Helping Teens Understand Value of Money

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Moms, dads, grandparents and the diverse families who make up our community will have a new resource for questions about local neighborhood schools, the best pediatricians, 24-hour pharmacies and the thousands of other issues that arise while raising children.

Moms Talk will also be the place to drop in for a talk about the latest parenting hot topic. So grab a cup of coffee and settle in as we start the conversation today with a question: How do we teach our youth to manage money?

Kim Koch: Ever since the first tooth was lost, the tooth fairy helped by bringing all unique denominations of U.S. currency. The first tooth lost brought an old silver dollar. Another brought a $2 bill. Each time it was something out of the ordinary. This inspired the piggy bank to fill.

I was very fortunate that my son had no shame in Mom shopping on the clearance racks, only spending a set amount or less on well structured shoes, me rolling up the legs of his pants in his younger years until he grew into them. Middle school was uniforms, which kept the clothing cost down.

His grandfather and Dad made my task difficult by both being impulse shoppers. Not thinking twice before a purchase, providing our only child with things to entertain him. I would strip this down to the bare minimum every chance I got. Instead of buying paints, we would make them out of flour and food color with some dish soap mixed in. Tons of books were given to us. We spent many hours a week snuggled up reading hand me downs with other peoples name written into the covers.

Our son got his first job the summer of his 15th birthday. He was to save 30 percent of each week's pay. After doing this, his Dad was inspired to take him and his savings, and they had a great few moments at Guitar Center spending it. When I found out, I was shocked and angered. I knew he had earned it himself, but I was trying to teach him to save long term.

His Grandfather that I had been battling with over impulse shopping got us all into the Dave Ramsey course at his church. It was a huge turning point for all the guys, I was proud that Dave Ramsey was reaffirming many of my beliefs with money.

The one thing I say over and over again, no matter how bad you want something, and how long it takes you to work towards it. Once you get the cash in hand, walk away, do some real soul searching and think of the long term. If it was really meant to be, you will go back and get it.

We as Americans have been living in debt for way to long. Most people live in the moment and can’t envision the long run.

Jan Katz-Kellogg:  My 15 year-old son is currently gaining more awareness about managing money than he would like to. He’ll turn 16 in October and wants a car. My father left him about $10,000 for that very purpose but he wants an $18,000 car. After a trip to Carmax, he came out a little clearer–and very quiet–about the financial commitment it would take to accomplish that goal. He will be getting his first real job over the summer and the real correlation between work and money will kick in. And though I know he will be thrilled to get that first paycheck, I almost feel sorry for him because it’s not going to go as far as he thinks.

 Some good ideas to help your teen manage money are:

1)      Give him/her a prepaid cell phone with a set amount of minutes. If the minutes are used too soon, the natural consequence is no more chatting until the next month OR doing extra household projects for extra minutes. Once the cell phone discipline is learned, put him/her on your family cell phone plan.

2)      Allowance- Give your teen a weekly per diem, a carefully thought out amount of money that will cover the costs of his after school life. Figure in money for other things like a couple of trips to McDonald’s, movie with friends, etc. The teen can either fritter it way on junk or save for something bigger.  Given just $5 per day or $35 per week, it can turn into the latest electronic gadget with a little perseverance.

3)      Buy Visa, restaurant and gift cards from your teen’s favorite store. Your teen will begin to learn that those cards do not have infinite dollars on them and will feel grown up using them.

4)      Some banks will allow your teen to set up a checking account with a parent       co-signature. The purpose of this is to begin the process of establishing credit for the future (i.e. student loans).

5)      It is SO important to help your child learn the importance—and unimportance–of money. In the end money doesn’t buy friends or happiness and that needs to be made clear.

Teaching your child to manage money now will pay off later. His or her future depends on it.