimbursing their money, as we’ve observed other parents do in the past. They have the freedom to spend their money as they choose, and they also have the freedom to lose it and to grow from the lessons they learn.

Still, I have to say I was honestly amazed when my two year old daughter moved the claw around jerkily for a few seconds, smashed the button, and was rewarded with a cute little stuffed animal. I honestly believe I could have played the machine for an hour and not won a single thing.

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  1. matt says:

    Those machines are not total rip-offs, some people play them for a hobby. My grandmother for instance (she is a bit of a gambling addict) Plays them when she cant go to bingo, and donates all the toys she wins to charity. She has gotten to the point that in 2-3 tries she can get anything she wants from the machine, there is some skill involved, and some people are very good at them.

  2. Josh says:

    It’s too bad they won so easily on their first attempt(s). The first impression always makes a much longer and lasting impressions and can be very hard to undo. Unfortunately, they will need to lose lots of quarters before they start to realize it might not be as easy as they think it is now.

    Just like most people who become gambling addicts were winners on their first trip to the casino.

  3. Nick says:

    I don’t care if it takes me all night! I’m gonna get me that lobster harmonica!

  4. J says:

    Sounds like Lady Luck was with you and you should have bought a lottery ticket on the way home.

  5. Sandy E. says:

    This was one of the funniest things I’ve read in a long time – thanks for the great laugh!

    You know I always discourage my 5 yr. old grandson from using those machines. Maybe it’s because I lost money in them years ago. Maybe I should go ahead and let him give it a try?

    And bless your little 2 year old’s heart! I’m so happy for her.

  6. Steve says:

    Good luck teaching them about probability. Most adults don’t even understand it (and those of us that do, only apply it when we think about it consciously – unconsciously we screw it up as much as the next person.)

  7. Maureen says:

    Perhaps you could limit the number of tries they have with the claw each visit. 3 tries and you’re out, like baseball.

  8. Jon says:

    Some of those machines are not “calibrated” correctly. I was with a group one time and I think we collectively walked away with 18 out of 20 successful attempts. Of course, even if you get something every time, I’m sure the owner of the machine is still making some sort of profit (just like carnival games)

  9. Johanna says:

    What jumps out at me is that your son just won a stuffed animal, and already he’s thinking about how much he wants another.

    Maybe it’s normal for kids that age to think that way, but if you’re going to teach them lessons about gambling, maybe you could also try to teach them something about enjoying the stuff they already have, and not just the thrill of getting new stuff.

  10. BirdDog says:

    I’m a little confused. Trent typically only speaks of spending his dining out dollars on fine dining experiences. I wouldn’t think a place with a “claw machine” in the back would be one of those. Nothing against the restaurant, I enjoyed a lot of tasty meals at a truck stop that had those machines. I’m just a little surprised is all.

  11. DiscoApu says:

    I doubt the stuffed animal has any value to Trent’s son, maybe a trophy. It was the thrill of winning that he wants to spend his quarter on. The thrill of winning was more amped by his parents telling him that he would lose. So if its a machine that provides a high winning percentage, let him spend his money and become bored with winning. If this happened to be a “lucky” visit, then let him loose his money. Either way, that lesson you were striving for will have been taught, just in a few more steps then you had hoped.

  12. Adam says:

    Heehee @ BirdDog…good catch. I’m sure Trent isn’t eating out at those claw machine restaurants all the time though, probably just a one-off.

    I would like to hear how your dieting/weight loss resolution is going now that we’re entering the 3rd month of 2010, Trent! I’m down about 5lbs by cutting out sugar (well, fructose specifically). It was hard giving up my muffin in the morning but it has given great results.

  13. Rocky says:

    Let me relate a little story to you all on why I don’t gamble.

    I was at a local resturant where I live with some buddies of mine. We usually would put a couple of dollars into the machines. (They cost a buck to play) when ever we left. Just for the heck of it. Most of the time we got something small and useless but we enjoyed trying for it anyways.

