Teens and Money

Martin Hurlburt

Your story is wanted for my new book

“The Advice Collection for Parents:

77 Tips About Money, Life and Succes

How do you teach your children about money, life and success in an age appropriate way? What is the best lesson your parents taught you?

Read sample stories or submit one of your own at www.TheAdviceCollection.com.

Together we can change a generation, one story at a time. Please tell other parents about the site!

Tip 1

More work equals more money.

When I was a teenager, my step dad put a chart on the wall. On it he had broken down all the household chores and attached a dollar value to each one. Whoever did the chore, put their initials by it and at the end of the week he tallied up our “payday.” My youngest sister, for the first time in her life, discovered the joy of housework and the joy of earning her own money. She regularly out-performed her two older sisters and always got the biggest payday.  Submitted by Toni Graybill

It’s your money. It’s your future. TAKE CHARGE!

Martin Hurlburt is a speaker, author and financial advisor. He is writing a new book to help parents teach their kids important lessons about money, life and success. To read sample stories or submit one of your own, visit www.TheAdviceCollection.com. The best submission will win $150! Together, we can change a generation, one story at a time. Please tell other parents about the site!

Tip 2

The Clothing Budget

Age 12 for girls is a magical age.  It’s the age when they discover “The Mall.”  This was especially challenging in my house. My husband and I were married in the spring of 2007.  We have a blended family of three girls ages 11, 12, and 13.   We have noticed that all three girls want to spend all of their extra time at “The Mall,” which must seem like heaven to them.  I remember being mesmerized by the vastness of the shopping mall in southern California when I was 12.

When school released for the summer in late May, 2007, our oldest daughter came to me and asked me when I was taking her summer clothes shopping at the mall?  She insisted that this activity needed to happen immediately because her best friend’s mother had just bought her over $300 worth of summer clothes.  My daughter desperately indicated to me that she had no shorts to wear.

I went to my husband with this dilemma.    What should we do as a newly married couple with three girls frequently asking for new clothes each season?   After discussing the problem at length, we decided to go to Wal-Mart and price what it would take to clothe a teenage daughter for an entire year, including shoes, socks, undergarments, coats, etc.   A year’s worth of clothing added up to almost $600.   This figure seemed reasonable and logical.  So, we came up with the plan:  The Clothing Budget. 

Beginning June 1 and December 26, each person in our family is allocated $300 to spend on clothes, shoes, coats, etc.   Therefore, in a given year, each person, including parents, have $600 to spend on clothes.  Each time clothes are purchased the receipt is recorded in an excel spreadsheet to keep track of who spent clothing budget money, which store, and the amount.  Each month family members are alerted to how much they have spent so far and how much is remaining.    As an incentive to budget soundly, if someone does not spend all of their money by November 1 or May 1 (one month before the period ends), that person receives the remaining balance in cash.   

Basic rules include:

• Parents have the right to veto any purchase they deem extravagant.
• Purchases can be made at any store or on the internet so long as the budget does not exceed $300 for each 6-month period.
• If a child runs out of clothing budget money before the end of the period and needs clothes, then the parents will take control of the child’s clothing budget for the next period and all purchases will be made at Wal-Mart.
• Jewelry, hats, purses, and accessories are not part of the clothing budget.  Those purchases must be made from the child’s personal money.

Advantages:

• Children have control of their clothing budget money and experience first-hand how purchases quickly add-up.
• Children learn to budget the monies allocated to them.
• Family members shop year-round, not just at the beginning of season, school year, birthday, or Christmas.
• Incentives are given to spend wisely.    Any excess monies are given to the family member in cash 1-month before the period ends.
• Parents must adhere to the same program as the children.  Children perceive that all family members are treated equally.
• Encourages wise spending of finite resources.

Amazingly, our oldest daughter never did buy herself any shorts or summer clothes the first summer we started “The Clothing Budget.”  Our children now shop wisely, purchase items on sale, have more clothes than they need, and always have fun every time they go to the mall.  Two years later, 2009, the clothing budget is a big success in our family; no one wants it changed.  Best of all, there is no quarreling about new clothes — when to buy them and how much to spend. Submitted by Carey Sue White