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How to wean your teen off an allowance

MMI Copywriter

By Kim McGrigg, MMI Community Manager

Children grow-up so quickly. Before you know it, the day will come when you must allow your child to assert his financial independence and take him off an allowance.

A common age to do this is 16, when many kids get their first paying job. However, age is only one factor to consider. It’s important to remember children mature at different ages. So the question of when to take your child off an allowance should be based on his readiness to effectively earn and manage his own finances.

When your child is ready, consider the following tips on how to effectively take him off an allowance.

Provide tools and resources for financial success. Teach your child the fundamentals of budgeting and show him how to manage household finances. Allow him to control some funds so he can learn how to set priorities and understand the difference between wants and needs. As he gets older, allow him to pay for some of his own expenses, such as buying school clothes.

Hold a family meeting. Make sure all family members are aware of what’s going on and explain the reason for the change. It’s important that both parents are on the same page about how, when, and why to take your child off an allowance. Also, give your child an opportunity to ask questions and provide feedback.

Offer a severance package. Before taking your child off an allowance, make sure he is financial prepared for the road ahead. Make sure he has plenty of notice and clearly understands when the allowance will end. You might also consider giving your child two to three months’ worth of allowance to help get him started.

Expect your child to face challenges. Resist the urge to step in and help your child when he faces minor financial challenges. These are growing pains that most kids face and it produces valuable rewards when he learns to handle mistakes on his own.

Taking your child off an allowance can be intimidating as he will have to learn to live without financial support from you. With the right guidance and financial confidence, your child can learn to earn and manage money on his own. Visit MoneyBunny.com for more parenting resources on teaching your kids good money management skills.

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Is tying allowance to behavior really such a bad idea?

 

 


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College students: Save money while living away from home

 

Heading off to college is both an exciting and uncertain time in the life of many young adults. It’s a first taste of freedom for most. However, sometimes young people can get carried away when they aren’t under the watchful eye of their parents – especially when it comes to money.

With the cost of education rising, it’s important for students and their parents to maximize every dollar. Life on campus is full of financial pitfalls and booby traps. Here are a few tips for maintaining financial health while living the college life.

Watch that food and grocery bill

The cost of going out to eat with friends, ordering late-night pizza, and indulging in daily lattes will quickly shrink your bank account. Consider purchasing a meal plan. Many schools offer on-campus meal plans for students at discounted rates. For some schools, these are built in to your student fees. Save by shopping at grocery stores and avoid convenience stores and vending machines. Unless the store accepts your meal points or gives student discounts, convenience stores are typically more expensive than a grocery store. Finally, learn to prepare food yourself. It usually costs less to make a meal than it costs to buy a meal from a restaurant.

Be careful with credit

Many college students enter college without a credit card in their name, but most leave with at least one. While establishing your credit history is a great thing to get started on while you are in college, there are some dangers in applying for and using credit cards in school. More than one careless college student has racked up a mound of credit card debt before reaching graduation. It’s incredibly tempting to use your credit card to go on a shopping spree, but you should seriously reconsider doing this. Develop the willpower to avoid charging unnecessary purchases, and you’ll take the first step on the path of responsible credit use.

Save some money – then save more

A lot of young adults neglect saving at an early age because they just don’t see the benefit or don’t have the discipline. If you begin saving a little every month you’ll be surprised at how fast that money grows over time. Your savings can be a life-saver in the event of a financial emergency; or you’ll at least have a tidy little nest egg to get you started in real life after graduation.

Make a budget – and stick to it

You won’t be able to effectively manage funds without a budget. List all sources of income and all monthly expenses. This will help you know when and what bills are due so that all bills are paid on time and there is enough money in your account to pay them. Planning and budgeting will help you avoid spending more than you can afford.

Finally, if you have cut out and cut back as much as possible and money is still tight get a part-time job. Look for freelance or part-time work in a field that interests you – freelance photography for example. It’s an opportunity to both bring in extra income and hone your passion.


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About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling, and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan, and repay debts. Counseling is available by appointment in branch offices and 24 hours a day, 7 days a week by telephone and Internet. Services are available in English or Spanish. To learn more, call
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