Author Topic: Money Management and allowances for teens  (Read 3018 times)

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Money Management and allowances for teens
« on: March 29, 2018, 02:17:53 PM »
I'd love to hear how people with teens handle money and allowances, and I'd love some ideas and advice for what I am thinking of doing.

I have two kids age 13 and 16.  They get an allowance as spending money (around $15/pay period which is every 2 weeks).  They also earn money at various jobs (dog sitting, babysitting) but don't bring in a ton of money that way.   They do GOBS of chores around the house which I do not tie in to allowance at all and don't feel the need to.

If they want clothing, movies, a snack with their buddies after school, a field trip, special school supplies, concert tickets, birthday presents for friends, etc... they need to ask me for it, and I decide if I will pay for it or not.  They have expensive tastes so it is getting tiring to me to always have to say no or to pick the cheapest option and have them think I am being stingy.

I want to switch to a system where I give them a much larger amount of cash each month, but they are responsible for buying clothing and shoes, spending on their own entertainment and gifts for friends, and anything above the basics for school supplies and toiletries.  (I.e I'll buy the $1.50 deodorant on sale; they can buy the $5 fancy pants one if that's where they want to spend their money.)  My hope is to get them used to budgeting larger amounts of money, and saving up for things like shoes for several months rather than spending all the money as soon as they get it.

Has anyone used a system like this with their teens?   I am not talking about the old "spend-Save-give" jar system people might use with younger kids but more of a system where I shift the responsibility for living expenses for the kids that I was planning on spending on them anyhow.  I'm thinking of something like about $150 each month, with the intention that this is the money that will be buying clothing (for growing teens), shoes, haircuts, field trips, perhaps sports gear, entertainment, and so on.  If you have done something like this, how much did you allot per teen each month or week?   And how did you set it up?

ontheway2

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: Money Management and allowances for teens
« Reply #1 on: March 29, 2018, 02:37:11 PM »
We have a similar setup to this. My kids each get 2x their age per month for optional expenses.  I pay for sports fees and equipment, school trips, etc.  They are responsible for entertainment and any other wants. It is not anticipated they can get close to everything they want. However, I am not the one prioritizing their wants this way.  I do also give a separate stipend twice a year for clothes and shoes.  I try to base it on needs at the time (plenty of clothes that fit at the beginning of the school year does not get as much as if they need a new wardrobe).

Payday is on the first of the month. They can earn extra money through the month. There are also mandatory chores that are not compensated.

Memo

  • 5 O'Clock Shadow
  • *
  • Posts: 72
Re: Money Management and allowances for teens
« Reply #2 on: March 29, 2018, 03:54:33 PM »
I think it partly depends on where your children are up to in terms of understanding budgeting and what supervision/advice you will be giving them/insist on as part of the deal.

Do they already have practice at delayed gratification? Are you going to expect that they will save at least a portion for long in the future type things (maybe a car)? Or that this money is to only meet immediate and medium term needs and wishes?

It may be an idea to set it up as a six-month contract with them that you/they can alter at the end of the period.

In my experience, the outcomes are variable!! The spendy, give-me-expensive-things kid continued to try to negotiate extra funds (but did start working a part time job early to satisfy this desire) and the able-to-delay-gratification kid made a huge success of budgeting, right down to buying a car the week before getting a licence!

If it was to happen over again? I would insist on saving for longer term (not just medium term) goals, even in the 'things you don't know about' category. Turn it more into life rather than just a string of I want-I want-I want consumption. Hey, good luck!

GizmoTX

  • Handlebar Stache
  • *****
  • Posts: 1225
Re: Money Management and allowances for teens
« Reply #3 on: March 29, 2018, 04:15:23 PM »
In HS, we paid for school related expenses, such as school supplies, books, & uniform items, weekly violin lessons, & occasional family & activity related trips. DS received a modest allowance for clothing & haircuts, deposited into his checking account once a month. He was expected to pay for everything else out of his summer job savings, including gasoline & other vehicle related expenses. He was not employed during the school year but did get some gifts from relatives. He was expected to do household chores but did not get paid for them. He managed his own checking account at age 16 & a credit card at age 17, with the requirement that he pay the CC off in full every month. (I could monitor his accounts online; it's important to do this for a period of time before a child leaves home.)

We paid undergraduate tuition beyond his scholarships to his university, books, & deposited a monthly stipend for his apartment & food into his checking account. He was responsible for paying everything else. In addition to his summer internships, he earned money by tutoring other college students in calculus.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #4 on: March 30, 2018, 05:54:56 AM »
I've been watching old reruns of the Canadian TV show "Till Debt Do Us Part" where the host Gail Vaz Oxlade, puts couples who are in serious debt on a cash-only system with jars for each category of spending.

I just watched a show last night where she had the mom set up a cash system for her daughter's allowance as well, and where she put the (teen) daughter in charge of buying a LOT of her own things.   She didn't specify what the teen was to buy with her own money (I am sure it wasn't food, or housing costs), but she had the mom give her daughter $50 a week or $200 a month so I think it must have included all clothing, shoes, and probably things like some school trips or club fees.

