The days are long but the years are short.  That is how many of us feel when we look at your growing kids and remember when they were itty bitty.  It can be a stark reminder that there is much information we need to instill into them before the leave the nest.  Today we tackle teaching teens how to budget.  The years are short, and they will indeed be out on their own sooner than we realize.  Let’s not waste these last few years and fail to attempt to impart financial wisdom to them.  I say attempt on purpose because we cannot force our kids to learn anything.  If they are unwilling, there is not much you can do.  But at the very least we can choose to be faithful parents and present them with wisdom.  What they do with that wisdom is up to them.

If this idea of teaching your kids to budget is new to you, then regardless of their age, you still need to start at the beginning.  They need to begin with the concept that money is used to:

1. Give
2. Save
3. Spend

But by age 14, jars may not seem so cool anymore.  There is nothing magical about the jars, other than most of us have some hiding around the house and they work.  If your 14-year-old wants to use envelopes, great.  Whatever system will help him or her in the process of budgeting is fantastic!

If the foundation need to be laid, start right away.  If your teen is teachable, it will likely take a single explanation for them to catch on.  Good.  Because there is more for them to learn.

By this age it is a good idea to expand their sphere of decision making over finances.  One day your 14-year-old will be 24 in what seems like a blink of an eye and responsible to buy his/her own groceries, wardrobe, etc.  What can you do in the next few years to prepare them for that day?  If they have been succeeding at this budgeting thing for a few months already, they are likely ready for the next step.

Food Budgeting

Did you ever shop for groceries with a set budget while still living at home?  If you did, kudos to your parents.  If you are like me, the answer is, “Ha! No.”

Here is one idea for introducing them to the idea of setting a food budget and sticking to it.

Once a month let your child plan the menu and shop for the items.  Set aside grocery money specific for this event so that your teen is doing the shopping and seeing the price of food and the challenge of staying under budget.  If you are a bulk store shopper, this may throw off your purchasing plans, but the lesson your child will learn is well worth the shift in routine and possible inconvenience to you.  This is an investment in your child and his/her future.

Start a few days before the actual purchase day to begin walking your teen through the process.  What do they want to make?  What items need to be purchased?  How much do they anticipate each item costing?  How much have you allocated for that meal and do their plans fall within that budget?

Head to the store with that list and allow them to compare prices between different brands and different stores.  Are they going to be on budget or do they need to rethink their plans?

If they can drive, it may be tempting to send them off on their own for this research.  As long as they come home with detailed notes on prices for different products, this is probably fine.  The goal is to recap with them after this initial research to answer questions, talk about price vs. quality of certain items, seasonal produce and how that affects prices, as well as helping them adjust their plan if needed.  It may be preferable for you both if you go together.

Once they have their plan fine-tuned, send them off (or go with them) with the allotted amount of money.  Let them sink or swim.  Sure, you may end up eating pasta without sauce one night, or peanut butter and jelly after the plan is a disaster, but it is about allowing them enough room to succeed or fail and then guiding them on how to make adjustments to make better choices.  Over time their skill in this area will grow and they will be well positioned for adulthood when they are responsible for their own food shopping and meal prep.

Yes, this is time consuming, but having kids is pretty time consuming as it is.  The lessons they will learn and the relationship you will develop are irreplaceable and invaluable.

 

Clothes Budgeting

 

Mom, I need new shoes.  Mom, my socks all have holes in them.  Mom, can I get a new pair of pants.  Yes the ones I have are fine, but this cool new style just came out and all the girls have a pair.

Most likely, your child had no concept of the cost of clothing.  S/he has needs — mom and dad meet those needs — problem solved.

That is fine when they are young, but as you look to the future when your teen is a 20-something, buying his own clothes, it becomes evident that a new cycle needs to be developed.

Here is an idea.  Determine how much you spend on your teens apparel each year — including shoes, socks, underwear, school clothes, play clothes, athletic clothes…all of it.

Now place that amount in the hand of your teen and say, “This is all of the money you will receive from us for your clothing needs this year.  When it runs out, we will not provide you with any more clothing money.  This is enough to cover all that you need, if you use it wisely.  We are here to offer council at any time, but barring inappropriate clothing that we don’t allow, we will not voice an opinion on what you buy unless you ask.”  Then discuss the way you have historically gone about buying their clothes – what stores you use.  Where deals can be found.  Answer any questions they have.  And then back off.

Does that terrify you?  “What if he blows it all on a leather jacket and has no money for clean socks?”

Three things may happen — he will discover the finite principle of money and learn a lesson, he will find a way to earn money to buy the items he needs and wants, or he will don his fancy new jacket and go sockless all year.

“But what will the other parents think of us?  They will say that we don’t take care of our kids and clothe them properly!”

Maybe.  Or maybe you will have an opportunity to discuss the lessons your teen is learning.

These are lessons needing to be learned at some point anyway.  You can risk your 16-year-old going sockless all year now, as you seek to teach these lessons, or risk your 24-year-old son going sockless because he never learned these lessons.

Now, there are ways to ease into this.  If it is all too terrifying to do it on a yearly basis, maybe break it down into 6-month or 4-month installments.  Half a year would allow summer attire and winter attire to be on separate “bills.”  Quarterly shortens the time span when your teen may serious wardrobe issues.  Make whatever adjustments you need to make in order for this to be palatable, but you will be doing your teen an immense favor if s/he learns how to budget for clothing now.

I have even heard of people taking that dollar figure and then taking out 10% so that the teen is actually under-budgeted based on past spending amount for the sole purpose of making him be even more conscience of how he is using that money.

Planes, Trains and Automobiles

Or just a plain ole car.  With few exceptions, most families have and use car(s) daily.  Most teens countdown the days until they can legally drive.  Who is footing the bill for their wheels?  He is an option that I heard from Dave Ramsey.  Create a matching fund.  For every dollar that junior saves towards a car, Mom and Dad will match that dollar.  So if he manages to save $3000 by the time he is in the market, Mom and Dad will add another $3000 and he will have $6000 to find a used car.  You may not be in a financial position to make that offer, but for those that are, it is a great incentive for them to save.