The approach: Give kids paying jobs — inside and outside the home
The mom: Jan Malone, Vancouver, WA
Her goal: With her sons Jacob, 17, and Keaton, 16, well established in high school, Malone wanted them to take on more responsibility around the house. She also hoped they would learn to plan their spending and to allow for financial responsibilities such as having a car, as well as figure out how to create new opportunities when they needed extra cash.
Her system: Malone, 48, requires the two boys to do weekly chores without pay. But for larger projects, such as wiping down all the baseboards in the house, the teens can earn points worth $1 each, up to 10 points per week. Both boys also work outside jobs. Keaton earns an average of $60 a week, some from teaching computer skills to seniors but most from babysitting. Jacob, who starts college next year, brings in $175 a week from giving guitar lessons. The Malones require Jacob to save half of the money he makes for his freshman-year spending account. "Our goal is that he won't have to take a 'real' job during the school year," his mother says.
When Jacob asked for use of the family car, his parents agreed — as long as he saved the full insurance deductible in case he crashed. Once he'd stashed that money in the bank, the Malones offered to pay his monthly premium in full if he earned a GPA of 3.9 or higher. "I think the lowest he ever got was a 3.8, and he had to pay 10 percent of the premium," his mom says. "He doesn't want that to happen again." To help both boys move toward their goals, Malone — who once worked as a banker — keeps a ledger to record their income and spending, and she goes over it with them regularly.
What the expert says: Robert Duvall of NCEE says that this workplace-oriented approach has several advantages. It provides stability, rewards initiative, and gives kids control over their time as well as their income. Plus, it teaches them there are many ways to earn money.
He also praises the idea of having Jacob save up for his college spending money. That should teach him to set financial goals that extend beyond his daily expenses and give him a greater stake in his education. Having his folks pay his insurance premium if he earns a high GPA sends the message that his parents are committed to having him succeed at his studies, Duvall notes. He also approves of Malone's bookkeeping because tracking and analyzing teen spending starts them thinking like adults about money. Another suggestion: Help kids figure out how to do a cost-benefit analysis of their purchases, he says — for example, ask, "Were those $150 Nikes worth the hours of labor they cost?" The answer is up to them; you're just training them to consider the question.
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