You can probably tell from the subject line that I have daughters, although I'm sure there are things that sons just have to have in order to feel like they're fitting in with their friends.
I grew up in a fairly low income household, and don't ever remember having any of the cool things my friends had. Back then boom boxes were hot (c'mon, remember all the guys carrying them around on their shoulders, wearing parachute pants, and... ok, you get the picture
).
I want my daughters to fit in, but I also want them to understand the value of working for something. My 7-year old daughter saved her chore money, birthday money, and Christmas money in order to buy a new bicycle for $80. Man was she ever determined, and I think she felt a big sense of accomplishment when she made her goal.
My 9-year old has one more year to go before we'll allow her to get her ears pierced, and fortunately that seems to be in line with many of her friend's parent's rules as well.
What about your kids? When did you start having to buy them things like iPods, cell phones, etc? Or did you make them earn them?

