Lisa is tired of feeling like a drive-through bank for her 14-year-old, who is always asking for money. So she decided to turn off the A.T.M. and give her daughter a $20 per week allowance for doing household chores. "This has helped greatly when we go shopping and she wants something," shares this Circle of Moms member. "I just say, ‘Have you got any money?'"
The money-doesn't-grow-on-trees dilemma Lisa struggled with is one that many parents of teens discuss on Circle of Moms. And many say that Lisa's solution, while a good one, spawns questions, such as whether you should insist on some control over the way your teens spend their allowances and whether you should stop paying for their discretionary purchases. Here, Circle of Moms members offer up a variety of ways to deal with these allowance issues.
Deciding Between a Tight or Loose Leash
When Jill’s daughter earns her allowance every two weeks, her husband deposits it directly into the 14-year-old's savings account directly from his paycheck. She and her husband then dispense the money as needed. "We give her cash when she needs it to go out with friends or [to] buy books to read," shares Jill. "She always gives us our change without being asked. She knows the value of a dollar, and in some ways, seems more in control of finances than her parents."
In other Circle of Moms member households, teens are given more control over their allowances. The money is simply doled out and the kids are allowed to decide themselves how to spend it. A member named Allison, whose children "get to use their money for whatever they want to buy, [like] a snack at the pool [or] saving up for a toy," says that giving them this latitude has helped to teach them the importance and value of money, because they get to experience their funds running dry firsthand: "It's amazing to see how they think twice about wanting something when it is their money paying for it instead of yours," she says.
Rewarding Money Smarts
If you choose to give your teen a longer leash, moms recommend building in ways to teach kids to be smart about money. In Julie's home, for instance, her kids are given full control over their allowance but are also given an incentive to save: "If they chose to [put the money in the] bank," explains this mom, "my husband has told them he will double it. This teaches them the principles of saving, investing and building interest."
Dawn and her husband have a policy about purchases that works similarly: they will chip in for an item one of their teens wants only after that child has made a concerted effort to save for it themselves. "They're learning a lot about budgeting. If they're working hard and doing well in school, and have saved a fair amount of money, I will help them buy something (within reason).
Incenting Your Teen to Save Up for a Goal
Other Circle of Moms members teach the importance of saving by expecting their kids to save up their allowances to pay for the big ticket items they covet on their own. A member named Joey says her daughter pays for everything herself, and has so far "saved to buy an iPod touch, then a lacrosse rebounder, and is currently working towards a trampoline." This mom reports that her daughter is getting a lot out of the process: "She enjoys calculating how long until she will reach her goal. It's a great way for [her] to get the items that I won't buy. Paychecks are a part of the real world, as is budgeting, saving and spending. Kids may as well learn now how to handle money in a responsible way.
What limits do you set on your teen's allowance?
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