Money is an area that parents and teens may find conflict. It’s difficult to say no to your child and to teach him the importance and responsibility of handling money. One way to teach your teen financial responsibility is to give him an allowance. This is an excellent way to teach him how to budget, spend and save his money. It’s a wonderful way to prepare him for the real and grown up world of handling his own money.
There are various philosophies regarding when and how much to give a teen. Use this as a guideline, but the final decision will be yours.
Here are some guidelines on how to give your teen an allowance.
- Talk to your teen about money and what it means to have an allowance. When you’re ready to give your teen money, talk about the responsibility of handling your own money. Set parameters about what the money will be used for. For example, his gas money will have to come from his allowance, or eating out at restaurants with friends or going out for a movie.
- Be clear that an allowance is a privilege, and not an obligation. That means your teen is not entitled to get an allowance. It is out of the goodness of your heart that you give him one. Bad behavior such as cutting school, failing grades or breaking curfew means getting that privilege revoked.
- Be clear about what you will be financially responsible for, and what your teen is responsible for. Obviously, school tuition, school supplies and other school related expenses would be yours. On the other hand, discuss a clothing budget and other extra curricular fees.
- When choosing an amount, a good guideline is to get the age of the child, and divide that amount in half. That can be child’s allowance for the week. If this amount is too low for your teen, work out an expense sheet. This is a good time to introduce your child to an Excel spreadsheet.
- Open a bank account for your teen. Ideally you should have opened one during his childhood. You can choose to deposit all the money in the account and give your teen a debit card so he can withdraw it or use it like a credit card. This will also train your teen to start being responsible with a card. Also, stress that he should save part of his allowance in a savings account. Ideally, ten percent.
- If you teen finds the amount too low, suggest he can supplement his allowance by getting a part time job or a summer job. Another option is to attach the allowance money to his house chores. This means if he doesn’t do his chores, he doesn’t get his allowance. It’s just like in the real world, if he doesn’t show up for his job, he won’t get paid a salary.
- Give what you can afford. Don’t keep up with the Joneses and blow your own budget just so you can give your teen a big allowance just like his classmates. You won’t teach him the right values at all.
Do what works for you and your teen. Talk to other parents about how they handle their teen’s allowance. Involve your teen in the discussion but the final decision will be yours.