Sunday, July 31, 2011

Teenagers and Cash

  Cash is the third topic in my series which examines the relationship that teens develop with  Cooperation; Curfew; Cash; Cars; and Comrades. 
  Years ago, I found an article in my Sunday newspaper which discussed these issues, and I used them  successfully with my son Matt. The premise was that parents can talk till we are "blue in the face", but we can teach a lot more through experience.  Kids may even learn more from their failures.
  The idea was to teach money management before teenagers got to college.  That way, if the kids got into trouble, they would be still living at home.   Parents could get involved and get them back on track before they moved thousands of miles away.  The article described horror stories of parents sending college kids money for an entire month, and finding out the kids blew it all the first weekend.
  At fifteen, Matt was getting an allowance of $25.00 each week( fifteen dollars for chores, and ten dollars towards school lunches).  It was also time to start thinking about Drivers Ed, and a summer job, and so we decided to set him up with a checking account.  Our bank was offering "totally free checking", which meant that there would be no monthly charges in exchange for no interest.  The account also had a debit card, which was issued in my name because Matt was not eighteen.  All of this seemed low risk to us, because this happened at a time when the bank "ate your card" should you become overdrawn.
  The plan was simple.  I was paid through automatic deposit, and I set up a $100.00 deposit to Matt's account on the 15th of each month.  The summer installments would be used for back to school clothes. We knew Matt handled his allowance reponsibly, but we had no idea how this would play out.  At the end of the first year, Matt had a $900.00 balance.  He said he was saving it for a stereo system for the car he planned to get after he got his license.  One day, someone asked Matt how many checks he bounced.  He said none, and his balance had never gone below five hundred dollars!
  The first thing that Matt did was give two friends a one dollar check because they did not believe him.  At the mall, Matt went to the ATM, and then paid cash for items.  I could also give him a note which authorized him to use the debit card because it was in my name.  Matt asked if he could still take lunches some days, which was fine with us.  We didn't realize that he would spend more when he viewed his allowance  as "my parents money".
   As with the exercises with coupons for cooperation and the curfew, this experience also turned out better than we had hoped.  The best thing was that we all learned that Matt would be able to handle his own finances at college.  He couldn't understand how his friends could get into money trouble and blow money on "stupid stuff".  The article stated that as the kids accomplished each challenge, parents would see them start to ''grow up right before our eyes".   He had a plan and he knew he would be rewarded if he stuck with it!
  I hope you try this with the same success.  Nothing is one size fits all, so take what you like, and leave the rest.......and the beat goes on.... the beat goes on.......have a good week everyone....

1 comment:

  1. I sooo wish my parents had taught me this when I was young! I was one of those kids that went a little crazy with money my first month on my own. I joke all the time that I'm good at almost everything I do - except with money. I think that this was one of the best lessons you taught your son. Bravo!