Help teens make the most of their money


You want your child to grow up to be financially independent, but you get discouraged as you watch him spend every penny he has on movies, CDs and french fries. You've tried giving him less money, you've tried giving him more money, and you have explained over and over again the concept of money management, but it doesn't seem to sink in.

The saying "Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime" applies here.

If you want your young teen to learn to manage his money, he needs to experience earning, saving and spending it. Instead of just telling him, give him the chance to make decisions, carry them out, experience the consequences and learn from his mistakes.

The following are some common questions from parents and kids and suggestions for using hands-on experience to teach money management skills: • How can I motivate my child to save money? The less mature the child, the more she is oriented only in the present, so it may be hard for her to understand the benefit of saving for the future. Because of her short-term focus, start with small goals on short timetables and give her an allowance weekly, rather than monthly.

Then, help her see how good it feels to save for something she really wants. The next time you're at the mall and she has a choice between buying a bracelet now or saving two weeks' worth of allowance to buy a new purse, encourage her to wait.

You can also encourage her to save by offering her a "match" program. If your child is working hard at a babysitting job, but is blowing her earnings each weekend, offer to match every dollar she saves rather than spends-up to a certain amount. Then set limits on spending this money, such as it may not be withdrawn until the end of the season or it must be saved for at least six months. • If I earn money by myself, why should my parents have a say in how I spend it? The answer, for many parents, is that the child is living under the family roof and being supported by the family income, so parents are entitled to control the money. But the more important answer is that financial responsibility is just one more of the many lesson we parents will teach our children.

Some parents simply rule that a teen must save all of his earnings. But that doesn't teach money management skills. A better approach is to help your teen come up with a balance between saving and spending.

Then, every dollar that comes into his wallet is distributed according to the formula you have worked out together-some goes into a college savings account, some into the bank to save up for the eighth-grade trip and some into his wallet for spending now.

The key is to include your child in the process. Work with him to decide what percentage of his earnings will be saved. Take him to the bank to open a bank account. Help him decide whether he would rather have three used video games or one brand new one. • Should I make my child work for his allowance, or can I just give him a small amount each week? Once a child leaves school and enters the working world, she will have

to work for every dollar. It will be easier for

her to cope with that if she learns the connection between work and pay while she's still young.

Asking children to help around the house to earn a regular allowance is not only reasonable, it's beneficial. It helps the child feel good about herself when she accomplishes a task and gets paid for it. Household responsibilities also help children learn time management since they must schedule their activities to get everything done in the time they have. If a child's time is stretched so far that she can't fit in a few household chores, then she may need to cut back on her activities. Remember:

Life skills are another important part of her education. • My parents say if I want a DVD player, I have to save to buy it. But I get only a small allowance-how will I get enough? Give your child a chance to earn more by working more. Let him think up some projects that are beyond the scope of his usual chores. Since it's summertime, suggest that he tackle a big job, such as painting the shed, cleaning out the attic or waxing the car. Or give him the option of taking on a smaller job but doing it over a longer period, such as keeping the bushes trimmed or the bathroom sinks clean.

Challenge your child to come up with a summer work proposal and negotiate the scope of the job and the proper compensation with you. Then teach him another important money management skill by putting him in charge of keeping track of how much he has earned and how much he's been paid.

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