by Ashley
I was talking with a couple friends recently about back-to-school shopping. Our kids are teenagers now, and care more about brand names and labels than they used to in the past. The problem, of course, is the price tags on some of these “name brand” items can be astronomical and impractical for most budgets.
One friend said how she handles these requests is by setting a limit of what she’ll provide for a given item (e.g., say $50 for a pair of shoes), and if her teen wants something that goes above the limit, they have to pay for the difference out of their own savings. Makes them look twice at those $150 Nikes and really think about how many babysitting hours it would take to pay the difference to consider whether the cost is worth it.
I liked that idea – setting a reasonable limit for an item and telling my teens they can choose to purchase a more expensive version if they want to be responsible for paying the difference.
Then another friend chimed in with a unique approach.
She said starting her senior year of high school, her Dad gave her a biweekly “paycheck” for her to budget for all of her needs and wants. Prior to starting this, her Dad had calculated all the costs associated with raising his daughter. This includes:
- Apparel
- Sports registration fees
- Car insurance and gasoline
- Gifts for friend’s birthdays
- Just-for-fun treats (e.g., ice cream, Starbucks, boba)
- School events and extracurriculars (e.g., school dances, attire, school supplies, marching band, etc.)
- phone bill
- Beauty supplies (haircare, makeup, etc.)
- Entertainment and fun (movies, mall, dinner with friends, etc.)
Her dad did the math to figure out the average spent per month and gave a biweekly paycheck so she could start to learn about budgeting before she left the house. There were some things her parents still covered themselves (e.g., she had a bad sports injury that year and had to have surgery – obviously her parents covered all medical expenses). They also continued to still give her gifts for Christmas and her birthday outside of this budget.
In their case, my friend’s dad continued this practice through her college years. He gave her a set amount and that was it. If she ran out of money before payday, she had to figure it out. And if she budgeted and saved wisely, she’d have extra funds she could use for entertainment or fun.
I love this idea! While I think my newly-13 year olds are a bit young to be given that level of responsibility, I’d like to keep this tucked in the back of my mind for the future. What a great gift to be able to provide – teaching your child financial independence before they really go out on their own.
For my friend, she was a real proponent of starting while the teen is still living at home. That way if they run out of money, they still have access to food and they’re not going to end up in the dark (housing and utilities are covered by the parents). It’s a low-stakes risk with the potential of high rewards when your child learns how to weigh decisions about costs, and how to stick to a budget.
Right now, I give my girls a small monthly allowance ($25/each) and I make them use their own money if they want something special that I’m not planning to buy. An example is Starbucks (very popular with the teens in this area right now). Occasionally we’ll drive through a Starbucks and I offer to buy us all something. But if the girls want to take a special trip to Starbucks that I wasn’t planning to do, then they’ll have to use their own money to buy themselves a treat. This works great for now.
That said, I do like BOTH of my friends’ approaches to budgeting with kids. I plan to implement my first friend’s approach, where her teen pays the difference in price for an item that is more costly than she agrees to spend. And maybe in a few years I may adopt an approach similar to my second friend, whose dad paid out a biweekly “paycheck” so she could learn to budget more broadly.
What do/did you do with your teens? Or what advice would you offer to help teach teens budgeting basics in an age-appropriate way?
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Early 40s, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
I’m 38 now but when I was a teen, I lived in a very wealthy neighbourhood (my family was not wealthy – we were in the smallest house on the outskirts!). But all of my friends at school (including the ones with private helicopter pads and summer houses with 16 bedrooms) and I worked at least a couple evenings and at least one weekend day. I always worked more than that and that was on top of sports, music lessons, and theatre. It wasn’t that crazy – it wasn’t all at once through the year. I had tons of time to pick dandelions and stare at clouds.
I am writing this not to judge the youth today because I hear it’s REALLY hard to get jobs like we had when we were younger. I can’t imagine my parents giving me allowance money when I was a senior. I made a couple of hundred dollars a week. My dream jeans at the time were $80. I could afford them and the movies and all the snacks and makeup I wanted working 12-15 hours a week (I’d work 5-10pm on weeknights or a full day shift on the weekend at McDonald’s or the movie theatre or the grocery store).
I hear that these jobs now go to adults and that has really changed the landscape for teen work. I don’t know what I’ll do when my kids are older – I REALLY want to instill in them the work ethic I was taught. Some of my best friends and core memories were from my jobs. I learned how to be accountable for my actions, to be responsible with my schedule – my parents never communicated with my work. If I missed a shift, I was disciplined privately. Nowadays parents are involved in every aspect of their teens’ lives. All this to say, I am genuinely curious about how all of this is changing and I’m not sure yet what I will do. I’m glad for you posting this and getting me thinking. I know some parents don’t want their kids working and would rather them focus on school and I respect that. But I can’t imagine life without the freedom I started getting having my own money at 14. Nothing teaches the value of a dollar more than actually earning it yourself from a third-party (IMO).