    This one night we were out and I dropped a dollar or two in and almost won. This stupid stuffed toy haning precariously on the side of the container but would not fall. So in my infinite wisdom I figured I would drop another one on top of it figuring that the weight should knock the first one down and get a second with it. Me and my other buddy dropped a 50 bucks between the two of us and I was considering not letting using my credit card to get more money so I could get my stupid toy. We dropped a few other items on it and it would not fall. I sucombed to the logical falacy. Well I have put so much money in there now I have to keep going to get my “investment” out of it. Boy oh boy.

    But on the positive side. I did eventually get the stupid toy. It was a Harley Pig for those that are interested. I also reaffirmed my commitment to not gamble either. Because I could easily see how I could lose a ton of cash that way.



  14. jgonzales says:

    I’m guessing Trent went to a more family friendly restauarant, like IHOP or Denny’s. While truckers do stop there, they usually are geared to the family set (who will spend money in claw machines to pacify the kids). I know our local Denny’s has one and it’s no where near a truck route!

  15. Noadi says:

    Yep, I’m assuming family friendly restaurant too. You don’t bring young children to fine dining restaurants. If it’s like some I’ve been to there was probably a little arcade/play areas where the claw machine was located. It may even be deliberated calibrated for easy wins to keep kids happy.

  16. Technophile says:

    I like your approach because it’s close to the approach my friend’s parents used on her and her sisters. They didn’t deny them alcohol when they were kids, they only let them try a little bit. This led to them NOT going and becoming alcholics or people who just drink for the fun of it every weekend. They’re all responsible adults and while they do drink, they drink in moderation. I have seen some families who deny alcohol even exists and don’t let their kids near it, and then the kids grow up and are exposed to it (the “inevitable”). Then what happens from there can vary from not bad to pretty bad. In my case, it wasn’t bad… I never drank before 21 and I hardly drink now… not even every weekend, maybe every other or few weekends and it’s only one or two drinks.

    I think part of it is the upbringing perhaps, since I never understood the need or “fun” of getting drunk and don’t intend to.

  17. Moby Homemaker says:

    My 8 year old saw one of those while we were at the bowling alley last week. (It looked like a scene out of “Uncle Buck”).
    I advised my son that the claw machine was a rip off. So, he demanded that he play the “Deal Or No Deal” video game iwth his money….again, I suggested that this was a poor choice for spending his dough.
    He insisted and I eventually relented.

    5 minutes later he returned with a $20 gift certifcate. Apparently, he won the $2 Million case–and with it, a $20 gift certificate for the bowling alley.

    No lesson learned. In fact, I used $3 of it to get an on-special beer. Apparently, there is no “financial learning” at the bowling alley…..

  18. Sandy says:

    This is no different really than when the carnival comes to town and someone spends $$ on the arcade. We went to Chuckie Cheese’s a few times, and I swear, it has to be owned by the casinos…just letting kids practice gambling until they are old enough to go to casinos.
    The real lesson will come when they ask for $$ that they didn’t bring with them to play the machines. When my kids pulled that on me, I said that if they forgot their own money, they couldn’t play. I don’t do loans for those things, much to my kids’ chagrin.

  19. Rachel says:

    Trent, it never really changes. My two oldest kids are 28 and 25. They both rent, and despite my frequent advice that they can own for the same amount of money, they still won’t do this. My daughter says “what if I find things i don’t like, the set up of the kitchen, the neighborhood, the schools, etc…”. i try telling her you can stand it for a year or two and sell. I know its not as easy in the present day market, but it really would make me sick to pay in rent what I could be investing in a home. So, they don’t listen to mom and dad.

  20. Austin says:

    I understand what you are trying to get at, but they are not complete ripoffs. When I was younger my little brother had a real knack for winning stuffed animals in those things. I know he has gotten his money worth.

  21. John S says:

    Great article. Hah. Man, when I was a kid in the 80s, I was such a skinflint, I never wanted to gamble with the Claw. No way! Not on my dollar-a-week allowance. I was saving up for a transformer!