Freedomin5

  • Pencil Stache
  • ****
  • Posts: 884
  • Location: China
Re: Money Management and allowances for teens
« Reply #5 on: March 30, 2018, 06:46:18 AM »
Wow...there are some wealthy parents here. I stopped getting allowance at age 15 because that was when I was legally allowed to get a part time job. My parents covered food, lessons, housing, and toiletries - basic living expenses. I paid for my own shoes and clothes and entertainment.

Before age 15, I got my age in allowance.

In the expat community here, if you give your 15 year old $200 per month, most of it will be spent on alcohol.

Laura33

  • Handlebar Stache
  • *****
  • Posts: 1979
  • Location: Mid-Atlantic
Re: Money Management and allowances for teens
« Reply #6 on: March 30, 2018, 07:21:59 AM »
My DD is also 16, and this is what we started two years ago, when she had a big trip she needed to save up for.  We set up a checking account with a debit card, and a savings account.  We give her a monthly allowance, and that is deposited 2/3 into the savings account and 1/3 into the checking account.  She also has a small outside job (student aide at Hebrew school) that brings in about the same amount as her allowance.  In return, she is responsible for all entertainment expenses and extras.  I still cover clothes, because that has been too variable -- but by that, I mean "the clothes that I think she needs," not "hey mom I went to the mall with friends and found this cute top."  She is also perpetually broke, so we find other things around the house that she can do when she decides she needs some extra money.*

I think there is no one "right" solution, just what is right for your kid.  For DD, setting up the automatic transfers into her savings account has been critical, because she is a total spendthrift, and if she sees it, she spends it.  But that tendency is something that she is going to need to learn to manage herself when she moves out and gets a job, and our system is really helping her learn that "pay yourself first" is an effective way of doing that. It turns out that, yes, as we feared, she will spend her accessible cash down to almost nothing -- but at the same time, her savings account is "out of sight, out of mind," and has managed to grow to a couple thousand dollars!  So by the time she graduates and heads off to college, she will have hard dollars that prove to her how much she can build by just putting a big chunk away off the top of whatever she brings in.

*The outside job thing is fodder for a whole separate post -- we vetoed it for this year because reasons, but we still want her to learn that buying more stuff = more work, so we came up with our own list of things she can do to help us out that we pay her for.
Laugh while you can, monkey-boy

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #7 on: March 30, 2018, 07:22:57 AM »
Wow...there are some wealthy parents here. I stopped getting allowance at age 15 because that was when I was legally allowed to get a part time job. My parents covered food, lessons, housing, and toiletries - basic living expenses. I paid for my own shoes and clothes and entertainment.

Before age 15, I got my age in allowance.

In the expat community here, if you give your 15 year old $200 per month, most of it will be spent on alcohol.

Wow, what happens when the kids start earning their own money then?   Do they also blow it on alcohol?   

I would definitely ask for receipts to be sure my kids were spending the money on what they were supposed to be.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #8 on: March 30, 2018, 07:28:07 AM »
For DD, setting up the automatic transfers into her savings account has been critical, because she is a total spendthrift, and if she sees it, she spends it.  But that tendency is something that she is going to need to learn to manage herself when she moves out and gets a job, and our system is really helping her learn that "pay yourself first" is an effective way of doing that.

This is what I want to help my kids with.  I'm the same way as your daughter.   It helps me just not to see the money.   

But I want to start my kids on managing their money in a true monthly budget -- $30 for clothes and gifts, $10 for toiletries, $40 for dues and lessons (or whatever I am usually spending on them each month) -- so they can get a sense that even if you still have some money left in one category, that money isn't really "extra" discretionary funds.   It is being held in reserve to pay for the SAT prep class or big school field trip you want to take in three months. 

shelivesthedream

  • Magnum Stache
  • ******
  • Posts: 3329
  • Location: London, UK
Re: Money Management and allowances for teens
« Reply #9 on: March 30, 2018, 09:45:59 AM »
Speaking as a former teenager rather than a parent... I would love this system as it sucks to have your parents hold the purse strings. However, I would ease into it gradually, so each month give them a bit more money and make them responsible for one more thing. If they haven't had much practice, diving into the whole lot all at once might be a bit much for both of you. This will also allow you to work up to a reasonable full amount over time without having to guess blindly. So if you're not already, start tracking what you spend on their wants, and kick off with making them responsible for something small or finite (e.g. you know how much a haircut is and how often it needs doing, so you know how much to budget for that) and work up to the bigger or more variable things once they've had some practice and you know how much you usually spend.
Journal: http://forum.mrmoneymustache.com/journals/young-uk-little-money-lots-of-dreams/

Do I seem curt or like I've missed the point? Please forgive me - I've probably been typing attached to a baby.

Laura33

  • Handlebar Stache
  • *****
  • Posts: 1979
  • Location: Mid-Atlantic
Re: Money Management and allowances for teens
« Reply #10 on: March 30, 2018, 09:47:22 AM »
For DD, setting up the automatic transfers into her savings account has been critical, because she is a total spendthrift, and if she sees it, she spends it.  But that tendency is something that she is going to need to learn to manage herself when she moves out and gets a job, and our system is really helping her learn that "pay yourself first" is an effective way of doing that.

