Image Credit: Rafa1980

For those of you that have teenage children, I feel for you. It seems like they always need money for something and it's a life or death situation if they don't get it. Most teens have no clue about money and just want to spend, spend, spend. It's like money grows on trees and does not require work to get it.

I don't have kids but I do have a teenage sister. Every time she is with me and we go to the store, no matter what type store it is, there is always something she just has to have. I guess part of that is my fault. When she was younger, I would take her to the store and let her get whatever she wanted. She was just so darn cute, I couldn't say no. We are so far apart in age and when I went off to college, I missed seeing her grow up. I was her big brother and I left her. I felt guilty about that so I tried to make up for it by using money to show how much I loved her. I'm regretting that now and I'm trying to teach her to save.

She just got her first job babysitting. She gets paid about $150 a week and the job will last until she goes back to school. (BTW, she is starting high school this year). When she got her first paycheck, she wanted to go straight to the mall. I let her go all out the first time to help her get rid of the spending bug. She spent about $96 of her $150. I asked her what she planned to do with the remaining money and she had no clue. She figured she would find something else she wanted to buy and spend it on that. I knew it was time for me to step in and stop her from making a mistake that could possibly hurt the rest of her financial life.

She knew about saving money but it wasn't that big of a deal to her. We discussed it and I showed her my savings account as an example. She thought I was rich because I had $17k in my savings account. (Sidenote: Jeez, kids really have no clue about how fast that money could be gone once the bills are paid). I explained to her that came from years of saving and spending less than I earned. Yes, it is ok to splurge every now and then but don't go crazy with it. She agreed that she would take 50% of every paycheck and save it. As an incentive, I agreed to match whatever amount she'd saved at the end of the summer.

It will be interesting to see how much, if any, that I will have to match at the end of the summer.


  1. Anonymous // June 2, 2008 at 3:45 PM  

    Better start saving now! ;)

    I think that's a good way to do it, offering the match. A lot of parents have recommended it anyway. Since you're not living with her, it'll be harder to be a good financial example. But if you occasionally bring it up and help her find ways to get better banking interest, etc, I'm sure you can teach her a lot.

  2. MEG // June 2, 2008 at 5:24 PM  

    That's really great of you to take an interest and try to motivate her to save.

    I also try to guide (and by guide I mean badger) my little sisters into saving and building good credit and investing. I prompted one to open a Roth IRA after she got her first job, which she was excited to learn about; that still makes me feel good and helpful.

    My college age sister is headed to Europe this summer to study abroad. I told her she should use a credit card over there instead of a debit card, and she freaked out. "I don't have a credit card; no one ever told me I need to get a credit card!" So I simply told her why building credit is important - and how it's safer to use a credit card abroad anyway since you can cancel it and dispute charges easily - and so she went and got one.

    It's amazing how one or two comments or incentives - especially from a trusted source like an older sibling (parents work too, though they can be easily brushed off as out of touch) can change a person's whole financial outlook and system of habits, whereas sometimes money matters literally never cross a kid's mind until they graduate from college with credit card debt.

  3. sara l // June 3, 2008 at 5:36 PM  

    Her drive to spend is why marketing folks love teens.

    She's lucky to have a great big brother to help guide her.