    Don’t worry Trent, there are still plenty of hard knocks out there to teach your children. It would be disingenuous to tell them that the claw game is a waste of money and can not be won. You did fine simply conveying that the odds were poor, and letting nature take its course.

    I get where you’re coming from, hoping they would fail. However, I would encourage you to just be happy for your children, when they beat the odds and get lucky once in a while. How often could it really happen, after all? Soon enough, the Universe will correct itself and they will experience loss. In fact, rather than avoid the Claw machines, maybe you should make it a point to go back soon, to accelerate the lesson.

    Great comments from all. “Lobster harmonica!” ROFL!

  22. Poultry in Motion says:

    Heh! Great story, thanks for sharing. While I don’t have kids, the follow-up comments on this are equally funny to me :)

    I’ve always had these “pie in the sky” ideas about teaching my future-kids lessons. From what I’ve read here, my best laid plans appear to be 50/50 at best! Ha!

  23. Jen says:

    Ah, claw machines…the reason I decided, at age 12, that I probably should not ever take up gambling.

  24. almost there says:

    My father tried to teach me a lesson with a nickle in the 60s by way of one armed bandit. He wanted to show me that it was a waste and ended up hitting a winning combination and about 40 nickles. I was convinced that they were magic money machines then.

  25. triLcat says:

    Ah… murphy’s law at work again…
    but seriously, go the other way entirely. Ask your son if he really wants these stuffed toy animals, how much he would spend on one in a store, what he plans to do with it, etc…
    I got good at those machines at one point, had a boyfriend who was into them. We built up quite a collection… and then what…?

    I have an acquaintance who literally has HUNDREDS of stuffed toy animals from those machines. They don’t display them, don’t play with them, nothing… just keep them in a plastic bag in their crawlspace. It’s kind of creepy.

    Then again, I have a good 30 bigger stuffed toy animals from my childhood, each one with a story about where I got it, who gave it to me, why I named it that way, etc… but my kids play with them all the time. It makes me really happy to see my daughter hugging my old monkey, cat, koala. And her favorite doll is the one my mom got for me when I was 6. :)

  26. Des says:

    @ triLcat

    Ha ha! We ARE those weirdos with garbage bags of those toys. When I was a kid, my dad has a gambling itch and used to play those machines to satisfy it (not great, but wayyy cheaper than the casinos). That was back when it only cost 25 cents to play, and the toys were smaller. We had HUNDREDS of those little toys, and played with them all. I have so many memories of them, I don’t want to get rid of them. But until I have kids of my own to give them to, they’re just in bags in my garage. I always mean to go through and just keep my faves, but it is at the bottom of the to do list…

  27. Kathleen says:

    Well done with the kiddos. They’ll learn soon enough.

  28. That’s a really funny story. I think your conclusions are good since they will probably learn the lesson eventually except that they may enjoy the gamble and become addicted to that.

  29. Kerry D says:

    I enjoyed the entire discussion–post and comments alike. So did my 15 year old daughter. We were laughing and laughing.

  30. cathleen says:

    As the daughter of two “youngests”, my father was youngest of eight kids, mother of seven kids, I can honestly tell you that parenting and genes are only a (small?) part of a very complex puzzle about what goes into the forming of an individual! :)
    Every one of them is different, some amazingly so. As though they are from different families.
    Bit of a crap shoot :)

  31. As a parent, one of the most difficult things to do is lat your children fail. But they will never fully learn unless they do.

    My son saw a commercial for a buzz lightyear that appeared to fly and wanted it so badly. I tried to tell him about how advertising was often better than reality but he wouldn’t listen. Eventually I allowed him to buy the buzz but only with his own money. I wanted him to experience the disappointment. It made me want to cry when I saw how hurt he was that his buzz simply fell to the floor. But ever since he has been a smart shopper with his money and takes the time to really question the validity of what he sees on TV.

    More power to you Trent! You are doing the right thing.

