Money Issues and Teens: What's Realistic?
Learning to be independent also means finding ways to be financially independent from parents. To do this without harming other parts of a teen's life in this world of $10 movie tickets, $3 a gallon gas, and $150 jeans can be a struggle. Parents need to find a way to teach financial independence and still support children at the same time.
It started as a few bucks a week for candy or whatever, but the allowance issue has ballooned into a nightmare. Your daughter wants more things and to do more things, and it's all expensive. How much do you give her and for what is up to you. But one thing is for sure: she needs to learn that you are not a bottomless wallet and that, indeed, money does not grow on trees. It's a good idea to set a reasonable allowance based on what her needs might be. A movie on Friday could mean $15 to $20 each week; a soda here and there all week another $5 or so. And she'd like a bit of discretionary money to save for something big or spend as she wishes. Sit down with her and figure out the average week, then balance it with what you can afford as a parent. Then, attach some responsibilities to the allowance, such as cleaning her room each Thursday, emptying the dishwasher, or mowing the lawn, whatever you agree she can do. Then stick to it. If she does not do her work, she will not be paid. Just like the real world, almost.
What about paying for grades? Some parents swear by it, but others feel the reward for good grades should come from within. It's a good idea, if you don't pay for grades, to explain that to your child.
What if your child runs out of money before the week is over and her friends are doing something she wants to do? Just once, you may want to give a bonus or advance, but don't make it a habit. She needs to learn to plan her spending and live within her — and your family's — means.
This can be a valuable lesson when it comes to expensive items. Let's say she lusts for a pair of $200 jeans. You tell her she can save her earned money and buy them. She does it, and then she cannot afford to go anywhere in them. Rather than give her the money, let her feel the repercussions of her decision. Next time, the on-sale jeans might just look cuter after all.
More and more kids have credit cards now. Do you want your child to have one? Most adults know the lure a credit card can have. You don't have to think about what you are spending until that bill comes in, and purchase decisions made can be rash and even bad. Even if you have the means to pay any balance every month, it is a better idea to teach your child what money really means. Try this: when you go back to school shopping, instead of just purchasing each item as your daughter chooses it, hand her an amount of cash totaling the amount you want to spend. Tell her it's hers to spend on whatever she needs for back to school. Watch as she suddenly thinks twice about the ultra-expensive jeans and realizes she can buy three pairs of another brand for the same price. Real money leads to real decisions. Credit cards can rob girls of that important lesson.
More and more credit card companies are soliciting teens for their business. Warn your teen never to fill out an application form, even if it's for a free gift or a one-time discount.
With the easy access to credit through in-store sign-ons and other solicitations, more and more teens are getting deep into debt, sometimes without their parents even realizing it. (How many times have you been told “You can save 15 percent today!” by a salesperson; your teen probably has been too.) This is a danger for many reasons. First, the teen has to pay off the debt, often needing to work more and more hours (and that takes away from school and extracurricular time) and second because this debt can harm her credit score for a good long time. Sit down with your daughter and explain to her what a credit score is and how it can hurt her future. If she must have a credit card, give her one that is attached to your account, and help manage it for her. Give her a very low limit and sit down and help her pay it each month. That way she can feel grown-up, build credit, and learn responsibility all at the same time.
So she decides she wants a job. In a way, you are proud of her willingness to work hard, but it is important here to remember she has a job already: it's called school and learning about life. If your child is doing relatively well in school and socially, a job with a few hours that does not get in the way of school and fun is acceptable from fifteen years old on. But if her job starts to get in the way of school and life, it's time to back off, no matter how much she likes that extra cash. If she insists on having a job, tie her permission to work to how she maintains her schoolwork. If it slips, she must cut back on work hours or quit completely. And help her look for a job that will not stress her out too much. Retail is a common choice for young women, but other choices are good too. If your town has a business that is owned by a family (who has children of their own and understands the need to schedule kids carefully), that's always a good choice.
Work teaches responsibility, and helps a girl feel she can pay her own way and learn that money is a tool. Work also builds character.
In the end, your child's first responsibility is to get a good education. Work should never interfere with that, and work should never be unsafe for your child. Federal and state child labor laws restrict where your child can work, what she can do, and how many hours she can work. Laws vary in each state, but none allow children to work under the age of fourteen. Some states do not allow teens under sixteen to operate deli slicers, and some do not allow children under eighteen to work past 10 P.M. on school nights.
The same can be said for a car. Kids who buy cars find themselves slaves to the costs immediately: the costs of insurance, gas, and maintenance can all force a kid to have to work countless hours. So while your daughter may feel buying her own car is a sign of independence, it can actually make her a slave (more on driving in Chapter 7). As much as she may fight you, try to hold off letting her buy a car and taking on too difficult a job. You know — even if she doesn't — that she has the rest of her life for bills and work. Many high schools warn parents at freshman orientation about “car-itis,” a syndrome that strikes teens who purchase cars. Their parents are proud when their child saves the money for the down payment, but in time, the child ends up working long hours and struggling to keep up with insurance and even gas bills. This is a time for learning and growth, not for struggling with bills. Just doing her schoolwork, being part of a team, and working toward growing up is all she needs on her plate.