Asked on 23 Nov 2018
Is there any other way to teach him about taking charge of his own finances?
Currently he receives $50 a week, and I pay for his weekend outings as well as his transport and phone bill
I remembered that I was the one that requested my parents gave me monthly allowance instead. Reason was that I can manage my money better that way. Even negotiate the amount to received (using my elder sister's allowance as a base). even managed to asked for more then my sis when she was my age on the basis that she's always on a diet & I eat more. :D (was obese back then)
Mobile is not available then, but the transport costs are included in the allowance. I'm mostly driven by my dad & take bus (and not cab) if he is not free. Only got a concession pass when I got into Uni. (didn't get the concession before because I did a quick calc that showed the concession pass was more exp than the total bus rides)
With this, together with my ang pow money, I still manage to spend a tidy sum on Idol Merchandise. Any Electronics will only be bought by my parents during my birthday.
Enough of my reminisces. Monthly allowances is definitely a good way to learn to budget. problem is if he is ready for this. Discuss with your son, start with a much lower allowance than what you think is reasonable and let him negiotiate his way up. Include everything that you are paying for him, and made it clear that you will not gave him extra. And most importantly stick to it. This negotiation process is important for you to learn how he is spending his money & for you to teach him what is a necessity & what it a luxury. so be as detailed as you need to be. If you start of too high, you won't beable to learn these details.
Start with bare minimum next year and ask him to record his spendings for the first 2-3 months then both of you review it work out the new allowance (lessen it if you think he is spending too much on unnecessary stuff)
Along the way If he wants to negiotiate and increase, just tell him to justify it, and judge if it a luxury or need that he is spending on. Even if he runs out of cash before the next allowance, I suggest you stick to your gun and refuse to top up for food & prepare a packed lunch instead. (personal tip, that's the excuse I alway use to get more cash out of my parents. Puppy eyes... But I'm hungry... Works like a charm everytime.)
If your son can still successful squeeze cash out of you & let you feel it is reasonable, despite you being really strict and sticking to your gun, Congratulation, he's learnt how to be money savvy. (At the very least, he's learnt how the world works, and that money doesn't come easily)
I can't help but ask if it's $50 per week, how come 300 a month ? (There's at most 4 weeks in a month haha)
There's pros and cons. As do with many such plans, you're trying to limit their spending (which could be effective) but you're not advising them how to. For example, they can can just indulge in KOI tea twice a day, just below the $10. The habit is simply not desirable. Another concern is him suddenly inundated with such amount of cash from just $50. There is a high chance of just splurging it on electronics or what nots (by that i mean earpiece, shoes, etc). I suggest for him to keep a statement of his weekly expentiture, if it seems acceptable to you, then you can transit to montly $300. Also, I dont think you should be paying for his weekend outings. I feel anything not considered a necessity (transport (to school), food, education) should be paid by him personally. (Phone is debatable)
3 more comments
23 Nov 2018
23 Nov 2018
If I had a son, I would give him the full $300 monthly for one month to start, and observe how he goes about budgeting for his transport/phone bill etc.
Post observation, I would then speak to him on budgeting, based on how he looked to apportion his allowance.
It's actually interesting to see what your kid would do without guidance!
You are very thoughtful for your kid and it is very nice of you that you are supporting and you are planning to support him in near future also.
See, if you will just give him money without talking to him that, how he can use this money and support his expenses, you won't be able to make him learn the importance of money.
Now you are giving him $50 a week that means $200 per month, I will say don't jump into $300, make it $220 or $250 at max. Tell him "you are a young man now, and I expect you can manage and balance your expenses with money. I am adding $20/50 extra in your allowance. If you will be able to manage your money I might increase it. But first, you have to prove yourself that you are good with money."
You can share your experience with money, like how did you start.
After that, he might understand that you are not just giving him money but you expect him to respond.
Children usually feel good when they are given responsibility.
This is what I would have done with my kid but I have a younger brother and that "sense of responsibility" funda works efficiently.
As a spend thrift myself, I'd urge caution especially if you're giving him a lump sum.
If you're not, it might be better to understand exactly what he's spending his allowances on! That said, this is easier said than done, especially for a youngster his age.
Would be good to perhaps remind him why some purchases are worth it & why some are not (albiet in a not so naggy way).
Good luck! Teenagers are a tough crowd!
when i started sec school, my dad started giving me allowance monthly to teach me to manage my money. you can consider giving him a higher sum, and not giving for his weekend outings and transport. that’s what my dad did. i paid for everything with my own cash, outside of phone bill cos he would pay that together with his own.
If your son can handle it, it's a good way to teach budgting.
Make sure it is communicated clearly that this is it, no more.
If he knows that dad will always save the day then it doesn't help.
Only you will know if your son can handle it.
Another way is also to make him "work" for "income".
Actually, maybe you can start to let him read up on books like "who moved my cheese?" fairly short books on financial management too.
Or how a kid turn entrepreneur with his recess money, or even how does having an income outside the standard amount is going to "pay for it" in the long run.
His money habits is more important (how he sees money) , though simulating the monthly sum helps him to understand job and career in the future too. Ca$hflow board games and "Game of Life" is a fairly good introductory imho
Wow I am 25 this year and I am spending $400+ a month on daily expenses, transport, bills, and insurance. In my opinion, $300 a month is too much for a kid. I don't think you should pay for his weekend outings! If he wants to go out, he gotta save up.
That's just my opinion though! Good luck!