A Three-Part Series to Help Your Child Learn The Ways of Money

Teaching your kids about money – Pre-adolescent thoughts
Gaining responsibility about money – Adolescent thoughts
Paying for college and being an adult – College and beyond
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Adolescence

Though your children may not be in this age category yet, there are benefits to looking down the road to not only contemplate this topic, but also get a feel for how all topics layer on one another, interweaving as expressions of your family identity. In today’s Letter we’ll explore family philosophic soundbites that over time molds adolescent perspectives, counsels their behavior, and ultimately influences their success. These perspectives regarding money open larger concepts for discussion. In this era of your child’s life, you are moving from trainer to coach and so must provide soundbites that you can build on into the next era.

Handling Money. At 16+, a child should have a checking account and a credit card with a $100-$250 limit. He/she will likely drive and need to get gas. The skills necessary to know how much money is in the account or available on credit are critical for college. A friend complained to her dad – “Dad! What do you mean I don’t have any money in the account, I still have checks!” – underscores the misconceptions around money, debt, and transactions.

Life isn’t fair. As the simplicity of childhood merges into the complexity of adolescence, a young girl’s or boy’s desires for spending money increases, thereby creating more opportunities to teach about money and how it is intertwined with developing character. Middle school dynamics are such that clothes or technology or activities of other kids can generate desire to keep up. But there are many reasons not to let peer pressure define how to allocate family resources. Instead, the money and character management technique to set a goal, delay gratification, pick up extra work, and buy the desired item when savings is sufficient, establishes the family norm of not reacting to impulse desires. As you can see, starting this family identity mindset early in life sets the stage for increased complexity. Furthermore, having your child earn their own money does support their position to purchase, but that doesn’t mean you can’t say no anyway. Life isn’t fair.

Fair isn’t even. What that means is when you have more than one child, parents weigh how to spend money so that it’s “fair”. Does that mean “even” where equal amounts of money are spent? We quickly found that standard impossible to keep track of, much less administer through high school and college with 3 kids of different ages. Your children should reasonably expect you to treat each of them fairly. However, fair treatment is unique to each child within broad parameters. One child plays sports, while another the piano. One child is on the travel team, while another is in the chess club. You won’t be able to balance the accounts monetarily, so don’t stress over it. Wait for weddings to see how uneven it is. Therefore, loosely finding a wide range of being fair and even should be good enough. It is reasonable for you to say that you’re not obligated to fund each child equally even though you may try and do it anyway.

Freedom follows responsibility. Getting a phone, according to Marr family logic, is a step towards getting a car. It’s about the freedom that comes with the demonstrated ability to handle it. A child shouldn’t get a phone nor a car just because they come of age. A flip phone with minimal capability is fine for a parent’s need to connect with a teenager. If they want a smartphone, then the added expense should fall on them. That requires effort and responsibility. So too, even getting a driver’s license for a minor is a huge expense, much less getting a car. But there are advantages to you if your child has a phone and has access to a family car. Therefore, encouraging your adolescent to figure out how to earn enough money to shoulder some portion of the cost should come into play. Again, the objective here is to use these desirable elements to spur your child to greater maturity and responsibility so they are more prepared in the next phase of their life.

They don’t pay you for your time, they pay you for your value. This understanding is important for kids to get. The world trades value for value. A job doesn’t pay for a person’s time; it pays them for the value they bring within that allotted time. Therefore, if you want to make more money, be more valuable. Learning the skills of a job, of course, is important, but skills are not nearly as important as character when it comes to teenage jobs. Show up on time, be respectful, be eager to learn, be friendly, look people in the eye, say please and thank you. Companies pay more for this value than someone who is teenage-surly but knows how to perform the job. So, your child should express your family values on the job. Early jobs are developing grounds for taking on responsibility in the outside world and feeling the weight of people counting on you. And hopefully they’ll make lots of mistakes along the way and feel the small stings of that pain. Better small ones now than larger ones later.

The theme here is creating an adolescent life that increasingly develops self-sufficiency while coming to understand how your family’s values play out in the real world. Having parented 3 kids from home life through college life, we heard many times how some kids hadn’t learned the skills of money management and, in general, self-management. These stories were sad and sometimes tragic. Leaving home can be traumatic for some. But it can also be liberating to some who may not yet be ready for the freedom. Money strategies during adolescence are more about living out life strategies than anything.

The next segment, College and Beyond, contains thoughts about saving money, the value of and funding of college, and the ownership of a college education.

To the successful launching of your child!!

Lis and Dave

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