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Budgeting for High School Students

Naturally, as children grow up they begin to seek more autonomy and become increasingly self-reliant.  It might start with walking to a neighbor’s house on their own, slowly evolve into a solo outing to the mall and, before you know it, they’re embarking on a small road trip with some friends.  While establishing independence is great (though possibly nerve-wracking for parents), kids need to be reminded that freedom also comes with certain responsibilities.  Chief among these new responsibilities is fiscal prudence.  Indeed, learning how to create and work within a budget is quite important.  Unfortunately, these are life skills that are seldom taught in the classroom.  As a parent, it’s up to you to take the lead in teaching your child how to become financially responsible.

Here are a few tips to help kick-start your budgeting lessons:

Give your child a modest allowance.  Let her decide how to allocate the funds.  She’ll quickly learn that spending it all up front will likely mean forgoing further fun until the next pay day rolls around.
Set up a savings account for your child.  This will hopefully allow her to feel a sense of control and responsibility towards any money she earns and/or receives.  And, perhaps more importantly, it will encourage her to continually set aside a portion of her earnings (where she can yield interest).

Have your child keep a list of short term and long term spending goals.  This will ensure that she begins to understand the difference between wants and needs.  Her short term list could include things like lunch or gas money.  Long term spending goals are loftier, luxury items like a new iPhone or a video game console.

Encourage your child to get a job.  It doesn’t matter if she babysits on the weekend or works at a pizza shop every day after school.  As she gradually begins to earn a little more for herself, you may consider curbing the amount of cash you dole out.  After all, the more she’s forced to spend her own money, the greater the chances she’ll be judicious with her decisions.  

Have your child spend a week (or even a month) tracking her spending. There are many websites that will help with this exercise.  She’ll begin to see what she’s putting her money toward and the areas in which she’s most likely to spend.  Perhaps this will lead her to realize that she doesn’t really need to purchase that coveted sixth pair of jeans.

Limit the number of trips to the ATM.  If your child can continually access cash, she’s much more likely to be cavalier about how frequently she spends.  However, if you only allow for one trip a week, she’ll have to really think about how much money she’ll need to cover her expenses.  

No bail outs!  Should your child encounter cash flow problems due to her own design, resist the urge to come to her rescue financially.  She won’t alter her spending habits if she knows she’ll be able to turn to you when her proverbial well runs dry.

Discuss how you budget for the family.  While there’s certainly no need to incorporate your child into all the financial decisions you make, you should talk about your own spending habits and the ways you determine how to allocate funds.  You can highlight your methods for saving for vacations, broach the merits of clipping coupons or waiting for sales and even address your retirement plan.  By talking about budgets with your child, she’ll start to recognize the importance of exercising fiscal discretion and she’ll begin emulating your practices (well, fingers crossed).
Teaching your child about budgeting is a critical part of parenting.  Though financial responsibility might not be an intuitive skill (especially for adolescents), it’s nonetheless something that must be learned.  After all, you don’t want to still be handing out an allowance to your child when she’s 30 do you?


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Don Munce