Questions for moms of teens that earn moolah

[Jen in NY]

Pretend you are me and your daughter makes $20 every time she goes babysitting, and she sometimes babysits more than once a week. Would you collect her pay upon her return home to make sure it ends up in the bank? (My thought being it's much easier to decide when and if to spend your money in a rational manner if it's in the bank and you actually have to go and take it out...) Would you let her be completely in charge of it and not even ask how much money she has holed up in her room? Or somewhere in between?

 

What do you say, hive mind?

Jen in NY

[Jan P.]

My ds has a job at the local college. He gets a pay check about twice per month. I have never asked to hold onto his money. I took him to the bank and signed him up for a checking account. He needed one for paying fees at college anyway. He was told that he was responsible for paying for his gas, lunches, and any other "fun" type spending. He has been pretty good with his money. Sometimes he blows it on concert tickets, but he has learned to go without "fun" stuff until he gets paid again.

 

I would let your dd be in charge of her money. However, you might tell her that she has to use it towards eating out, movies, etc. Then if she comes to you wanting some money then you can tell her that you can't just hand it over. She needs to learn to be disciplined with her own money. The teen years while living at home is the best time to learn how to be disciplined with it. YOu could make recommendations for budgeting though.

 

FWIW,

Jan P.

[Anna]

It would depend. Since you're posting on the high school board, am I correct in assuming that your ds is in high school? I don't know about your financial situation for college but ours was such that any money made was and still is earmarked for college. Currently, both my girls are working part-time because they pay for all or some college tuition and they both purchase their own college books. (We are too wealthy :sarcasm: to receive academic grants.)

:smash: :angry: :mad: :rant: :thumbdown::cursing::banghead:

 

Dd#2 is beginning CC full-time in the fall. All her earnings to date, since Dec 2007, have been going in her savings acc't. I don't collect it but I have been taking her to the bank every 1-2 weeks so she can put her earnings in her acc't. She's not overly happy about that but she sort of "gets it". I tell her, "This is life!" Eventually, she will fully understand the importance of saving this money but save it, she must. Without her savings, she would not be able to attend CC because she has no scholarships and no student loans. She's been paying all her tuition and buying all her books.

 

Dd#1 already understands this concept. She's on a 3/4's academic scholarship and still has to make monthly payments to the college for her 1/4 portion.... and she pays for her own books. She's starting her second year of college in the fall so she's been banking her earnings for over a year now.

 

Both girls keep a small amount of their earnings for spending money but it is a very small amount. Does the term "poor college students" ring a bell? It fits our girls well.

[Jen in NY]

a rising 8th grader. I posted here because I figured there would be a larger percentage of parents with kids earning money.

 

Thanks for your advice! I think we're going to have poor college kids, too!

 

Jen

[Liza Q]

Pretend you are me and your daughter makes $20 every time she goes babysitting, and she sometimes babysits more than once a week. Would you collect her pay upon her return home to make sure it ends up in the bank? (My thought being it's much easier to decide when and if to spend your money in a rational manner if it's in the bank and you actually have to go and take it out...) Would you let her be completely in charge of it and not even ask how much money she has holed up in her room? Or somewhere in between?

 

What do you say, hive mind?

Jen in NY

 

No - I don't collect their babysitting pay (or allowance). They are completely in charge of it and I do not know how much they have holed up in their room ;)

 

We encourage them to tithe and save. From time to time one or the other will give my husband some money and ask him to deposit it in their bank account. And I generally know how much they have because they are usually saving for something - some books or CDs or extra/special accessory/stuff. This comes up in conversation - how much is X, where can they get it for the best price, how long will it take them to save for it, etc., so I do get the big picture.

 

Hth!

 

ETA: We should probably make them save more.....reading some of these responses are making me think that I need to discuss this with my husband.

[Cindy in WA]

As my husband says, "This is the time of life to learn to make financial decisions, good or bad. Better to have regrets over a purchase now, than when it's a car or a house."

 

Sometimes this is very difficult for me. Sometimes they make very unwise choices in my opinion. But they are learning from their mistakes and learning to seek advice.

