Does your teenager think you’re an ATM? If you’re constantly being asked for a never ending stream of cash, it’s time to put the brakes on and teach some basics to your teen on the value of money. There are two schools of thought on how to best approach this. Some financial experts suggest giving teens and allowance and other suggest teens actually work for their extra spending money. This approach espouses the notion that in order to spend, you must be prepared to earn. Follow these recommendations from the financial experts to get your teen on a path to sound money management.
Simply giving a teenager a defined amount of allowance every week and teaching them to either spread their expenditures over the course of a week does little to teach the value of money. They will know the cost of everything on their wish list, and begin to presume that simply accumulating this gifted allowance is a path to constant acquisition. Nothing could be further from the truth. Unless your child is set to inherit a substantial trust fund, you’re doing them a disservice. We teach our children to read, be kind and be responsible for their own actions. We must also teach teens that money must be earned. Teens need to understand the correlation between working and earning.
Encourage your teen to secure a part time position and work weekends or a few nights each week. Have the discussion with them about the options they have with their earnings. Savings for gifts, trips or large ticket items should be part of the discussion. If a younger sibling has a birthday on the horizon, have your teen take advantage of the awesome deals offered by Groupon coupons and select from one of the fun kits available from Lego as a gift. This might well require savings a few dollars each week from their paychecks. Instill the value of savings. Do not be controlling on what your child spends their earnings on. Their choices will no doubt be different than yours. The fundamental point is they must understand the relationship of earning to the price of items on their wish list.
Setting this foundation is sound parenting. While you’ll no doubt receive push back from your teen as the process unfolds, realize that it is all a learning curve. In years to come, your teen will thank you. Best of luck in instilling sound money management principles and the value of money to your teenager.