This is what I want to help my kids with.  I'm the same way as your daughter.   It helps me just not to see the money.   

But I want to start my kids on managing their money in a true monthly budget -- $30 for clothes and gifts, $10 for toiletries, $40 for dues and lessons (or whatever I am usually spending on them each month) -- so they can get a sense that even if you still have some money left in one category, that money isn't really "extra" discretionary funds.   It is being held in reserve to pay for the SAT prep class or big school field trip you want to take in three months.

How about giving them Mint or YNAB?  I think the idea of setting a budget and tracking spending is a very valuable thing for kids to learn, independently of how you implement that.  So you could sit down with each kid and help them come up with a budget and set them up with a program to track their progress.  And then you can implement that however you want -- leave everything in one account and just track your progress toward different goals, set up separate accounts for short-term spending and longer-term goals, or whatever.

FWIW, your plan was my initial plan, too.  But DD is ADHD/impulsive, and it was a struggle to get her to think longer-term at all; even moving from weekly to monthly was a significant reach for her.  And she's just never going to track anything, period.  So I ended up taking my ideas of how it "should" be done and throwing them out the window in favor of finding something that would work for the kid I had (e.g., artificial poverty; tying the long-term savings lesson to something she reallyreallyreally wanted).  So all I can really say is that I love your plan, because IMO that is the "right" way to do it, but be flexible and creative if it doesn't work perfectly for your kids.

And be prepared for unintended consequences.  My mom did just what you propose:  she asked me to come up with a monthly budget that included all of my clothes and other necessities and some entertainment stuff, and then she gave me that amount of money.  Except I learned pretty quickly that I didn't want to waste my money on clothes and just wore the same old stuff until it was ratty -- and then she was embarrassed to send me to school in those ratty clothes.  So she ended up taking me out every year for back-to-school shopping anyway!  Score!  ;-)
Laugh while you can, monkey-boy

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #11 on: March 30, 2018, 11:38:16 AM »
And be prepared for unintended consequences.  My mom did just what you propose:  she asked me to come up with a monthly budget that included all of my clothes and other necessities and some entertainment stuff, and then she gave me that amount of money.  Except I learned pretty quickly that I didn't want to waste my money on clothes and just wore the same old stuff until it was ratty -- and then she was embarrassed to send me to school in those ratty clothes.  So she ended up taking me out every year for back-to-school shopping anyway!  Score!  ;-)

*That* is what happened to me.   My parents gave me $25 each month for a clothing allowance as I recall.   It was $75 each season.   The idea was that I was supposed to learn how to budget on clothes.... the problem was I cared not at all about clothes, and hated to shop!   So I spent it all on books, and fun stuff like that.   I suppose it's the same as my life now -- I hate to shop and don't spend any money on clothes -- but I don't look great either.   If I had learned more about fashion and shopping when I was a kid I might have a better sense now of how to dress myself in a more professional manner.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #12 on: March 30, 2018, 11:48:26 AM »


FWIW, your plan was my initial plan, too.  But DD is ADHD/impulsive, and it was a struggle to get her to think longer-term at all; even moving from weekly to monthly was a significant reach for her.  And she's just never going to track anything, period. 

My son is like that (and I am).   That's why I'm thinking perhaps the "money jar" system Gail Vaz Oxlade uses in "Til Debt Do Us Part" (and I'm sure many other people use) might work well for him?

Set up maybe 4-5 jars on a shelf in his closet and put cash in each week for SPENDING.  This isn't a case where I'm trying to get kids saving their income, because this isn't actually their income yet... it is parental money but I am letting them have control of it.

Have jars labeled something like:   1) clothing and shoes    2) entertainment/snacks    3) school needs   4) grooming/personal 5) misc/gifts?

All he has to do is get the receipt for whatever he buys and to take the money out of the correct jar.  But without a debit card this would require advance knowledge of any purchases so he would have the money on hand to make the purchase.  Still, he'd probably be really happy to have control over this money instead of asking me for it.   If the money plus receipt doesn't add up on Sunday evening of each week, I won't refill the jar... so that's in incentive to remember to bring home the receipts, I suppose. 

CatamaranSailor

  • Stubble
  • **
  • Posts: 114
Re: Money Management and allowances for teens
« Reply #13 on: March 31, 2018, 12:46:44 PM »
We have a 16 year old and a 12 year old. Each gets an allowance based on chores being completed. We count the 16 year old's phone in as part of the allowance. The 16 year old is responsible for dishes and needs to load and unload dishwasher at night and in the morning. It only took turning his phone off a couple of times for him to get it. He does well. The 12 year old does garbage duty and dog poop duty. He needs occasional reminding....which means if he "forgets" he owes us another chore. We want to instill work=money.

We cover the 16 year old's school trips but make him stick to a budgeted amount. He recently started driving. Our deal is that he is an occasional driver on the cars we currently own. We will not be buying him a car nor encouraging him to buy one (his insurance would go up like 5x). We do cover his insurance but he has to pay his own gas. We told him we'd do this until he is 18 at which point we'll look at what's going on with college and make some decisions.