  32. Brittany says:

    @19 Rachel– That’s just dumb. It makes NO sense to buy a house you’re only planning on staying in for a year. In fact, rarely does it make sense to buy a house if you aren’t staying for more than five. Please don’t begrudge your kids for being smart enough to realize you’re giving them really, really bad financial advice.

    Great article, Trent.

  33. JB says:

    HAHA isn’t that what always happens? Trying to make an example and it’s the one time things go differently. Sounds like you and your wife have a sound strategy for future visits.Thanks for sharing!

  34. Yeah,

    I think there is some skill involved with those machines.

    Who knows maybe it will help them develop hand-eye coordination skills.

  35. Adam says:

    @19 Rachel, I agree with Brittany. I guess you’ve been living in a vaccuum for the last 3 years, but real estate isn’t always better than renting, especially for people who move often and aren’t ready to settle down yet!! Stop giving your children bad advice.

  36. triLcat says:

    @Rachel – taking a mortgage means that you’re giving the bank interest. Frequently you pay more in interest than you would pay in rent, meaning that you’re not even building equity with that money.

    If, otoh, you put cash into investments, you can build up that money, and eventually take less mortgage, pay less interest. Particularly if you’re talking about a place where you don’t intend to stay for several years, the idea that renting is throwing away money is simply not true.

    Plus, if the whole plumbing system of the house (for example) goes out, the OWNER is responsible, not the renter. I’ve been renting for the past 7 years (2 diff places, got married in there) and simply put, our financial situation is LOADS better than it would be if we had a mortgage on our heads.

    We have more than 1/2 the price of a reasonable place in cash right now, but will have a substantial chunk more in about 2 years, so we’re still waiting rather than throw money into the interest-pit of a mortgage.

    And another thing – when my son was born with a problem, we knew that we had cash available for specialists and such without taking a home equity loan that would mean paying more interest.

    Fortunately, his care has been relatively inexpensive – most of it is covered, and fortunately he’s doing great, but it was good to know we had cash available.

  37. Jon says:

    In the midst of this story, I found another gem, entirely. You said that your son has his money in “four equal parts: money to freely spend, money to save for an item he wants, money for an annual charitable gift, and money for investing for the long term.” Sometimes, we catch some flack, or give ourselves a hard time, about money in the “freely spend” category, about the choices we make with that money. As long as the other categories (plus expenses, for us adults) are taken care of, we should be able to blow our “freely spend” money without guilt on anything that isn’t damaging us or others in some way, right? I need to work on this attitude in my life – sometimes I get way too worried about how I spend my fun money.

  38. Tina says:

    @Rachel – Another voice chiming in to say: Stop giving your kids terrible advice and then whining when they don’t follow it. Wow.

  39. Catherine says:

    Sometimes the value is not just the item received, but the fun in playing the game. I have a friend who will play every crane game that he sees to try and “beat” it. His car is full of stuffed animals as his “trophies”. Once he beats a machine, he doesn’t play it again. I personally don’t see it as a fun thing for me, but to him it is a challenging hobby. I will say I have probably spent more on craft supplies I will never get around to using than he has spent on his crane-game-hobby. To each their own.

  40. Kiran says:

    My father used to be really good at those machines. I had dozens of stuffed animals, a few of which I really liked. He gets a bit of a gambling fix and for 50 cents (two tries back then) and I get a stuffed toy.

    Also this comment thread is great.

  41. Lily says:

    Agree with Jon #37. No guilt should be put on blowing “fun” money. If you’re gonna be guilty about it, why call it “fun” money? I’m on my way to spend $20 on bingo – and you can bet I won’t be feeling a bit guilty whether I win or lose – it’s being with my friend and enjoying a free cocktail. It’s called entertainment and it doesn’t have to do anything but make me feel good for the moment. As long as I’m not dipping into my “non-fun” $, then I will not be guilty!

  42. Amy says:

    I really enjoyed this article and all the comments. Thanks Trent!

  43. Brad says:

    The sting of failure is a lesson kids these days do not learn and I am glad you are teaching it. When I made bets with my dad, I had to pay him. Later in life I learned he just bought something for me with any of that money without me knowing what (extra video game for christmas or something) but I am finding parents these days refuse to disappoint kids.

