By Cindy Minetti
Getting tired of being the Bank of Mom? Handing out money every weekend for the mall, movies, food, the mall, make-up, the mall? Worry that your daughter will know what it is like to live within a budget?
My family tried many approaches to money management, some more successful than others, and some lasting only as long as it took to purchase the desired item. Allowance: it never seemed to be enough; Paying for chores: once she got the money, the chores stopped or were only completed with nagging; Finally, we just became the parental ATM: doling out $10 or $20 at a clip, arguing about whether she really needed the new pair of pants or more itunes money.
Last spring, when my daughter Rachel was in 9th grade, and weekend trips to the mall and hanging out with friends became much more frequent, we decided to try a new approach. Rachel gets paid monthly for being our kid! Yes, this is much like an allowance, but we are trying to teach her money management and the concept of paying for her expenses. For about 6 weeks, to get a baseline, I tracked what I spent on her and when I gave her money. This included everything from clothes to make-up to activities with her friends to birthday presents. I wanted the monthly amount to be something she could live with, and not ask for extra money for everything out of the ordinary.
We opened a checking account in her name (and mine) so she could have a debit card but there is no overdraft, so she can’t overdraw and get charged lots of fees. (Note: I worked with the bank to set this up. The account is linked to our overall banking relationship so we have no fees or minimum balance. Rachel can only see her account online and not ours.) Each month, I deposit money into her account and she pays her expenses. Our agreement is that I will pay for family items and basic necessities, including required clothes for school under the school dress code. She pays for everything else – fun clothes and shoes, magazines, make-up, social activities, Starbucks – everything. Her money must last the month, so if she buys a lot of things the first week, she may not have enough to go to lunch with her friends the last Saturday.
So 10 months later, does this work? A resounding YES! There have been some growing pains – friends’ birthdays can take a big chunk of money, so we supplement some of that. And just because something can be worn to school, it doesn’t automatically get bought by me – once she did her back to school shopping, the rest was her responsibility. And I definitely have to “bite my tongue” when she goes online and shops the first week of the month and buys a $30 headband! But each month, she plans out her spending, gives tzedakah, puts away some money for future concerts or more expensive items, and only asked for a “loan” twice. She also learned a good lesson about shipping and return costs when ordering from online merchandisers. Rachel has learned to check her account online, use a debit card, budget, and most importantly be more independent financially. I hope the transition to college is this smooth!