Anything toy/gadget related is purchased out of their own funds. They can (and do) as for additional jobs. The 16 year old is a horse fanatic. We told him in no uncertain terms we'd never buy him a horse so he volunteers at a stable cleaning & mucking to get ride time in. He's currently saving for a saddle. This summer, the 16 year old will be working. We told him he needs to put $3k into savings for college. It should be doable with his job with some $$ left over.

The 12 year old is pretty happy taking out the garbage and collecting his $10.00 a week. We'll see what happens as he gets older. He does spend a fair amount of money on decks of cards as he seems pretty serious about becoming a card shark...but thats a whole different post.

Goldielocks

  • Walrus Stache
  • *******
  • Posts: 5289
  • Location: BC
Re: Money Management and allowances for teens
« Reply #14 on: April 01, 2018, 12:56:36 AM »
I started my 17 year old on managing all of her money last September. I gave her a 6 month allowance.   
Normally, she gets $40 a month for her phone and extras / fun,  to use as she likes.  She is supposed to earn it if she wants more.   She is very much "on" or "off" of spending.  She will not spend a dollar for weeks on end.

The amount given this time, however, was $100 per month and included her clothing and school fee budget now.   What happened is she did not spend anything, she actually reused old school supplies and traded a few clothes with friends... and then was excited for Halloween and Christmas and spent it all on gifts for others and on Halloween decorations.   

At least then she started to say "yes!" to the neighbor's babysitting requests to make a bit of money... she had never initiated getting paid work before.

kenner

  • 5 O'Clock Shadow
  • *
  • Posts: 30
Re: Money Management and allowances for teens
« Reply #15 on: April 01, 2018, 01:46:44 AM »
And be prepared for unintended consequences.  My mom did just what you propose:  she asked me to come up with a monthly budget that included all of my clothes and other necessities and some entertainment stuff, and then she gave me that amount of money.  Except I learned pretty quickly that I didn't want to waste my money on clothes and just wore the same old stuff until it was ratty -- and then she was embarrassed to send me to school in those ratty clothes.  So she ended up taking me out every year for back-to-school shopping anyway!  Score!  ;-)

*That* is what happened to me.   My parents gave me $25 each month for a clothing allowance as I recall.   It was $75 each season.   The idea was that I was supposed to learn how to budget on clothes.... the problem was I cared not at all about clothes, and hated to shop!   So I spent it all on books, and fun stuff like that.   I suppose it's the same as my life now -- I hate to shop and don't spend any money on clothes -- but I don't look great either.   If I had learned more about fashion and shopping when I was a kid I might have a better sense now of how to dress myself in a more professional manner.

Yep--In my case I ended up with a nice book collection.  The clothes still fit, so why would I care about new ones?  That was (is--now I'm one of a pack of engineers who pretty much all operate the same way) a reasonably harmless example, though...I know of kids who figured out that if they skipped buying lunch and went for the ridiculously-caffeinated beverage they could save lots of money that way which I'm pretty sure wasn't what any parent was going for.  I know the teachers didn't appreciate it.

shelivesthedream

  • Magnum Stache
  • ******
  • Posts: 3329
  • Location: London, UK
Re: Money Management and allowances for teens
« Reply #16 on: April 01, 2018, 05:28:59 AM »
I think that's a good argument for introducing a new budget category each month rather than diving in all at once. It gives you a chance to discuss reasonable expectations for that budget category. For example, clothes. You have to have enough clothes that you can put clean ones on every day (maybe an intro to doing all their own laundry at the same time??) and they can't have any huge holes or rips or offensive slogans or images. If they want to have two outfits and do laundry every other day and spend the rest on books, no problem. But you've been explicit about the outcome you expect from the clothing budget (clean clothes in decent condition every day) and then given them a choice about how to achieve it. Just saying "Now you can buy your own clothes" isn't really enough if there are secret hidden caveats that you want them to mind-read. And the consequence if they don't keep to your (modest, reasonable) rules/standards? You take the clothing budget away from them and start buying their (practical, hard wearing, parent-chosen) clothes again. If they care about clothes, they'll be annoyed that they don't get to buy the cool ones. If they don't, they'll be annoyed that they don't get to spend any extra money on non-clothes.
Journal: http://forum.mrmoneymustache.com/journals/young-uk-little-money-lots-of-dreams/

Do I seem curt or like I've missed the point? Please forgive me - I've probably been typing attached to a baby.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #17 on: April 01, 2018, 09:41:46 AM »
I'm getting some good ideas here, and am planning a course of action.   Thanks for all the thoughts and advice!   I think I am going to do this.  I really want my kids to be better at budgeting than their father and I were.

