Why buying a $10,000 watch for your girlfriend is a bad idea

Yep, you read that title correctly. The idea of spending that much money on anything, especially a gift, is crazy for most adults, never mind teens, but I had a high school-age student a couple of years ago who did just that.

Here’s the scenario: Bob [obviously not his real name] had a girlfriend. Bob also had a savings account his parents had set up for him that contained roughly $10,000. Bob and his GF were going through a rough patch because, well, high school. Bob thinks “I know! A gift will help me show her I love her and will make her happy!” Then, during what I can only think must have been a moment of insanity, Bob spent almost every penny of that savings on a fancy watch for his lady.

I nearly fainted when he told me. I can only imagine what happened when his parents found out what had happened to that savings account. Also, his GF and her parents were uncomfortable with how expensive the gift was and it just made the problems in Bob’s relationship worse.

We all can learn from Bob’s painful example.

What were Bob’s mistakes?

1. Assuming his relationship problems could be solved with money

Healthy relationships should never center around money. Relationships, by definition, are based on relations between people and how they interact. Of course, money can, and does, affect relationships all the time, but it should never be the number one thing holding people together or pushing them apart. If it is, then the relationship isn’t a healthy one.

Before you throw money at a problem with your significant other — or your friends, or your parents — think about whether there’s anything else you could do to patch things up. Sometimes a good talk, a sincere apology, or a sweet note will do more good than material things ever could. This is especially important when you’re young and have very little money to be throwing around in the first place.

2. Sacrificing one relationship for another

Bob’s parents had been more than generous in setting up that savings account, and I would bet they did it with the idea that this would help him in the future. Maybe he would run into a rough patch in college or afterward and this money would be his emergency fund. Or maybe he could have used it to buy a home. You know what they didn’t expect him to use it for? Gifts for his GF.

Chances are good Bob was thinking “Hey, it’s my money now, I can use it for whatever I want.” While that may or may not have been true, I guarantee that such a waste of their gift destroyed his parents’ trust in his ability to make good decisions and appreciate their generosity. Bob will probably spend years working to rebuild that trust.

3. Not considering the future

This is the biggie. While Bob certainly has some short-term work to do on his relationship skills, the long-term effects of his mistake are going to echo for years. Saving up an extra $10,000 isn’t easy in your teens and twenties. By being given a head start, Bob might have been able to start a retirement account or other investment fund that could have been making him money while he was still young. Having a head start with saving and investing, even by a few years, can have massive rewards later in life.

What can $10,000 do?

If you find yourself tempted to spend, do something Bob obviously did not: ask yourself what else you could use that money for. If any of it sounds better than what you’re about to buy, don’t spend the money.

So now let’s consider what $10,000 could have gotten Bob, other than a watch and a heap o’ trouble.

1. Security

This is the simplest answer to what the money could have provided for Bob. He was approaching college, a time when people are usually broke, and that money could have given him a cushion to help pay for college or even helped him move to his dream location after school to snag a job without taking on debt.

2. Experiences

Ten thousand dollars could have funded a pretty sweet trip around the world for Bob. Along the same lines, he could have used his stash of cash towards a study abroad program during college. Perhaps he could have taken a class in something he’d like to learn but couldn’t in school, like pottery or cooking. Any of these experiences would have given Bob a new perspective on the world, which is priceless.

3. More money

By investing the money, Bob could have actually used it to make more money for himself with basically no effort on his part. Even if he’d left it in the savings account, he could have made money, albeit a tiny amount.

4. A business

In today’s digital world, it’s pretty easy to start an online business, and plenty of teens have taken advantage of this. One of my students made a bunch of money for college through buying and selling high-end sneakers online. Ten thousand dollars would have bought Bob plenty of starter inventory if he’d wanted to start something like that.

Okay, I think you get the point. Bob made a huge mistake. Luckily, being young gives him the advantage of having plenty of time to recover from that mistake, but next time you feel your emotions pushing you to spend money, ask yourself if you’ll regret it in the future. I guarantee you Bob does.