 

HTH

Cindy

[Vicki]

All were children were allowed to keep their money from jobs as teens. They didn't get their drivers license until they had a job and could pay for their part of the insurance. I know they wasted some of it, but that's part of life. You have to learn to spend your money wisely. My 26 yr. old ds and 22 yr. old dd did great. My 19 yr. old ds is still learning. I will say he pays his bills (cell phone, insurance, etc.) on time or early. He wastes a lot of money on fast food, in my opinion. My youngest dd is 16 and uses her money on things she needs like new clothes and make-up.

God bless,

Vicki

[NancyL]

Other issues that I might consider

1. If money is in her room then it could be a problem if she has a friend over and then money isn't accounted for. (my daughter was over at a friends and the PARENTS had an envelope of money ($500) for the son to go on a trip--and had misplaced it) (my daughter was visiting the d. and the trip wasn't mentioned so she wasn't aware about the $) After tearing the house apart later that night they called us to inquire about the money. It was a very bad scene for my d. to feel that she was under suspicion. (she was in bed when they called but overheard the phone conversation and got up-crying, etc) I didn't know what to think, --but this was a good lesson for everyone. We moved, and the kids were separated after that. (I think money eventually turned up but that's a phone call you don't forget) It's really not a good idea to have too much cash on hand anyway.

 

2. If possible-have them start a 401 K so the money can grow tax free. For a savings account--we match her income as we are able and then that money will be held until she retires. You can put a certain amount in every year and if you miss a year, you can't make it up. No reason not to start now. You have to document you earned it somehow. Then the money will be saved as you aren't supposed to take it out before you retire. (I should mention that she got a full ride for college and for us it was a way to put her college money someplace safe) We felt this was a fair thing since her scholarship at an academy is valued at more than $300 K. (includes health care, travel, salary, and paycheck, etc) She has to work for it, so we are helping her in a different way.

[hsmamainva]

My oldest dd has a steady job during the school year, working at the church nursery. She puts those paychecks directly into the bank (usually it's around $100 a week - sometimes more, sometimes less, depending on how many activities are going on at the time).

 

If she earns any money babysitting 'on the side' (friends, relatives, etc.) then she spends that money on 'fun stuff'. Usually, this is only a few times a month...so it might end up being no more than $60 or $70 a month.

 

And this is of her own accord. She's trying to save money for college. We've told her that we'll pay for her tuition and room and board (and her grandmother has offered to pay for all of her books and supplies) but she is providing her own entertainment money. If she wants so much as a slice of pizza off campus, she's paying for it herself -- so that's motivated her to put away as much as she can now, while she's living at home.

[ilovebooks2]

Hello!

 

My dd is going to be a sophomore this year and she has been working at a friend's restaurant for two years. When she started the job we had a talk with her about the money she would earn. Since she was going to be getting a paycheck and tips, we all decided that she would deposit her checks into the bank and she could keep her tips minus her tithes. She uses the money to buy what ever she wants (as long as it is approved by us). You know, we told her she couldn't buy skimpy tops just because it was her money but if she wanted to get clothes they would still have to be appropriate. She can also get money from her account at anytime and spend it on whatever she wants--usually if we are out somewhere and she wants new headphones for example, and she doesn't have any money, she will say, "mom will you buy these for me and transfer the money over from my account to yours". We have her account and our account at the same bank so I just do this online.

 

It has really worked out for all of us. She hardly spends any of the bank money at all. She knows that in order to get a car, she will have to buy one and pay for insurance so that is what she is saving up for. Allowing her to have the tip money gives her spending money and makes saving the checks worth it to her because she still can buy gum or hair things and still save money for her car.

 

I find that if she wants something I am unwilling to buy (something I consider she doesn't really need or something I don't have the money to buy) if she bugs me about it, then I just say, "are you willing to spend your own money?" 9 times out of 10 she will decide she didn't really need the thing after all! She realizes working so many hours for the trinket isn't really worth it at all.

 

What I also thinks makes this work is that from the outset we had a family discussion before she made any money. We listened to what she had to say, and she listened to us and we came to an agreement we all felt good about.

 

Candice

[Jill- OK]

Would you collect her pay upon her return home to make sure it ends up in the bank? Would you let her be completely in charge of it and not even ask how much money she has holed up in her room? Or somewhere in between?

