I admit that one of the biggest lessons I taught my daughter came about not because I wanted to teach her about money, but because I wanted to end all our arguments about spending on things for her.
As some of you may have experienced as a teen or as the parent of one, these years can be very stressful for both parties, especially on a mother/daughter relationship.
Every trip to the mall becomes a battle of wills regarding “needs” versus “wants.”
Whether you were the parent or the child, these arguments may sound familiar:
- The Old Navy jeans vs. the desired-designer-of-the-day jeans.
- The cute dress you found on sale for the eighth-grade dance vs. the full price one that makes her look “more mature.”
- But everyone is spending at least $20 on (popular girl’s) present!
At the suggestion of a friend in Australia, we gave my daughter – in middle school at the time – a generous monthly allowance. This allowance was to cover almost everything I had historically paid for after often heated discussions, including:
- Birthday presents for friends
What did I pay for?
- Athletic footwear and uniforms (she was a runner)
- Basic toiletries
- Basic underwear
- Outfits for family celebrations
My daughter quickly learned how to allocate her funds – not just within the month, but looking ahead and saving for future events.
She also had much more incentive to babysit to augment her funds. (Another important value lesson – choosing between a sleepover with friends or making money.) She became an amazing bargain hunter, and took pride in her finds.
I believe this “lesson” stuck with my daughter and has helped her as an adult. I think the pride thing lingered as well. I only mention this because for several years, she seemed a bit reluctant to let me treat her to things she couldn’t afford. I worried that this lesson from middle school somehow made her think she wasn’t “worthy” – a negative unintended consequence indeed.
So, did I do the same thing for my son when he hit the same age? No way!
When he was that age, he probably would have spent all of his money on video games and would have been happy to wear sweat pants and t-shirts every day.
Money seemed to burn a hole in his pocket.
This is not to say that he didn’t appreciate nice things, like food. He was fairly particular about his food as a young child. (You would never guess that now – he is a real foodie.) He “particularly” liked filet mignon – he equated price with quality.
The story most often recounted about him is when he asked “What does ‘market price’ mean?” while reading a menu. The response he got from his dad was, “It means you can’t have it!”
At some point in high school, he became more fashion conscious, and that is when those heated “discussions” began. College was the time he truly learned to live within a budget, and now he is making ends meet with his stipend at graduate school, as I discussed in “Should Millennials Expect Bailouts from Family?” in March. Things that he likes but can’t afford often become birthday or holiday presents.
If you are reading this but are not in a financial position to pay your child any allowance, I encourage you to bring your children into spending decisions within your household budget.
At the grocery store, ask your child to decide how $1 to $2 of your budget will be spent on something like a “treat for the family.”
Show them some options so they get a sense of value, and show them something that is twice as expensive. Point out that if she can wait and save that $1 or $2 for next week, she will be able to buy the more expensive treat. As your kids get older, you can involve them in bigger decisions.
What is my money advice to parents of teens?
- Encourage kids to make their own spending decisions and trade-offs (within boundaries you set)
- Kids are different, so lessons may need to be different
- Kids grow up, so methods need to evolve over time