Note: This post is primarily about my teenagers, while the little ones do have ways to earn money and responsibilities, they are at a different level so read this with teenage boy in mind.
The twins have started their part time jobs! One of them just received his first paycheck. Now it’s time to implement some guidelines on managing their money. I am wide open for your advice especially if you have traveled this path before with teens…
So what have we done up to now…all of the kids have the ability to earn money through work around the house but let’s face it, it’s been pretty nominal. The twins have also picked up pet sitting and babysitting jobs in our old neighborhood.
They are and have been responsible for their own personal hygiene needs, their own clothing purchases and their own spending money. (Up til now they have relied on Christmas and birthdays for getting clothes, etc, making due with what they have. And I’m not above helping them when I see a need and they have been making wise decisions with their own money.)
Policy up til now…aside from birthday money which has been kind of left to their desires, all money earned has been split two ways: 1/2 to their pocket and 1/2 to their savings account. I don’t govern their spending money at all, but as mentioned above if I see they are making good decisions I will assist more with needs. Their savings account has been treated as a short term savings account only. Meaning they are able to set a goal, I approve it and they are able to withdraw money for that goal when the comes. With this policy, the twins savings accounts have been built and emptied several times.
Now to we are at today…with their part time jobs, they have the ability to make much more money before, and for now, I am continuing to pay them for things around the house. And with that in mind, they are on the verge of having more financial responsibilities ie car insurance, socializing more, gas, etc. (They’ve also been told that if they want a smartphone, they will have to pay for the phone upgrade and the data package, I pay the $10 per month for the shared minutes and unlimited texting on our family plan.)
Okay, so here is what I am thinking:
- I will take them to open a checking account.
- Each check will be divided three ways: 50% for spending, 25% towards short term savings goals (like we are using it now) and/or “bills” when that comes into play and then 25% for a long term savings goal like college or similar.
- They would put the 50% in their pocket because I really believe having and running out of cash will be the best tool for learning to budget their spending money.
- They would put the 25% for short term/bills in their checking account, making it easily accessible when needed. I would keep the debit card for now and give it to them when it was time for use.
- They would put the last 25% into their existing savings account and it would stay there, not to be touched.
What do you think of this plan? Have you tried something with your own kids that worked? I am very open to any guidance on this issue.