Money, Money, Money

Sherri Grosz

It’s a struggle many parents face – how can they teach their children to manage money responsibly? Is it too late if they are in their teens or twenties? Is there still time? The best time to begin teaching children about money is when they are young. Giving children an allowance is a great way to teach saving, spending and sharing habits that can last a lifetime.

For teens, it can be more challenging. There isn’t as much time left and the amounts of money involved are larger. Allowances aren’t simply play money, there should be expectations attached to them. Perhaps the parents provide lunch but if the teen wants to purchase lunch, they pay for it. Parents may pay part of the fees for lessons or sports but the teens could pickup the rest of the tab. By the time teens are finishing high school, they could reasonably be expected to be handling the money for most of their own expenses, through allowances and earnings.

It seems like a very expensive proposition for parents to hand large sums of money to their kids. In reality, its money you would have given them; you are simply letting them learn to manage money. Add up what you might reasonably spend for over a period of time and give them that amount. It’s important that you give clear expectations of what the money is to cover. Clothes? School trips? Car Insurance? Music lessons? Sports fees? What are the choices that are not permitted? While you may permit your teen to purchase their own clothes, you retain the last right of refusal on their choices. So if they come home with something inappropriate, you might let them deal with the loss of the item. Clear expectations are critical!

Parents fear that their teens will make poor choices and have no money to pay for more important things. That can, and possibly will happen. If your teen blew money on a concert and can’t pay for car insurance or fees for sports, or can’t buy new shoes, it will be a hard lesson and a tough few months for both you and your teen. But learning that lesson now, while the stakes are low, is better than learning it later when they can’t pay something more serious such as rent, a student loan, or the hydro bill.

We would never hand our teens the keys to our car and tell them to be careful while they learn to drive. They need driver training and experience gained with their parents at their side. Money management is much the same. The results of not learning can be disastrous and long-lasting; they may struggle to pay bills or even declare bankruptcy as a result of poor choices. Teaching your children and teens to handle money is one of the best gifts they can be given. If you have questions or would like some further information or resource suggestions, contact your local MFC Consultant. We’d love to help!