 

I don't feel good about either compelling my kids to do certain things with money they've taken the initiative to earn, or just letting them go without any discussion/teaching about it.

 

We've talked with our kids about budgeting money, they know what we do, and why we do it. They're both eager to go to college, buy cars, etc., etc., when the time comes, and know that managing their money is the way they'll get there. (They also know what we believe about giving to the church, and agree, and want to do the same thing).

 

Once they agree that our ideas are good (wink), then we talk about particulars, and they come up with percentages that they commit to, for savings (bank), expenditures (long term) and charity. I suggested envelopes, and they keep them in their closet (obviously, when it gets to a certain point, it's taken to the bank).

 

And I believe in talking about this with them, and guiding choices from the get-go, almost. Whether that's a dollar earned from weeding the flower beds, or $20.00 earned from babysitting. I believe almost as strongly that if it's (mostly) their idea, it'll have a good chance of sticking, through adulthood. (I'm sure that there's benefit in requiring it, too...I just feel more comfortable making it optional, and heavily suggesting it/encouraging it.)

[Colleen]

I'm coming at it from a different perspective than those who have already replied. My oldest is the same age as your daughter. I get the impression from some of the responses that people are referring to teens who are at least several years older. I think there's a significant difference between a 16 year old and 13 year old in the sense that the older child will likely have many additional expenses.

 

We own a farm and beginning already at a young age (7 or so), our boys receive some pay for the work they do here. I'm talking about contributing in an independent, meaningful way; they aren't paid merely to be helpers. They don't receive a boatload of money; they're paid half their age as an hourly wage (e.g. 10 year old earns $5/hour), but it adds up. So from early on, they receive some income (not an allowance) and because they're young, we do oversee their finances. This is the way it works here:

 

Once a month we have pay day. They add up their hours and we tally their earnings. They tithe 10% at our suggestion. They get roughly 20% for petty cash/spending. The rest goes in long-term savings ~ and I mean long-term. They each have a cash box for their money and know not to carry around a lot of cash in a wallet on a regular basis. When they have several hundred dollars in savings, they deposit it in their CD accounts at the bank.

 

Our oldest son turned 13 this month and naturally, as he matures he'll have more expenses. We'll pay for the basics in life, but if he wants a particularly pricey item of clothing, or to spend more money on entertainment (not really an issue here yet), he'll be paying for that. As he gets older, he'll be earning more money here and will also have increased expenses (gas and insurance if he drives, for example). At that point, it'll be up to him how much he saves versus how much he spends. Since we've established this foundation, though, I very much doubt that any of our boys will simply spend and spend. They know that their long-term savings is a real asset.

 

So yes, I believe a 13 year old does benefit from guidance as far as personal finances are concerned. You'll hear people say, "It's their money and they have to learn how to handle it." Well, how do they learn? As with all things, we guide them.

[Quiver0f10]

AT that age, I would encourage her to tithe ( if you believe that way) and set aside X amount for savings and the rest is hers. But I wouldn't force it as I believe if she is old enough to earn the $, she should be allowed to use it her way ( within reason lol).

[Maura in NY]

Love Squeezeboxer in your avatar!

 

Here's what I would do: Help her open a bank account at the conveniently located small town office and get a debit card. She gets to control it, but she learns about banking now, on a safe small scale.

 

Peace!!

Maura

[Lisa in TN]

As each of my dc entered high school, I helped them set up a checking account at a local bank. They took responsibility for managing their money, and they started making their own purchasing decisions about clothes, toiletries, entertainment, etc.

 

It was wonderful to no longer have to tell them I wouldn't buy Item X because it was too expensive / too ugly / likely to get broken. Now, if they wanted Item X, they could spend their own money on it and suffer the consequences.

[Kelli in TN]

We have never done this. Our kids all started working at 15 and it was up to them how they managed their money.

[Kathie in VA]

My oldest dc is also a rising 8th grader. She makes ~$20 a day whenever she watches the neighbor's dogs for them. (What an easy way to make some money! ) Anyway we have her tithe about 10% of it to our church and then she can do with the rest as she pleases.

 

For awhile she kept it in an envelope, but it got to be too much. A few hundred dollars lying around started to get scary. So I finally got her a savings account of her own.

