Teaching Dollars and Sense

When Barry was in his mid-20s, his years of lavish-living in college caught up with him in the form of student loans and what seemed like a mountain of credit card debt. After living frugally for several years and declining numerous offers to dine out or go to the movies, Barry is proud to say he’s paid off his debt and has reached a level of financial security. Unfortunately, he can’t say the same for his teenage daughters, who enjoy the instant gratification of spending money. His money.

Sarah, 14, and Kelsey, 16, spend the majority of their allowances on new shoes, clothes and the latest pop releases. When the green stuff runs out, they rush to mom and dad for more, and usually, Barry and his wife give in. When Barry tried the old-fashioned method of sitting his daughters down for a heart-to-heart about money management and the importance of saving, Sarah and Kelsey let the message go in one ear and out the other. Instead of continuing to nag his daughters verbally, Barry decided to get them involved in their own finances.

Here are a few of the lessons that had the most impact on his daughters’ spending habits:

• Barry and his wife stuck to a firm “no” when their daughters came begging for money after they were already given their allowance. He also cut back on footing the bill for unnecessary items the girls wanted. Forced to use the money they had, the girls automatically thought twice before shelling out $20 for a top or $150 for a pair of designer jeans. They started searching for sales and saved their money for the items they really wanted.
• Barry encouraged his daughters to get part-time jobs, even if it was babysitting for the neighbor. Not only would it give them extra spending money, but it would also teach them time management.
• Barry took his daughters to the bank to open their first savings accounts. Both girls set a goal for the amount of money they wanted to save over the course of five months. To make it fun, Barry made a contest out of it; whoever reached their savings goal would get a special prize.
• At 16, Kelsey has taken her driver’s education courses and is preparing to get her driver’s license. Like any other teenager, she’s been begging her parents for her own car. Taking the opportunity to teach his daughter a lesson in saving, Barry told her he would match the amount she saved to put toward a car. Kelsey cut back on her clothes shopping, and stuck to the clearance racks when she did shop. She was able to save half of the cost of a used car. With her dad’s matching incentive, she’ll soon be able to make the big purchase.
• Barry used his daughters’ love of fashion to get them interested in the stock market. Both Sarah and Kelsey picked a brand to follow. The sister whose brand did the best after a month got the choice of a $10 gift certificate to the mall or a $10 donation to their savings accounts. The fun contest got both into the habit of watching the business channels alongside their dad, leading them to get a better understanding of stocks and commerce.

Thanks to Barry’s out-of-the-box thinking when it came to his daughter’s money management skills, both are equipped with a solid foundation in saving and investing. Barry can only hope they won’t make the same mistakes he did in his 20s.

If you’ve got a compelling story to tell, then click here to contact us. Put “Up Close and Personal” in the subject line and leave us a description of your story. We may feature you in an upcoming issue!