From first diapers to first cars, every parent knows that raising a child can be a costly undertaking. The average cost of raising a child from infancy through age 17 is $233,610—or around $13,000 a year—according to a new study from the U.S. Department of Agriculture. That’s why it’s so important to practice smart spending habits from the get go, so your money can go further and you can enjoy all your kid’s milestones without worrying about your finances.
Raising a teenager can be particularly costly. From sports to school trips to a budding social life—we’re looking at you, prom!—teenagers have a lot going on. That’s why we’ve partnered with the BuyPower Card from Capital One to highlight smart spending tips from real parents of teenagers. Not only will these simple methods save you money in the long run, they’ll also set your children up for a lifetime of savvy financial decision-making.
1. Trade Offs
California-based lifestyle blogger Donna Biroczky has four children (and two dogs!). And her 16-year old teenage son has some rather pricey pastimes: football and video games. Both hobbies require hundreds of dollars in equipment, ranging from sports equipment to high-performance computers.
To offset the costs of these expensive hobbies, Donna taught her son to budget, but she didn’t stop there. She also sat him down with a list of components for his gaming computer. Together, they determined what was negotiable and what was not, replacing high-end components with lower-priced alternatives wherever possible, essentially balancing performance with price. They also cut costs further by using a refurbished computer tower, rather than buying a new one.
Though Donna treated her son to a new pair of Nikes, she reinforces the importance of trade-offs by emphasizing some limits: they would only shop at discount outlet stores, and he would have to stick to a price limit. For additional wardrobe upgrades, Donna’s son would have to dip into his own allowance. Beyond teaching her son the value of budgeting, Donna was also instilling a great money mindset in her son by prioritizing needs over wants.
2. Stocks & Bonding
Heather Logrippo, a Massachusetts-based PR executive, isn’t waiting for her children reach adulthood to learn about finance. Instead, she’s already teaching them to make their money work for them by using the stock market.
On her children’s birthdays every year, Heather gives her kids two gifts: one item they’ve been wanting, and a choice of any company in which to purchase a small amount of stock in their name. By leaving the decision to her children, Heather stimulates open-ended communication as her kids debate why some companies are better investments than others. These “mini finance summits” also help her kids with investment strategies for future stock purchases.
3. The Good Ol’ Piggy Bank
Even in the digital age, analog methods are sometimes the best. Take the humble piggy bank. Predating modern banks, piggy banks have been helping people save ever since the Middle Ages! Research has proven that providing children with physical, tangible objects can enhance learning, especially when it comes to understanding the value of money. That’s why the piggy bank has retained its value all these years.
Texas resident Samantha Ledford, the mother of a 13-year old girl and a 15-year old boy, finds piggy banks to be especially useful. “We do the old-fashioned allowance technique,” Samantha explains. “So if they want a game or toy, they’ll have money in the bank.”
Some experts suggest that parents take it one step further by providing children with three jars: set aside one for spending money, another for savings, and the final jar for sharing. This way, as kids reach the adolescent years, they’ll already be learning the importance of balancing spending and saving while getting a headstart on altruistic habits, such as donating to worthy causes.
4. Delayed Gratification
Anitra Elmore, blogger at The Mama Zone, believes that delayed gratification is the most important skill for both children and adults to have. Research has shown that children who are able to put off their short-term needs in favor of future gains are more likely to succeed in school, as self-control is the top predictor for success later in life.
Anitra urges parents to model responsible behavior for their children to emulate. This includes transparent financial planning and resisting the urge to jump aboard the latest lifestyle trends, which can quickly lead to overspending. Instead, Elmore has taught her teens to wait for sales and seek out discounts in order to get the lowest price possible. Savvy shoppers should also consider online shopping plugins like Honey, which tracks price fluctuations, searches for coupon codes, and notifies you of any possible sales before checkout.
Financial responsibility is one of the most important skills that parents can pass on to their children. And with a little planning and some creative finance lessons, it’ll feel less like getting your kids to eat more broccoli, and more like empowering them for a lifetime of savvy spending and savings habits!
Developing healthy finance habits for your whole family should be a rewarding process. That’s why the BuyPower Card from Capital One rewards parents with Earnings on every purchase. With no limit and no expiration, you can redeem points towards a new Chevrolet, Buick, GMC or Cadillac vehicle––because your teenager will likely be asking to borrow the car soon! Learn more about how the BuyPower Card can enhance your family’s everyday spending by providing powerful rewards that go the distance.