 

She has saved enough $$ to purchase an ipod but dh decided to help her and pay 1/2 of it for Christmas. That was 2 years ago. This past Christmas she paid 1/2 for a new Dell laptop computer. She still had money in the bank so she decided to get her dad an ipod nano for his birthday, all with her own money. Oh, and she just went and bought herself a digital camera.. pink of course!

 

Now I just need to remain, um not jealous!

[oakmom]

We encourage our children to save their money in a bank account for college expenses and we match their money if they choose to do so, in effect their money is doubled.

 

The decision is left up to them, but we do discuss the advantages of saving money often.

[Julie in CA]

Our 5 kids all work to varying degrees. They have farm work for which they don't get formal payment, but my dh occasionally drops them $100 or so. The oldest one babysits, the next oldest operates heavy equipment for a trucking company, the 14yo doesn't earn much, the 12yo babysits for relatives, and the 10yo doesn't earn much yet.

 

We decided in the beginning that it would be a good idea to set a routine for dealing with money. The kids give 10% to the church, and they are truly delighted to do so. We've set the example for that, and they really like having their own money to put in the plate. Another 10-20% is money that they can "blow" or save, whichever they prefer, and the rest goes into their savings account at the bank.

 

Our oldest son has a car (a $1000 car that he bought himself), and now when he earns money he's welcome to take a portion of what he'd ordinarily put in savings and put it towards fixing/maintaining his car.

 

So far, so good. They all seem to have a relatively healthy attitude regarding money, and find joy in all of the various components involved: giving, saving, and using the rest wisely while still having a bit of fun.

[Jen in NY]

Oh, Cindy ... this would be difficult for me, too. Parenting a newly minted teen has brought out the control freak in me I never knew was there!

[Jen in NY]

Once a month we have pay day. They add up their hours and we tally their earnings. They tithe 10% at our suggestion. They get roughly 20% for petty cash/spending. The rest goes in long-term savings ~ and I mean long-term. When they have several hundred dollars in savings, they deposit it in their CD accounts at the bank.

 

So yes, I believe a 13 year old does benefit from guidance as far as personal finances are concerned. You'll hear people say, "It's their money and they have to learn how to handle it." Well, how do they learn? As with all things, we guide them.

 

There's absolutely no way she could disagree with me on this, right?:001_unsure:

 

But this is definitely how I'm leaning today. I almost wish the paycheck came from me so that we could have set down some guidelines such as this before she had the money "holed up in her room- lol," but I think we can at least encourage her strongly to save enough to open some CD's, and remind her that she will want some big ticket items in the future. Luckily, she's not the kind of kid that keeps a running list of expensive clothes, bags, shoes (name your poison) to buy, so the money's not yet burning a hole in her pocket. It might be soon enough to talk it over with her and she will come to the right (read:my) conclusion herself!

 

Thanks for this post - I'm going to show it to my daughter.

~Jen

[Jen in NY]

Thanks!

28.....

[Jen in NY]

Ack, Nancy! How awkward.

 

I was just saying to dd last night that if it somehow is lost, stolen, or burned up in a house fire...there's no getting it back!

[Jean in Wisc]

We tape checks onto the window of the kitchen door (it's an inside door). When we are going to the bank, we negotiate how much they "need" for cash. Usually nothing.

 

If they have cash, we have a cupboard where they have an envelope for their money. When the money gets to be a larger amount, we take it to the bank.

 

My kids get plenty of grandma-cash for b-days and Christmas. They use that for their spending money.

 

The older they get, however, the more independent they become. I don't monitor my 19yo's money at all, but we do put her money in the bank when she asks us to. My 18yo is pretty much on his own, too--he'll be a senior next year, so he's still very much under my roof; he still puts each paycheck on the door.

 

My 15yo is pretty tight with his money (all of my kids have been O.K. with this, though), so I don't worry that he is "spending it all", but his money from mowing his uncle's yard gets put into the bank each month.

