questionswhat is a good alternative gift for my eight year…

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What about an iPod Touch? It is essentially a phone without a phone. If she doesn't have one yet, might want to consider that.

Something like the 32GB model: http://www.amazon.com/Apple-touch-Black-Generation-CURRENT/dp/B001FA1O18/ref=sr_1_4?ie=UTF8&qid=1354390607&sr=8-4&keywords=iPod+Touch

It can also be add in the Apple Outlet store for cheaper: http://store.apple.com/us/product/FC544LL/A/refurbished-ipod-touch-32gb-black

Or 5th gen: http://www.amazon.com/Apple-touch-Black-Generation-NEWEST/dp/B0097BEF5O/ref=dp_ob_title_ce

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How about a kindle fire? Useful for education, cool factor, and in budget!

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We got our niece a digital camera for Christmas a few years back (she was 9) and she loves it! We try to choose a gift that sparks a creative drive or opens up new worlds...we have also given her a telescope and a microscope.

Then there's always a pony...

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I was also going to suggest an iPod touch, Kindle Fire or the cheapest refurb iPad out there. There are other inexpensive tablets our there as well, I just don't have experience with them to recommend specific ones.

edit - if there is a hobby that she is really into or is getting into that may be expensive, perhaps something for that. Sports camp or extra dance classes, a new instrument and lessons.

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$200-$300 would cover a Google Nexus 7 tablet ...

http://www.google.com/nexus/

(If you wanted to go slightly higher, I can attest to the Nexus 10 being amazing and worth the money. My friend has one and between the screen, cpu, build quality, and just plain clever engineering choices, it's pretty mindgobbling.)

I'm not trying to start an OS war. I just think these have ridiculous bang for the buck. Also, android on tablets now has multiuser features that allow the kind of administrative controls you'd probably want on a child's device.

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I was also going to suggest an iPod touch. They're great for kids too young for a cell phone but ready for portable electronics with internet connectivity. Great for playing games, doing some light web surfing, listening to music, watching videos, etc. You can get the Kindle app and read books on it (although the screen is small).
A Kindle Fire would also be another good option for similar reasons (and better for reading on).

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IPod Touch was my first thought. Does just about everything kids want from cell phones anyway.

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Ipod Touch is a great idea. Just make sure to get a nice protective case if you decide to go that route.

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What about a gift card at Kiva? You can work with your daughter to select borrowers she feels invested in and she can help other people achieve their dreams. She will almost certainly make the money back and then she can reinvest it elsewhere. She doesn't get anything tangible, but it doesn't always have to be about that.

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Kudos to you for not giving in and letting her have the phone. I have an 8-year-old daughter too, and she won't be having a cell phone for q-u-i-t-e a while. Maybe when she can drive?

I like the idea of an iPod Touch, but I don't like that it usually means she's spending time isolated with an electronic device. Though there are tons of educational apps. Make sure to activate the parental controls on music, apps, and in-app purchases. My girl got a digital camera that she loves. Very interesting to see the pictures she generates on it. See the world through her eyes. I would recommend Canon -- but get one with the rechargeable battery pack and buy a few extras on eBay.

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Another vote here for the Touch.

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Another vote for iPod touch from me. You can even set them up for texting via wi-fi.

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Thanks for all the suggestions. No kitties please (DH is soooo allergic! and we already have a Pomeranian), I like the suggestions for the iPod touch. Do you think it is worth the extra $30 to stretch the budget a bit and go for the mini iPad? I have an iPad 2, just barely got a refurb and I really like it.