shelbyautumn

  • 5 O'Clock Shadow
  • *
  • Posts: 85
  • Age: 27
  • Location: Mississippi
Re: Money Management and allowances for teens
« Reply #18 on: April 03, 2018, 01:39:55 PM »
And be prepared for unintended consequences.  My mom did just what you propose:  she asked me to come up with a monthly budget that included all of my clothes and other necessities and some entertainment stuff, and then she gave me that amount of money.  Except I learned pretty quickly that I didn't want to waste my money on clothes and just wore the same old stuff until it was ratty -- and then she was embarrassed to send me to school in those ratty clothes.  So she ended up taking me out every year for back-to-school shopping anyway!  Score!  ;-)

*That* is what happened to me.   My parents gave me $25 each month for a clothing allowance as I recall.   It was $75 each season.   The idea was that I was supposed to learn how to budget on clothes.... the problem was I cared not at all about clothes, and hated to shop!   So I spent it all on books, and fun stuff like that.   I suppose it's the same as my life now -- I hate to shop and don't spend any money on clothes -- but I don't look great either.   If I had learned more about fashion and shopping when I was a kid I might have a better sense now of how to dress myself in a more professional manner.

Yep--In my case I ended up with a nice book collection.  The clothes still fit, so why would I care about new ones?  That was (is--now I'm one of a pack of engineers who pretty much all operate the same way) a reasonably harmless example, though...I know of kids who figured out that if they skipped buying lunch and went for the ridiculously-caffeinated beverage they could save lots of money that way which I'm pretty sure wasn't what any parent was going for.  I know the teachers didn't appreciate it.

I went for frozen yogurt and a coke. Then an ice cream bar during 6th period. In my 4 years of high school I never once ate from the cafeteria. Sorry mom and dad!!

littlebird

  • 5 O'Clock Shadow
  • *
  • Posts: 86
Re: Money Management and allowances for teens
« Reply #19 on: April 04, 2018, 07:40:26 AM »
This is the system my parents used with me and my sister starting when I was 14 and she was 12. My Mom says it worked. I don't remember it changing my ways very much but I was always frugal with very few wants. My sister on the other hand, was a spender. She was very fashionable and social and spent a lot of my parents money keeping up appearances. Once it was her own money she found much cheaper ways to go about it (thrift stores and such). We were responsible for everything except housing, food eaten at home, travel with the family and sports fees. If I wanted clothes, my money. School lunch or a meal out, my money. A movie, my money. Haircut, my money. Gas and minor maintenance for the car, my money. Though they did pay for bigger car maintenance things.

The way my parents did it was to open a bank account for me with a credit card that they were joint on. My Mom tracked what she was spending on us over a period of time and then started giving that money to us as a weekly allowance, deposited directly. I was responsible for tracking the balance and paying off the balance on the card every month. I'm sure there were some kind of consequences for failing to pay it off but I don't remember it ever coming up for me. Added bonus of doing it this way is that I have a credit history going back to when I was 14. Can never hurt to start building good credit.

My daughter is only a year old but I plan to implement something similar for her when the time comes.
« Last Edit: April 04, 2018, 07:46:45 AM by littlebird »

Freedomin5

  • Pencil Stache
  • ****
  • Posts: 884
  • Location: China
Re: Money Management and allowances for teens
« Reply #20 on: April 04, 2018, 09:34:15 AM »
Wow...there are some wealthy parents here. I stopped getting allowance at age 15 because that was when I was legally allowed to get a part time job. My parents covered food, lessons, housing, and toiletries - basic living expenses. I paid for my own shoes and clothes and entertainment.

Before age 15, I got my age in allowance.

In the expat community here, if you give your 15 year old $200 per month, most of it will be spent on alcohol.

Wow, what happens when the kids start earning their own money then?   Do they also blow it on alcohol?   

I would definitely ask for receipts to be sure my kids were spending the money on what they were supposed to be.

Yes. Or alcohol-infused trips to Thailand. Or Segways. Or drugs. Or concerts. Most kids don’t bother earning their own money — per their parents, “Their studies are too important. They should spend their time focusing on that.” Yes, I know. Inconsistency galore. It’s a bit messed up here.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #21 on: April 05, 2018, 11:04:12 AM »
Well, I'm going to start this with my older child tomorrow.   I am going to transfer cash to him every Friday.  I am giving him $50 a week with 5 jars to keep the cash in.  The jars will be labelled:

1) clothing and shoes:   $15 a week
This includes:  underwear, socks, PJs, bathrobe, clothing, sneakers, dress shoes, coats, hats, mittens, snow boots, ties, dressy clothes, school spirit wear, team or college sweatshirts, souvenier sweatshirts, baseball caps, hoodies etc.  He is still growing, so this area is still a big expense -- he just moved into size men's Small from youth size Large so he will need more clothes next year.

2) grooming and personal care:   $10 week
This includes haircuts, glasses and/or contact cleaning solution; sunglasses, body wash, deodorant, tooth whiteners, special shampoos he wants; supplements or protein powder, etc.

(Our insurance covers the cost of budget prescription glasses or contacts -- basically one pair per year... he can chip in the extra if he wants the designer glasses etc.)

(I will cover as part of household expense basic bar and liquid soap, basic shampoo, and basic lotions etc.   Also entirely the cost of braces above what insurance pays.)