  44. Ryan says:

    Great article!

    I win stuffed animals from those machines every once in a while. I obviously don’t play for the animal, but for the “excitement”. And when friends say “I bet you won’t win one….” Well…then, it’s game on!

  45. AJ says:

    Moby (#17): Depending on how the machine is set where you leave, Deal or No Deal machines can actually be VERY expoitable.

    The ones in the town where I live show you what is in each case as soon as you put your money in (presumably to meet some state law requiring it to be a game of skill), and then shuffle the cases really fast in front of you like a game of 16-card monte. If you have a quick eye, you can follow the cases and know where the million is every time.

    Me personally? Since I won a little over half of the games I played, I made it a hobby of mine over the last year or so to take everything I could out of this game…over six months or so, I put $100 in to the machine and got out a Sony PSP, a Garmin GPS unit, and $125 worth of gift cards.

    So trust me, those machines (or at least the ones with the skill-game involved) are quite beatable.

  46. brooke says:

    I loved the claw machine! It was my absolute favorite machine!! And I loved to scope out which toy I wanted, then figure out which one was the most accessible. I rarely won, but when I did it was so worth it!! I probably donated those toys, but I loved the attempts to get them :-)

  47. bogart says:

    This post and the comments are great. What a kick. I agree … no need for guilt (or overthinking) on spending fun money. It’s for fun!

    All that said, my understanding is that animals that can push a button and get a reward that they receive only sometimes (unpredictable when) are more devoted button-pushers than animals that get a reward every time. Human animals too. Casinos know this and so, I bet, do claw-machine makers. If the kids keep playing and win occasionally, they may enjoy playing this one for a long time.

  48. Melanie H says:

    Reminds me of one day at a local mexican restaurant my husband won a stuffed animal in one of the claw machines & I gave it to a little girl maybe about 5 years old. Her dad then gave her money to play & she won a stuffed animal & gave it to me. She was so happy & I was so happy for her, I still have that prize in my dining room. Just share their joy of winning :-)

  49. anne says:

    ok- i can’t help it- i have to tell you what my friend’s kids do-

    they pool their $ and take turns w/ the claw. one kid plays the game, and the other two position themselves around the machine and give advice and feedback to the claw operator.

    then they end up winning a ton of toys and stuffed animals, way more than if they were doing it alone.

  50. nancy says:

    I know you are trying to teach your children at a young age the value of money. 2 is a little early. I know you should start early but my almost 2 year old has no concept of money. If she wanted to waste her money ont he claw machine so be it. We all have to learn thes lessons early. Both my children have bank accounts the 2 year old I save on her behalf. My son is 9 and we started at 4 when he could understand money. My 9 year old makes deposits and decides to save or spend. Generally he spends but now he is saving for a specific item when he saves half I will put in the other half.

  51. Laura says:

    This made me laugh – my younger sister is an absolute CHAMP at those machines. She literally won a prize 75% of the time – and this after similar lectures from our parents about how they were scams. Kind of a random skill, but some people do have it!

  52. Brittany says:

    Correct me if I’m wrong, because I’ve only parented siblings and not my own children… but don’t you want to start teaching children about money BEFORE they have a concept of it, so you can shape the concept instead of reform ideas they already have? A 2 year old might not understand why mom and dad are giving her pieces of metal and then taking them away when she wants candy, but eventually she’ll grasp that she can have M&Ms if she has quarters left, but will have to wait until she gets more quarters if she uses them all before she can get new M&Ms (therefore subtly introducing the concept that money can be exchanged for items you want, but that it is limited in supply so you have to be careful how/when you spend it).

  53. dagny says:

    Those machines, and gambling in general, hook people via “variable ratio reinforcement”.
    The first time I went to Las Vegas (late 70’s), I looked around at all the casinos and hotels and thought “these were not built by people winning”. Then again, I’m a quantitative thinker.

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