Teaching Money Management

One motivational tool that works wonders for some tweens is money. Although paying children to behave, study, make good grades, and do their chores is anathema to many parents, the possibility of riches gets the attention of some little capitalists better than all of the admonishments and punishments in the world. Needing to pay children reminds parents to reward good behavior, which helps them overcome the problem of noticing when their youngster does something wrong but overlooking positive accomplishments.

Besides being good medicine for behavior problems, providing tweens with some pocket money to call their own has some other benefits. Few schools teach money management. If you continue to hold on to the purse strings and buy all of your tween's toys and treats, you will get lots of practice establishing financial priorities, doing simple math, budgeting, saving, and saying “no” to frivolous requests while your tween gets lots of practice wheedling, whining, begging, and feeling deprived. By providing some discretionary income, your child can start learning the art of money management the way tweens learn best: by doing.

Not all parents are comfortable with this arrangement. Some believe that paying children to behave appropriately, care for their possessions, and participate in the upkeep of the house warps their values. Indeed, when asked to do something extra because a sibling is ill or a parent is in a rush, children who are accustomed to being reimbursed for services rendered are likely to ask, “How much are you going to pay me?” and decline if the fee isn't high enough. Paying tweens for pro-social behavior may in fact have its drawbacks.

When my child has money, it burns a hole in his pocket. How can I teach him to save?

Help him learn by experience. Give him an allowance, open a bank account, and have him deposit a portion of the money each week for at least six months so he can save up for a big-ticket item.

A Word of Caution

If you do decide to provide monetary rewards for good behavior, specify your exact requirements in advance. If your youngster can earn money by cleaning her room, it will be important to decide exactly what constitutes clean and communicate your expectations clearly. Refrain from charging your child for misbehavior and chores that have been left undone, since a youngster with many behavior problems may end up owing money despite having faithfully made her bed and washed the dishes all week.

It is best not to attach strings to the money your tween earns, but you may need to retain veto power so you can nix plans to purchase a pet, an ATV, a BB gun, or some other item you strongly oppose. One popular strategy is to enable children to earn enough to cover some of the nonessential “extras” they very much want but that parents dislike buying, such as snacks at the movie theater, trading cards, or overpriced toys. Another is to insist that a portion go directly into the bank to be saved for a particular item. That way, tweens have the opportunity to make some real decisions and they learn to save, too.

If you also offer special money-making opportunities for completing above-and-beyond-the-call-of-family-duty chores, or if you advise her on ways to make extra money via lemonade stands, garage sales, dog-walking, and lawn-mowing services, your tween can learn about the joys of running a business, and really will have a chance to learn to budget and save.

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