3) Sports, School, Scouts:  $10

This includes:  field trips, sports equipment (not a big expense- swim suit, goggles, frisbee, cleats, basketball), school supplies (binders, paper, mechanical pencils, backpack, lunchbox);  test prep books, and weekend Scout camping trips.

(I will pay yearly membership fees or dues for Scouts, sports teams; cost of AP exam ($100 each!), cost of any necessary tutoring.)

4) Entertainment, Snacks and Gifts for friends:   $10
This includes: movies and popcorn, soda and chips from the vending machine, trips with friends to fast food places after school; computer games and anything virtual for those games; any music;  birthday gifts for friends; laser tag with friends; rock climbing zone with friends; birthday gift cards for friends.

(I will cover cost of Netflix and family trips to movies or fast food)

5) Other:   $5
This includes pet supplies, room furnishings (like if he wants a lamp for his desk), and anything else I haven’t thought of.  He could pay for electronics from this fund if he wants, but he'd need to add more through work to afford anything he wanted.


Can you think of anything missing?

Goldielocks

  • Walrus Stache
  • *******
  • Posts: 5289
  • Location: BC
Re: Money Management and allowances for teens
« Reply #22 on: April 06, 2018, 12:29:39 AM »
Donations..   could be for anything, not about tithing, but about appreciating and giving back.

Savings.  Start them on 15%.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #23 on: April 06, 2018, 06:08:09 AM »
Good point about donations!

Not sure about savings....  This is just to teach cash management.  It is MY money that I spend on him; I'm just letting him decide how to spend it, basically, within the framework of a budget I have created.  It isn't his own income.  When he gets a job he should save some of his income.

Freedomin5

  • Pencil Stache
  • ****
  • Posts: 884
  • Location: China
Re: Money Management and allowances for teens
« Reply #24 on: April 06, 2018, 06:25:35 AM »
Savings is an important part of cash management. It doesn’t have to be saving for retirement or something long term, it can be simply saving for a rainy day fund, or for unexpected expenses (e.g., sale on protein powder and you want to stock up). To your child, allowance is no different from weekly income received, so he should get into the habit of saving a portion of incoming funds. I guess your “Other” fund might be used for a similar purpose.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #25 on: April 06, 2018, 03:59:46 PM »
Yes. And he is absolutely supposed to be saving a portion of each week's allotment for future, more expensive purchases. For example, I know he is going to need a new winter coat as he's outgrown his old one this year.  Since a winter coat can be a large ticket item, he will need to keep aside perhaps $10 a month from his clothing allowance to have enough to buy what he wants come winter (but I'll also help him pay attention to sales, thrift store coats, and outlet stores to make his money stretch).  He's also likely going to need a new pair of hiking boots as his feet have grown a size.   That's why I am giving him a rather large (for us) clothing budget of $60 a month.

RFAAOATB

  • Pencil Stache
  • ****
  • Posts: 541
Re: Money Management and allowances for teens
« Reply #26 on: April 10, 2018, 06:54:15 AM »
Since in general parents go to work and kids go to school, and house chores need to be done anyways, how successful is tying kid's income to grades?  After all school is their job.  I suspect the going rate by the time my toddler is in school would be close to $100 an A and $50 a B x with a multiplier for middle school, high school, and advanced class status.  Having to drop $500-$2000 four times a year for a student sounds insane but if she's paying for what we normally cover it might make sense.

LiveLean

  • Pencil Stache
  • ****
  • Posts: 665
  • Location: Central Florida
    • ToLiveLean
Re: Money Management and allowances for teens
« Reply #27 on: April 10, 2018, 08:23:52 AM »
Boys here, 15 and 12.

This is something I've worried about a lot since I look back to mowing lawns from the ages of 11-15 and working at a video store from 16-18 as teaching me so many life lessons.

Our guys have chores and for a while we followed Dave Ramsey's "commission" philosophy, distributing weekly commission rather than allowance. That didn't really work. What worked, much to our pleasant surprise, is DW and I leading by example a MMM lifestyle. So our guys are rarely asking for anything (other than phones, of course, but it's clear they're going to have their iPhone 6s for a lonnnng time). The 15-year-old is a competitive swimmer and I've asked him a number of times if he'd like me to replace his worn, 6-year-old swim backpack. He said he's fine. He's had the same pair of sneakers since July, worn every day to school and elsewhere, and remarkably has kept them in great shape and not outgrown them (I guess they were big when we bought them.)

Thankfully our guys seem to understand that between competitive swimming (older son) and AAU basketball/Boy Scouts (younger one) we're putting out a big chunk of change and they don't ask for anything beyond essentials.

Looking back, I guess I shouldn't be surprised. My parents were great examples, never getting cable TV, driving modest American cars for 8-10 years, never subscribing to the latest trends, etc.

Living lean at www.tolivelean.com

Sibley

  • Magnum Stache
  • ******
  • Posts: 2906
  • Age: 32
  • Location: Chicago, IL
Re: Money Management and allowances for teens
« Reply #28 on: April 10, 2018, 08:44:03 AM »
Since in general parents go to work and kids go to school, and house chores need to be done anyways, how successful is tying kid's income to grades?  After all school is their job.  I suspect the going rate by the time my toddler is in school would be close to $100 an A and $50 a B x with a multiplier for middle school, high school, and advanced class status.  Having to drop $500-$2000 four times a year for a student sounds insane but if she's paying for what we normally cover it might make sense.

