Downside of allowance = cheap, plastic toys

A few months ago we started giving our seven-year old daughter an allowance. She gets $4 per week distributed between three piggy banks: $1 to save, $1 to share (donate) and $2 to spend. The idea behind this system is that you teach kids the value of each of these actions -- that you should make thoughtful choices when it comes to money. The save and share options are easy: the money goes into the piggy banks and then goes somewhere else, either to a local non-profit or the great, big bank. The spend action is a little trickier. At seven years old my daughter doesn't really have big buying goals. Because she has hardly ever watched commercial television and seldom has the opportunity to browse the toy aisle at Target, she's somewhat oblivious to 'stuff.' The tricky part is when she goes to a friend's house and sees all of their stuff, and then she wants that stuff, too. Lately this 'stuff' tends to be from the dreaded Littlest Pet Shop by Hasbro.

Now, I am not vehemently anti-plastic. I was looking at my kids toys the other day, and we have a lot of plastic. We didn't set out to raise them on charming, handmade Waldorf toys, and as a result they have been the recipients of lots of plastic. Oh well. BUT. It still drives me crazy when brand new plastic toys come into our home encased in layers of plastic and wire packaging like the dreaded Littlest Pet Shops. But of course, she MUST have this Magic Motion Kitty pet, which I think is a ridiculous waste of money and just fuels the plastic toy industry. But it's her money, so shouldn't she get to decide how to spend it (within reason)?

Part of me thinks -- let her spend it, and when the excitement of this new toy wears off, then will she have learned a lesson about spending money? Part of me wonders if I shouldn't be steering her towards more lasting and durable items, like books? Clever girl will tell me, "why would I spend my money on books when I can get them at the library for free?" I don't actually know what I would steer her toward. Maybe I should come up with some ideas. But it feels hypocritical to let my kid buy something that I think is an environmental nightmare. I've talked to her about the plastic and the packaging, but she's seven and she just wants the kitty.

What do you do? Do you impose limits on what they can spend their money on based on your personal beliefs? Or do you just let them make their own decisions and hope the world doesn't go up in flames as a result (she says with tongue firmly in cheek)?

PS: As you can see, she bought the kitty.

PPS: Happy Spring!