Your 16-year-old still wants an allowance. You say he should get a job. Who’s right?
Parent advice (from our panel of staff contributors):
It depends on the job market, and what’s going on academically. When school was in session, my wife and I had a “schoolwork is your job” attitude. The boys got a modest allowance that could be supplemented by weekend chores and side jobs. Once summer started, allowances were suspended, and every dollar had to be earned. But “get a job” only works when there are, in fact, jobs available, and there were one or two summers during which jobs were tough to find. Then, a little allowance supplement, along with a nice long list of compensated chores, might be in order.
– Phil Vettel
A job is great, but it should depend on his academic workload and extracurricular activities. I think teenagers need to think of going to school, of being students, as their full-time job. Everything else comes second, and if that means an allowance instead of a job, so be it.
– Bill Daley
You’re both right, says Joline Godfrey, author of “Raising Financially Fit Kids” (Ten Speed Press).
How often does that happen?
“An allowance is not a salary or an entitlement,” she says. “It’s a means of practicing financial skills.”
Continue to give him an allowance but encourage him to get a job to supplement it. And don’t be afraid to tie some strings to the allowance. Godfrey suggests creating a plan that tracks income and expenses and, along the way, teaches your child to make smart financial choices.
As earnings rise, the allowance should be reduced. “Essentially what you are doing is beginning the long process of shifting parental subsidy of children to increasing independence for that child,” Godfrey says.
Here’s how it works:
Step one: Parents and child decide which expenses the teen will manage. “The list will evolve as he becomes increasingly proficient and comfortable with the process,” she says.
Step two: “Tally up whatever this comes to for a month and a year. Remember, this is a projected budget.”
Step three: “Establish income. Teens typically have allowance, earnings and windfall – a gift from grandmother, for instance. This is all factored into the balance sheet.”
Step four: “Now do the same thing for income: Project expectations for each category. What is reasonable for a 16-year-old to earn after school during the summer, and how will that affect the ‘allowance’ you provide?”
The amount, then, is based on a realistic financial picture. And the allowance itself is just one funding source, with your child taking responsibility for supplementing it. Best of all, you are breaking your child of the habit of hitting you up for cash.
“Many parents balk at this approach,” Godfrey says. “It makes what the child is spending very transparent, and often parents get nervous about the amount the child sees they are spending. But the point is that kids are already getting an invisible allowance. This just makes it visible and equips them with skills and tools to practice money management in a meaningful way.”
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Try a four-step process to help shift children from parental allowances to paying jobs.