What if your kid truly SUCKS at math? Where absolute best effort is going to scrape a B-? You're just going to demotivate your kid from even trying - because why try? It won't do any good, she'll never be able to get an A. And she will be right, it won't do any good.

Be careful to emphasize any particular grade, and instead focus on effort.

jeninco

  • Pencil Stache
  • ****
  • Posts: 574
Re: Money Management and allowances for teens
« Reply #29 on: April 10, 2018, 09:18:45 AM »
Since in general parents go to work and kids go to school, and house chores need to be done anyways, how successful is tying kid's income to grades?  After all school is their job.  I suspect the going rate by the time my toddler is in school would be close to $100 an A and $50 a B x with a multiplier for middle school, high school, and advanced class status.  Having to drop $500-$2000 four times a year for a student sounds insane but if she's paying for what we normally cover it might make sense.

What if your kid truly SUCKS at math? Where absolute best effort is going to scrape a B-? You're just going to demotivate your kid from even trying - because why try? It won't do any good, she'll never be able to get an A. And she will be right, it won't do any good.

Be careful to emphasize any particular grade, and instead focus on effort.

Yeah, and to reinforce that on the other end, if you kid can just cruise through, and is good enough at math to realize that he can get a 90.0001 and still get an A with minimal effort, that's not what you want to incentivize either.

My kid's working in a pizza joint a few nights a week (around all his other obligations, so during HS soccer season one or two nights per week) and paying for a number of his own expenses. He's pretty fiscally responsible, but there's nothing that says "you could ride your bike instead of driving distances < 3 miles" like "you're paying to fill up the tank."  Plus, working for someone who isn't related to you (really, or almost) is a great experience.

Laura33

  • Handlebar Stache
  • *****
  • Posts: 1979
  • Location: Mid-Atlantic
Re: Money Management and allowances for teens
« Reply #30 on: April 11, 2018, 06:34:01 AM »
Since in general parents go to work and kids go to school, and house chores need to be done anyways, how successful is tying kid's income to grades?  After all school is their job.  I suspect the going rate by the time my toddler is in school would be close to $100 an A and $50 a B x with a multiplier for middle school, high school, and advanced class status.  Having to drop $500-$2000 four times a year for a student sounds insane but if she's paying for what we normally cover it might make sense.

What if your kid truly SUCKS at math? Where absolute best effort is going to scrape a B-? You're just going to demotivate your kid from even trying - because why try? It won't do any good, she'll never be able to get an A. And she will be right, it won't do any good.

Be careful to emphasize any particular grade, and instead focus on effort.

+1.  What is the specific behavior you would like to encourage?  Study time?  Remembering to turn homework in on time?  Doing the homework at all?  In case it helps, this is what we did:

In 2nd grade, DD had come out of a horrendous school situation and would have a complete meltdown before sitting down to homework (we're talking 45 mins for 15 mins of easy spreadsheets).  She never had a particular "thing" that motivated her, but she had just discovered the school cafeteria.  So we started giving her the ability to earn 25c/day, just for sitting down to do the homework without fussing.  That's it -- two days, and she could get those chips she had been ogling.

First day she was perfect -- sniffling, but caught herself.  Second day, she melted down and didn't get the quarter.  And that was it -- one more meltdown a couple of weeks in, but by that point she really had figured out it was not at all the same as the old school situation and she could handle it.  It was like training a dolphin, but with quarters instead of fish.

Here's the key, though:  at first, we set the bar really, really low, so it was something she could achieve easily.  And then once she got that first behavior down, we moved the bar.  Instead of just sitting down to do the homework, she had to stay focused on the homework for XX minutes.  And we kept moving the bar, one very achievable step at a time, until she was naturally doing the behaviors we had wanted her to do.

We still did a version of this, btw, in HS, up until about a year ago.  DD's big thing for an annoying number of years was she would not get help when she didn't understand something.  It was fine in MS, when she was smart enough to power through, but when she started getting into advanced math and AP classes, not getting a particular concept in time killed her.  So we offered the opportunity for "extra" allowance if she went to a help session before or after school, or set up a time to talk to the teacher, or worked on Khan Academy for whatever it was.  This one took longer, but she now seems to be naturally doing all those things that caused her massive anxiety a year or two ago.  Which is good, because in another year and a half, she is going to need to do all those things on her own, without mommy there to nag or bribe, you know?

Some kids do all this stuff naturally (me, DS).  Others you have to lead there with a trail of tempting morsels.  But they can get there -- you just have to figure out what kind of morsel is tempting to them, and what the behaviors are that are preventing them from getting there on their own.
Laugh while you can, monkey-boy

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #31 on: April 13, 2018, 04:45:57 PM »
The first week went quite well and I"m getting ready to pay out the next week's allowance. One thing that has become VERY CLEAR is it is hard to get $5 and $10 bills.   I don't actually have a bank anymore (I use two credit unions but they don't have branches around where I can stop by and get cash in small bills.)   Breaking a $20 to fit into jars of $15 and $5 is more work than I want to think about on a Friday night so I might need to rethink jars/budget so everything is $20.

