Teach Your Teen Proper Money Management Skills

To begin with, when teaching anything to your child, no matter what age they are, you can not have a 'do as I say, not as I do' method. Therefore, you must set a strong positive example of what you are trying to teach. Yes, you- the parent- are a role model. (This means you cook healthy, home made meals instead of eating take out every night!)

Also, when your child gets older you can show them the bills. If your child has a wasteful way about them, usually this will change when they see how much things actually cost! By showing them the phone bill or the electric bill, you are placing a dollar value on those things they take for granted. If they still have an "I don't care" attitude, then you tell them it's time they start chipping in! Obviously you really don't want your 15 year old to start helping out with the bills, but the message works. (Bear in mind if your child is 18 or older and still living wastefully in your home, it's a different scenario altogether.)

Your teen knows about money, almost. They know that they would rather have $50 than $20 but not as much as they would like $100. When your child is a teen, they should have a much clearer understanding of the value of money. So let's cover allowance, because this is usually the teen's income.

First of all, nothing should be free. Your teen needs to earn their allowance, and should never have money 'just because'.

Similarly, your teen should not get paid for good grades. Good grades should be achieved 'just because' and you shouldn't be bribing your teen to get good grades. However, good grades can be rewarded financially, i.e. a 'pay raise'.

Now here is an example of a good allowance chart:

Do the dishes every day for a week - $5
Do your own laundry (washed, dried, folded and put away neatly) all month - $15
Keep your room clean all month - $10
Clean the bathroom (floor, toilet, tub/shower, sink, etc.) - $5 (nobody likes cleaning toilets)

Obviously you can put in more work here but there are three points to consider:
First, you are not paying for chores that are already expected, you are offering 'jobs'.
Second, rather than a set '$20 a week' or so allowance, your child can decide how much work they want to do, i.e. how much money they earn.
Lastly, the pay rates may seem smaller than you would have come up with but there's a reason for that. How do you feel every pay day? After all the work you've done, there is barely anything left for you to enjoy. You worked so hard, so long... for so little!

Maybe you have a better job than most of us and you don't get that overwhelming disappointment every pay day. Your teen will. The value of money, as your child will learn, is very high. It's better to learn this as soon as possible, because it only gets worse. As mentioned earlier, good grades can be rewarded with pay raises. (Adding 25 cents to the income earned from dishes, for example...) Feel free to ad lib as much as you feel suitable, without breaking the major points in this method.

Here, again, are the factors with this method that make all the difference...

Chores are decided on a free will basis. Your teen can work as hard as they want, or be as lazy as they choose. Their wallet size will be affected.

The value of money is taught realistically. Nothing is free, and even possessions have more meaning the harder you have to work for them.

Good behavior can be rewarded realistically, just as bad behavior can result in pay cuts.

Also, here are some of the results I can almost guarantee will take place:

Your child's 'name brand obsession' will come to a hault. Why spend $75 on a pair of jeans when a $20 pair are just as durable (if not more.) You understand this, now your child will too!

If you have the same financial difficulties as I have, this allowance system is one you should be able to afford.

You won't have to lift a finger at home!

Extra things you can do to teach your child better money management:

Take your teen shopping with you. Show them how to find the better deals.

As mentioned earlier, set an example. You too will benefit by wasting less, conserving more, and always looking for the better deals on things you need. (Buying anything you didn't originally intend to buy simply because you have the change to save some money is not saving money!)

Compose a budget for your child. To teach your child about money, you can set a monthly expense list that your child must pay. ($20 for tv, $15 for phone, etc.) Your child must meet and surpass a certain income in order to meet these bills. If they don't pay these bills, they lose the privilege (tv, phone, etc.) of what isn't paid. Put their money into a cd, savings account, or some form of investment for their future.

Good luck to you, and your children!