Ask a Therapist • Jennifer Smith Marriage & Family Therapist
Teens need to learn money management
For parents who are launching graduating high school seniors, two very important tasks are the teaching of emotional and financial independence. Of course, we cannot expect an 18-old to achieved either one of these immediately, but as parents, our job during these next few years is to move them in this direction. In my last article, emotional independence was addressed, and in this article I want to address financial independence.
Long before graduation, we should be teaching our children how to manage money. While some may disagree, I am not a believer in giving allowance for chores. Children should do chores in our home as a natural part of living in a family system. I am also not a believer in giving money for grades. Working hard and wanting to achieve good grades should be its own reward. As adults, no one pays us for doing household chores. We get paid a salary for a job, but a good work ethic should not solely be based on financial reward. Parents have a choice to offer a better way to use allowance, namely to teach children how to manage money. We can instruct them to spend some money, save some money, and give some money to a church or charity. This practice creates good money habits that can be beneficial throughout their lives.
So what should we do, in regards to money, when our children go away to college? First and foremost, we need to give them a budget. Let them know how much they are allowed each month for essentials or entertainment and do not exceed that amount. If you give them a credit card with this monthly limit, make sure they know how to track it by logging in online and monitoring their spending. If they exceed the limit, they owe you money with interest. We should also teach our children how to manage a checkbook and do bill-pay online.
As our children move out of dorms and into apartments, it is very important for them to have some type of job and to pay some of their bills. Sit down with your young adult, consider their income, and determine reasonably what they can afford to pay. Allow them to pay a portion of their rent and utilities so when they do get a full time job after college they will be in the practice of anticipating these bills. Pay for groceries or gas, but let them use their money for eating out or for gas for extra trips. Giving some responsibility with money practices skills which have the potential to create self-esteem and independence. If we do not pay for everything, we can teach our young adults the value of saving for special wants and the appreciation for how much things cost.
If we forfeit this maturing opportunity for our young adults, we delay the process of growing up. When our children are financially independent, they also become more emotionally independent, and everyone wins.
Printed in the June 14, 2012 edition