[SheWhoWaits]

My 8th grader has had a paper route for 3 years now. He has to pay his own social security (ca. 300 per year) because they don't take anything out of his check. He also has to pay me for the gas to drive him, since the route is about 15 miles from our home. After he saves for taxes and pays his expenses, he is required to put 10% in the offering at church and 10% into a long term savings account. I let him do whatever he wants with the rest. I'd like to keep better track of what he does with it, but we have kind of a touchy relationship right now, so I don't push it. Oh, I should say that when I said I let him spend it on whatever he wants, that's not to be taken literally. He's not allowed to buy things we don't want him to have, like a video game system or R-rated movies, for example.

[Lori D.]

Money Matters for Teens (ages 11-14) by Larry Burkett

 

Just went through this together this year with our teen boys. It's from a Christian point of view, and is quite conservative re: borrowing money -- but that's because the author counsels so many people in financial difficulties due to credit card debt. The book lays out some very helpful and very practical guidelines about earning, spending and borrowing money. Hoping that having good information can be a real help in making good decisions for our teens. : ) Warmest regards, Lori D.

 

You can see the table of contents and a number of sample pages here:

http://www.christianbook.com/Christian/Books/product?item_no=63452&netp_id=131845&event=ESRCN&item_code=WW&view=covers

[Gwen in VA]

We use a formula for earned money --

 

10% -- tithe

40% -- personal spending (usually goes to bank and ends up "saved" -- but can be used for personal things like CD's, KITES, kite supplies, music, etc.)

50% -- saving for college. Non-negotiable.

 

Gift money is tithed but otherwise is their personal money.

 

My dd2 (12) has had a job that pays about $12 per week for over a year. The pay will increase significantly over the next year or two. The paycheck goes straight to the bank, so we created a special spreadsheet to deal with the question of how much money in the bank is hers, how much should go to God, and how much is in "real" savings.

[Farmgirl70]

We don't manage the kids money, but for years now they have kept very simple budget sheets that show where they are spending their money. We've talked about planning, we've showed them our budget. We've also talked about the homeschool budget. In our homeschool budget, we include money for classes, lessons and summer camps. They understand that we need to watch how we spend this very carefully. So, as they have gotten older, if they want to go to a camp or an extra class, they often help to save for it. This year, the older two (age 14 and 13) are paying 75% of the costs of their summer camps. They also buy their own clothing (we give them a limited amount to manage. If they want more, they use their own money). So, they have a lot of freedom in managing their money, but also some responsibility. It is working well for us right now. They have saved for some large ticket items, they are learning to weigh whether they want an item THAT bad, and they feel proud of contributing to their activities.

 

They are making money doing babysitting and pet care right now. I imagine that if their income increases, so will their responsibilities.

[JFSinIL]

My 14-yr-old just came home with $50 for two full days babysitting. She has her own money...but also knows that if she wants to go to Spain in three years (part of her language program is three weeks based in Granada) she has to save at least half the money herself.

 

This is my least-saving kid - she may well blow it and not save anything. BUT, I'd rather she experience the consequences NOW than when she is out facing "real" bills/rent etc. and not merely missing out on a trip to Spain.

 

JFS the MEAN mom.

[Melissa in Australia]

my children are all savers, we taught them all to save when they were little. My husband and I are savers as well.

all the money the children earn is theirs to do whatever they like with. they earned it. they keep it. I have found the fastest way for them to learn the true value of money is to work really hard to get the money, and then spend it on something they really wanted, and then they realize that all that time spent on earning the money and now it is gone.

this has worked here..

my children mostly hoard their money in their rooms. My 14ds explained to the younger ones how banks work. loaning out their money to other people, and not giving much interest in return. I haven't been able to convince him that it would be a good idea to put it in the bank, and the rest follow his lead. ( they all have bank accounts)

[gardenschooler]

Mine have been babysitting/dog walking from about the age of 12/13 (and earlier as a mother's helper), so they've earned quite a bit of money by now.

 

Dd13 has a bank account with several hundred dollars in it. Dd16 has an extensive wardrobe - but she is starting to think long-term. I don't monitor their money at all, but there are certain things (that I would consider 'luxuries') that they have to pay for.

[sarah in tenn]

Well, my son has made quite a bit of money say $2,000 over the year ,and he is 15.

I make him put it in the bank, and allow him a percentage out for personal things. He was able to pay for his trip to Philmont Scout Ranch in New Mexico with his troop all by himself. Then , he understood why I helped him control his spending.

sarah