Allowance for Teens: Helping or Hurting?

If you give your teen an allowance, but you don’t like what he or she is doing with it, then please consider this:  Your child might just be practicing bad money habits with money you are giving them!!  

Habits are hard to break.  All too often, most parents are unintentionally allowing their teens to practice poor money habits and attitudes with their allowance.  However, an allowance, when offered as part of a financial education, is a powerful teaching tool.  In this context, an allowance can be an opportunity for teens to develop great money management habits and attitudes. 

Try having your teen divide her allowance into 6 categories: 

  1. Necessities
  2. Play money
  3. Big ticket items
  4. Future financial freedom
  5. Education
  6. Contributions to make the world better for all of us

This is a great money management system.  It takes a small amount of effort to get it going, but this system makes spending and saving decisions EASY and CLEAR. 

This way, teens will always know what they can afford and what they can’t.  They will learn to spend, save, invest, and give.  They will begin to make the connection between money management and quality of life.  Most importantly, they will discover that they can have as much money as they are willing to earn, rather than thinking that money is a restrictive factor in life that requires strict budgeting, penny-pinching, and “going without”.

Please share your successes, questions, thoughts, and ideas about allowance and teens!

© WealthQuest for Teens, Ltd., 2011 All rights reserved worldwide.


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