Got a tween or teen? The days of her getting wide-eyed at the sight of shiny coins are long gone. Now she wants crisp bills or smartphone apps to use at the school store, to get snacks with friends, or for shopping at the mall. Scary! But with your big kid spreading her wings, she's ready to learn some big lessons about saving and spending--so she'll be well equipped to manage money once it's time (sniff!) for her to leave the nest.
1. Earn More Money by Working Harder
Up until now, your child may have been getting an allowance, possibly supplemented with extra earnings for chores. This is the time to encourage her to find other money-making opportunities as well, says Danny Kofke, author of "A Bright Financial Future: Teaching Kids About Money Pre-K Through College for Life-Long Success!" "You want to teach the lesson that when you work harder, you get paid more," he explains.
If you can afford it, offer to raise your child's allowance by half on the condition that she takes on vacuuming the living room or doing her own laundry. Older kids may be ready to begin babysitting or finding other small jobs to do for neighbors.
As the earnings pile up, your child "may start understanding that when people go above and beyond, they get rewarded for it," Kofke says. And if she decides extra chores or jobs aren't worth the extra ka-ching? "The consequences aren't really that dire at this age," reassures Kofke. Either way, she'll realize that a strong work ethic can pay off, literally.
2. Think Twice About Impulse Buys
With each passing year, kids become less impulsive, learning to think things through before deciding to do or pursue them. Now it's time for her to apply that same restraint to spending money, says Melanie Hasty-Grant, a financial adviser, family therapist and cofounder of Waterstone Private Wealth Management, who runs a financial summer camp for children.
"When you're at the grocery store together, point out all the ads and displays designed to trigger impulse purchases," Hasty-Grant suggests. They can be anything from the special deals at the ends of certain aisles to the candy and trinkets on display right by each cashier station. Talk about why people might make a split-second decision to buy these items (they're hungry or stressed, for example, or the products look like bargains), and why they might not be so happy with their purchases a little later ... or when their credit card statement comes in.
Also, Hasty-Grant suggests, bring up deals that are supposed to pressure consumers to buy something right away or buy more than they really want--for example, ads that say "One-Day Sale!" or "Buy Two and Save!" Brainstorm ways to resist the temptation. Remind your child that sales happen all the time, and there's nothing special about this one. And that if she doesn't need two of something, then the extra item isn't really a steal.
3. Balance a Checkbook
True, your child may not necessarily have a checking account yet, and breaking out an old-school pen-and-paper checkbook might seem a little antiquated. But mastering the tracking of incoming and outgoing cash is fundamental to understanding how to save and spend responsibly.
"Use your own checkbook ledger," says Hasty-Grant. (You can also download a template from the web.) "Show your child how you put deposits in one column, withdrawals in another, and figure out your new balance each time." Explain that not keeping the account in balance has repercussions, like the embarrassment, hassle and financial penalties of bouncing a check.
Even if she doesn't end up writing many checks herself, it's important she knows how to do it, so go through each part (date, amount, signature, memo) with her. Show her how to use the ledger to track and balance deposits and debit card withdrawals as well. "Demonstrate how to use other bank forms, too, like deposit and withdrawal slips," adds Hasty-Grant.
Consider also letting your child help you use the ATM too. She can punch in the deposit or withdrawal amount, for example, or you can supervise as she takes out or puts money in her own account, if she has one. Demystifying the cash machine can make her a more confident bank customer down the road.
This post originally appeared on LearnVest.
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