If you’ve noticed that you’re always buying your children the latest gadgets, filling up their gas tanks, or sending them money when they’re away at college, this article is for you. If you find yourself in any of these predicaments, it’s time to wean your child off their own personal Bank of You.
Teaching your kids how to earn and save their own money at a young age pays off quickly in the long run. You’ll witness your children grow from needy money-munchers to dependable and financially responsible young adults. That’s every parent’s goal, right?
Given that your child’s role model for managing money is you, you may have to come up with a financially responsible budget if you don’t already have one. I recommend meeting with a financial expert. Ask your friends and family for recommendations – lots of people use them, and if you don’t, you should start! You’ll learn great tips and advice that you can pass down to your kids.
Once you’re ready to sit down and talk to your teen about taking on more responsibility, consider their age and how much they are ready to take on.
Age 13 to 15
These young teens aren’t old enough to have a real job, but they can still take on small projects on weekends, school breaks and summer vacations. Jobs such as babysitting, lawn mowing, shoveling snow, dog walking and tutoring may be great options for your teen. You can also offer money for odd jobs around the house, like cleaning out the basement or garage. It’s also wise to set up a savings account for your young teen, if they don’t already have one. Come up with a financial plan together, such as for every $10 they earn, $4 will go in their savings account. This helps promote the value of saving and steers clear of unnecessary spending.
Age 16 to 18
Older teens are more materialistic at this stage in their lives, so you can bet they will want to buy every trendy thing the second it comes out. By this age, they should have a steady part time job so they can earn money after school, on weekends and over summers. Setting them up for the financial responsibilities, and scheduling responsibilities, that the world after high school requires is very important. Set up a plan with your teen to help cover small bills – their cellphone, gas money, car payment, etc. They should also earn enough money to pay for their own social activities – going to movies, dates, or out for dinner with friends. Your teen shouldn’t be growing as much by this point, so your annual shopping trip for new school clothes might be coming to an end. Teens should be responsible for buying new clothes if they aren’t essential items. Fads and trends come and go – let your child decide if it’s important enough to spend their hard earned money on.
It’s very crucial to be clear on what you will and will not pay for when your kids start college. There will be a lot of new expenses such as tuition, food plans, housing and books. Decide on whether or not you will split these costs with your child and then take out the appropriate school loan. Spending money for concerts, partying and so forth should not be funded by you. Make sure if you’re helping your child through college, that all money contributed is to go toward groceries, rent and important school related costs. This is where your young adult will first get a taste of independent freedom and all the responsibilities and consequences that that freedom entails. Realistically, your child will not automatically be ready to pay for the things that come with being independent, so make sure they know you will help them out, but not save them from dumb decisions on their part. Your help is courtesy and not to be taken for granted.
The most important thing to let them know is that after they graduate and land that first job, the bills will officially be 100% their responsibility. You have to be able to save money for yourself and enjoy things in your life as well. Learning when to cut your child off will do yourself, and your wallet, a lot of favors.
Adapted from the article “Wean Your Teen Off the Bank of Mom and Dad,” from Milwaukee Journal Sentinel