PoutineLover

  • Pencil Stache
  • ****
  • Posts: 738
Re: Money Management and allowances for teens
« Reply #32 on: April 13, 2018, 05:03:17 PM »
Most money management is done online anyway, can you get him a bank account and just etransfer? Have a shared google sheet where you can update the balances of each category when you deposit or he spends. Make sure the total in the spreadsheet corresponds to the balance in the account.
My Journal: It's all gravy
Tangerine Referral Code (we each get $50!): 49886083S1


asauer

  • Pencil Stache
  • ****
  • Posts: 560
  • Location: North Carolina
Re: Money Management and allowances for teens
« Reply #33 on: April 18, 2018, 06:26:19 AM »
We have a somewhat similar set up where each quarter, I present the budget of what I will buy.  Anything else above and beyond is up to them (ie. fancy jeans instead of Old navy jeans, b-day presents for friends etc).  Right now they're not old enough for real jobs so in addition to 'family chores' (unpaid), they can sign up for paid chores which are bigger things that I hate doing.  I'm totally willing to pay them for doing stuff I dislike.  This summer, they will start doing babysitting, pet sitting etc.  The next year, I will remove much of the chore $ and expect them to increase marketing for other services.

Dreams

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Re: Money Management and allowances for teens
« Reply #34 on: May 18, 2018, 09:55:14 PM »
That will make them feel an ounce of responsibility, which is a good thing.
« Last Edit: May 19, 2018, 10:12:41 AM by Dreams »

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #35 on: May 19, 2018, 06:47:32 AM »
Most money management is done online anyway, can you get him a bank account and just etransfer? Have a shared google sheet where you can update the balances of each category when you deposit or he spends. Make sure the total in the spreadsheet corresponds to the balance in the account.

I think we will move to this in the future, but for now spending the cash seems to make it, well, more tangible.  I did decide to fund my sons "jars" in multiples of $20 to make everything easier cashwise. 

Our system has been working very well so far.

Cali

  • Stubble
  • **
  • Posts: 131
  • Location: SoCal
Re: Money Management and allowances for teens
« Reply #36 on: May 19, 2018, 08:11:46 AM »
One thing that has become VERY CLEAR is it is hard to get $5 and $10 bills.   I don't actually have a bank anymore (I use two credit unions but they don't have branches around where I can stop by and get cash in small bills.)   Breaking a $20 to fit into jars of $15 and $5 is more work than I want to think about on a Friday night so I might need to rethink jars/budget so everything is $20.

Don’t most credit union networks have an ATM option? Nowadays you can find ATMs that give out $5 bills.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #37 on: May 19, 2018, 08:22:24 AM »
One thing that has become VERY CLEAR is it is hard to get $5 and $10 bills.   I don't actually have a bank anymore (I use two credit unions but they don't have branches around where I can stop by and get cash in small bills.)   Breaking a $20 to fit into jars of $15 and $5 is more work than I want to think about on a Friday night so I might need to rethink jars/budget so everything is $20.

Don’t most credit union networks have an ATM option? Nowadays you can find ATMs that give out $5 bills.

None that I have found. 

the_gastropod

  • Stubble
  • **
  • Posts: 125
  • Age: 31
  • Location: Brooklyn, NY
Re: Money Management and allowances for teens
« Reply #38 on: May 26, 2018, 08:19:39 PM »
I'm working on a bit of a side project that might suit your needs. I kind of stole Mr. Money Mustache's Bank of MMM idea, and I'm building a little web app that should be a bit nicer than a spreadsheet. Check out https://www.mycheddartree.com/ and sign up for the beta if you're interested in giving it a spin.

$andra

  • 5 O'Clock Shadow
  • *
  • Posts: 8
Re: Money Management and allowances for teens
« Reply #39 on: May 28, 2018, 09:16:48 PM »
Be careful. A relative of mine gave his teenagers a bunch of money upfront for clothes, toiletries, etc. and all 3 abused the privilege -- street drugs, underage drinking, bad news girlfriends/boyfriends, eventually major legal trouble. Beware of unintended consequences and start with some serious restrictions and accountability/proof of where the money is going. Personally, I had very little access to cash during high school, which kept me frugal and out of trouble. I was an authorized user on my parents' credit card starting around 17, which allowed me to buy gas, basic clothing needs, and cover the occasional transportation emergency with their oversight, and also gave me a terrific starting credit score.

CrustyBadger

  • Bristles
  • ***
  • Posts: 325
Re: Money Management and allowances for teens
« Reply #40 on: May 29, 2018, 05:42:48 AM »
Wow, that's horrible Sandra!

Did your relative ask to see receipts?   I'm checking in once weekly with my son to see receipts for everything he spent and to make sure he has what he is supposed to have. No receipts, no money for the next week.