Beating Broke

Personal Finance from the Broke Perspective

Why You Should Let Your Teen Make Money Mistakes

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Why You Should Let Your Teen Make Money Mistakes

As parents, we want to help our children avoid the mistakes we made.  This is especially true with money mistakes as they can set people back years from achieving their financial goals.  (Sad to say, but some adults never achieve their financial goals.)  However, there are several reasons why you should let your teen make money mistakes.

My Biggest Money Mistake

Teen Money Mistakes
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I made so many money mistakes when I was young!  Probably the costliest one was transferring to a university for the winter semester and choosing a dorm room.  I called my future dorm roommate just to say “hi”, and she was so rude and gruff!  Because I was shy and fearful about living with someone, I backed out of staying in the dorm, but I couldn’t get a refund on my money.  I paid for that dorm for four months, and I never lived there!!

My mom never said anything; she let me make my own choice, and that decision was certainly one I learned from.

Watching My Son Make Money Mistakes

My son is now 15, and while he used to be a great saver, over the last few years, he’s become a spendthrift.  If he has any money in his pocket, he will try to find a way to spend it, often on items he doesn’t even need.

I live in fear that he’ll move out, get a credit card, and rack up incredible debt, which will take years to pay off or cause him to file for bankruptcy.

Why You Should Let Your Teen Make Money Mistakes

As hard as it may be, as parents, sometimes the best thing we can do is step aside and let our teens live their lives as they inch closer to independence.

Better They Learn as Teens Rather Than Adults

Keep in mind, it’s better to let our teens make money mistakes now than as adults.  My son is trying to save for a school-sponsored trip to visit some college campuses.  However, he’s struggling with this goal because any time he makes some money, he feels compelled to spend it.

The worst-case scenario here is that he won’t be able to go on the trip.  As an adult living on his own, he’ll face much more serious consequences if he can’t save his money. The worst-case scenario may be that he doesn’t make rent and is evicted.  I’d much rather he miss the trip this year and be envious of those who did get to go.  Hopefully that will motivate him in the future to save for large goals.

Experience Is the Best Teacher

While our toddlers soaked up every word we said and thought we were the experts, our teens our cynical and eager to break free from parental control.  Simply put, they don’t like to listen to us.  Sometimes as parents the best we can do is not say anything and let natural consequences take their course.

Think back to your own teenage years.  Did you learn best from your parent lecturing you or the experience of making your own decisions and dealing with the consequences?

When your teen stumbles after a money mistake, don’t swoop in with an “I told you so!”  No one appreciates that.  Instead, be a sounding board and encourage them to make smarter decisions in the future.

Watching our teens make money mistakes isn’t easy, but as they crave more and more independence, letting them experience life, and fail sometimes, is exactly what they need.

Save on Groceries by Limiting Junk Food

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Almost all kids love to eat junk food, and if they have unlimited access to it, they can plow through a surprising amount of it in very little time.  This is especially true if your kids are teenagers.  However, you can save on groceries by limiting junk food.

limit junk food
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Some people do this by simply not buying junk food.  Instead, they give their kids regular meals and fruits or veggies for snacks.  While this is the healthiest way to feed your kids, they may feel deprived if they don’t get some of the fun snacks that their peers get.

However, there are several strategies you can use to give your kids the snacks that they want without compromising their health or your grocery budget.

Will Work for Snacks

Recently, I learned this ingenious trick from an experienced mom.  She has created a win-win situation for herself and her kids.  Each time a child completes a chore, he earns a ticket.  He can then use the ticket to buy snacks from mom that he enjoys such as granola bars, chips, cookies, Popsicles, etc.  Once he runs out of tickets for the week, he doesn’t get these types of snacks anymore.  Instead mom will give him fruit or veggies for snacks, no tickets required.

Save on Groceries by Limiting Junk Food

Using this technique, the kids are happy because they have some control over how many snacks they get, and mom has noticed that the snacks are lasting a lot longer in her house.

No More When They’re Gone

Another mom buys a set amount of junk food treats a week for her family to eat.  When they’re gone, she doesn’t buy anymore until the next grocery shopping trip.  If kids eat all the treats in one day, they have to wait six more days until the next grocery trip.

Lock Up Junk Food

Some parents have even taken the extreme route of locking up treats so that the kids don’t eat all of the stash.  This is more likely to work if your kids are younger and are used to this type of system.

Hide Them Away

A similar, though less extreme, practice is when parents hide away goodies.  Then, they can slowly bring them out so the kids get treats little by little.  This was the technique that my mom used.  She had a friend who worked at Hostess, and she could get us treats at a steep discount.  My mom would buy two cases and hide them, bringing them out slowly for lunches.  For many kids, out of sight means out of mind.

Make Homemade Treats

Another idea is to make homemade treats like granola bars, brownies, cookies, etc.  While these taste good and are often healthier than the pre-made counterparts, kids may still feel slighted if all of their friends are eating packaged junk food.  A way to avoid this is to give them some prepackaged junk food and supplement with homemade treats.

There’s nothing wrong with giving your kids a little junk food, but if they’re devouring it the minute you bring it home, you may want to save on groceries by limiting junk food consumption in your home.

Is junk food killing your grocery budget?  If so, which of these strategies do you use, or do you have a different technique to keep your kids happy and your budget in line?

Teach Your Child About Finances With This Book

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As a mom and personal finance blogger, I get the opportunity to review many books.  One that I just reviewed that I can’t recommend highly enough is Sunny Lee’s book, Is Your Child a Money Master or a Money Monster?

Money Master or Money Monster?

Sunny Lee is a financial advisor, and she has taken the time to teach her twin sons about money.  In fact, her strategy has worked so well that she’s sharing all her techniques in this book.

Lee has a variety of strategies for teaching kids about money in a fun, incentive-filled way.

Offer rewards.  Lee’s strategy of offering her children rewards helps shape their behavior in a positive direction.  For instance, when her sons were in 1st grade, Lee developed the Morning Stuff Allowance Project.  Each morning, her kids had to get up when their alarms went off, tidy their rooms, get dressed, pack their backpacks, and make and eat their own breakfast and get to school on time.  If they did this every day, they earned $3 a week.

While the kids were motivated by the money, they were also unknowingly developing skills that would help them through the rest of their lives.  Even better, Lee didn’t have to fight with her boys in the morning to get up and get their chores done.  Everyone in her household could enjoy a more peaceful morning.

Play games.  As the boys got older, part of Lee’s strategy to teach them about money was to give them a safe place to experiment.  She did this by finding a variety of free, money based games online.  Her boys experimented online with running a coffee shop.  They had to decide when to discount their coffee based on the season, how much inventory to buy, etc.

Try out your skills in the real world.  Finally, Lee let her sons experiment and try their money skills in the real world.  An important component of this was to let them fail in small ways.  One son spent a large sum of money on a hat, which he loved, but then he didn’t have money available for a while after that.  Her other son learned from his brother and bought a hat at a discounted market so he wouldn’t use all of his money on one item.

Lee’s book contains seven strategies to teach your kids about money (and as a byproduct, teach them personal responsibility).  One thing I loved about the book and her strategy is that she keeps adding layers to her plan.  For instance, after her kids mastered the Morning Stuff Allowance Project, that remained in place, but Lee added on the Special Incentive Project.  If her boys chose to, they could earn additional money throughout the week by completing a book report, doing an art project, etc.  Again, she helped her children grow academically and artistically through an incentive.

I highly recommend this book to anyone looking to not only give their children a strong financial footing, but also a strong work ethic.

Have you read this book?  What is your favorite book to teach kids about money?