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Budgeting for Your Teenager
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| By the time your child reaches their teenage years, things have
changed. Rather than spending money on your teen, your teen will be
spending money on him or herself. Where this money comes from is a crucial
part of budgeting for, and with, your teenager. |
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| There are pros and cons, financially speaking, to having a teenaged
child. By this point, your child should have a good grasp on your family’s
financial situation and spending habits; your daughter shouldn’t be
expecting a new car for her 16th birthday if this is way beyond your
family’s means. This ability to comprehend family finances is one pro of
having a teenager; they understand the basic value of money, where it
comes from, what things generally cost, and should have long ago grown out
of their childhood ‘gimmie’ stage. If your teen is missing any of these
aspects of basic financial understanding, you need to start working on
them right away. |
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| While the capacity to understand family finances and the value of
money is a great skill that comes with entering your teenage years, the
maturity to really manage money and differentiate between ‘want’ and
‘need’ might still be lacking. This is why budgeting for a teenager is
more about teaching and less about you and your partner making a budget
and trying to cut costs (as it had been in previous years). As parents,
you will continue to be ultimately responsible for budgeting for your
children, but what has changed is that now you must get your teenager on
board with you in order to succeed. |
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How to implement a budget with your child
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| One great way of budgeting for your child is to budget with them.
First, you should sit down together and talk about what basics you will
cover, and what extras your teen will cover. You as a parent should have a
strong idea going into this discussion of how much and what you are going
to cover. Don’t let past events dictate the future – just because you have
always handed over gas money whenever your teenager asked before doesn’t
mean that is the rule. It is never too late to break a bad habit. |
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| Once you have determined what you will be covering, share your own
family budget with your teenager. This will give them some idea as to how
much money is coming in to the house, and what expenses and
responsibilities you have. Now, in turn, go over your teenager’s expenses
(these are the expenses that you have already decided that they will be
responsible for themselves). Clothing, transportation, special events at
school (field trips or end of year vacations), entertainment – these are
all expenses that you may have decided your teenager will cover
themselves, in whole or part. Now: outline how much you will be giving
your child every week for these expenses. |
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| Once they have a number in front of them, discuss some basic
budgeting. You may have decided that all clothing from now on will come
out of your teenager’s budget. If they want a new winter coat this year,
show them that may take a few months of planning and saving in order to be
a reality. They might then decide that last year’s winter coat will still
be fine, and would rather spend on smaller purchases, or have more left
over for entertainment- whatever they like. This should be a good basic
introduction to budgeting. |
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| One way to keep track of your child’s spending is to make it part of
the routine to ask how the money was spent over the last week before
giving out the coming week’s sum. This way, you can get a feel for how
your child is taking to budgeting, or if they might need some extra
assistance. This would also be a good time to remind your child about a
big purchase on the horizon – a prom dress or out-of town school trip, for
example. More importantly, if you suspect your child is misspending (on
alcohol or drugs, for example), your weekly check-ins should provide you
with some clues. If problems with spending are encountered, money can be
suspended and you can address the topic at hand. |
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| The great thing about this system is that it can evolve as your child
grows. A 13-year old probably has fewer expenses than a 17-year old, while
the 17 year old should at the same time be learning about financial
independence. Perhaps your child will get a part-time job, either to
supplement the money you are providing or to help save for university or
college. Your weekly payments might fluctuate over time depending on these
variables. And if your family financial situation changes (someone loses
their job, or a medical emergency calls for re-organization of funds) you
can sit down with your teenager and explain why the weekly budgeting
allowance will have to be cut back. These changes are a normal part of
growing up, and can serve as fantastic opportunities for your teenager to
learn financial responsibility. Good luck! |
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