Asked by Anonymous
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 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)
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.
Let me know if I could help.
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)