Does your teenager’s allowance seem to disappear the moment he gets it? Is he always running out of cash and asking for advances on his allowance? Are you concerned about that will happen when he begins working and is receiving a regular income? You can help your teen get the most out of the money he has by teaching him ways to manage it better. Got ten dollars mum?

Explain impulse buying to him and help him become aware of the spending choices he is making. He should be asking himself several questions when he feels the urge to make a purchase. The most important question to ask should be ‘do I really need to buy this?’ Necessities come first before the fun stuff. He should also ask himself if the price is fair, if there is a time of year when this item might be offered at a lower price, and if there is a lower-priced item of comparable value that might do instead.

If a teen’s funds are depleted quickly, he will never be able to buy anything more expensive than the total of that week’s allowance. He might want to buy something more costly one day, and he will never have the money to do so unless he learns to save. Putting money aside requires that he override his impulse to spend. He must develop self-discipline. He will realize the value of the money he’s put aside and might even come to the conclusion that the article he originally wanted to buy wasn’t all that important, or wasn’t worth the value of the money he’d saved.

Teach your teenager how to manage a checking account and how to use debit cards and credit cards, but emphasize that when these are used, it’s very difficult to have a perception of the money being spent. Encourage him to use cash for most of his purchases so that he will get a better feel for the money that is coming and going. If he keeps a small notebook of expenditures, he will be able to review his spending choices and make revisions in them.

If your teenager gets a job, make it a requirement that he start a savings account. Be clear about the purpose of this account, and what he can and cannot use the money for in the future. Some teens save for college or an automobile. Agree on this before the account is opened so there will be no tussle later when he wants to withdraw money for something more frivolous.

by Rachel Goodchild

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