Your money rules in the house and for your teens will set their template for decades to come. That is, if you have a backbone, you mean it, and enforce it. That’s even more critical when parents are separated or there are grandparents with money around.
When you have rules for money, there’s no confusion because the rule is set. If you rob a bank, you’re going to jail. That the societal deal. It’s not confusing, it’s not a sometimes thing, and it’s pretty black and white and everybody knows it and abides by it – there’s no confusion.
With your teens, especially girls, there needs to be a clothing budget. You set the number and that’s it. It’s YOUR money. $100 a month, every two months, or whatever you pick. If you kid wants to bargain shop, that could buy four, five, or six things. If they want to impulse shop or buy the latest and coolest, the money will be gone in 30 seconds.
You need to remember that the best sales people in the country aren’t born. They learn at home manipulating their parents! Every teen has a wish list of 50 things they absolutely have to have. If it’s your credit card, why not. If you give them a $100 Visa gift card, watch how magically 45 of these things aren’t important anymore – because it’s their money and it’s a fixed amount! Try it – you’ll be amazed how their thinking and priorities totally change.
When it’s an expensive purchase, give them the option of buying it right now, with their money, or waiting until Christmas. You’ll see that waiting will become a lot easier if those are the only two options. Plus, if they’ve paid for it themselves, they’ll be a lot more careful with it and it’ll probably double the lifespan before it’s wrecked or lost. Last year a lady from Penticton emailed me that her son had busted his phone screen for the third time. She was asking what to do? Well, she’s paid it three times – so keep paying…If the money rule is that she buys the phone and he pays for downloads and fixes, watch how careful he’ll be with it. If not, that $100 fix will just happen once…with his money.
Even if you can afford to buy everything your kid wants, you’re destroying their financial future if you do! In their 20s and 30s, they won’t be able to afford that lifestyle with their own money. That leaves two choices for this generation: Get it with borrowed money or you keep sending them a cheque. Because the third option of radically changing their lifestyle is almost impossible if you’ve set the template for over a decade at home.
Set the limit, set the rules, communicate them clearly and stick with them. The real gift you can give your kids or grandkids is not this one purchase or another. It’s the lifetime gift of teaching them how to handle money, budgeting and priorities.