Teens have expensive habits: the latest clothes, expensive hair products, designer shoes, mobile devices, and video games… not to mention concerts, movies, and dining out.
Unless you happen to be independently wealthy, these items probably aren’t in your budget.
Once your teenager gets a part-time job and his own source of income, he may develop a sense of freedom he’s never experienced before and start spending money a little too freely.
Your job is to bring him back to reality.
Do this exercise with them. This is the time to discuss things like car insurance, eating out, gas, and those items you may still be paying for but are ready to over turn to him.
This is a great opportunity remind him of the frivolous expenses he incurs.
Identify Poor Spending Habits
Little things like a $5 Starbucks drink or dropping $10 at a fast food restaurant really add up. Add these purchases to his budget, if he hasn’t already considered them.
Now, share your budget. Point out the monthly expenses you shoulder on his behalf – things like clothing, car insurance and gas.
Together, decide which one of you will be responsible for what. If the burden seems too heavy for him now, pick a date when he will be responsible for these expenses.
Point out your monthly expenses and help him realize that your budget does not include lighthearted expenses.
Visualize the Dream
As part of the budgeting process, encourage your young adult to establish a saving habit.
To inspire him, talk about his dreams. Does he want to purchase a car? Have him verbalize the dream and then write it down.
Create a savings plan to show how much money he’ll need to put away to achieve that dream. Consider incentivizing him by offering to match whatever he deposits in his savings account.
If he focuses on saving for the dream, you can use that to point out the frivolous spending that’s preventing them from achieving it.
Get Him Started
If your young adult receives regular structured settlement payments that become lost in his day-to-day spending habits, consider contacting a company such as J.G. Wentworth.
When your child turns 18, he may be able to sell his future payments for one lump sum that he could then use to start a savings account.
Sometimes having a substantial foundation in savings encourages better savings habits. Maybe that lump sum would pay for a car or college tuition without having to go into debt.