How can you use money to teach a teenager a lesson that sticks longer than a nanosecond? One reader of my book did just that with his teenage daughter. He used a cell phone lesson to teach about money responsibility.
When his daughter’s cell phone broke (oh, the horror) she told him about her dilemna. She begged her dad to buy her a new phone.
In response, he looked at her and calmly said, “Remember, we agreed that you pay for your cell phone expenses. Use your own money to buy a new phone.”
“My own money!” exclaimed the daughter. “But I don’t have enough. Can you give me the extra?”
“Sure,” said the dad. “If I will lend you money I’ll charge you interest.”
“But you’re my dad,” she said, “How can you do that?”
“Because I am your dad, I can give you some of my money but I going to charge you interest. You get the money now and I earn a little for lending it to you,” he told her.
“But that’s not fair,” she said. “You could just give me the money. It’s no big deal to you.”
“The point is that you need to understand how money works in the real world,” he said. “When you borrow from a bank they charge interest. And they charge penalties if you don’t pay it back on time. Here’s your choice. Consequently, you borrow from me and agree to pay the interest. Or you wait until you save enough money to replace your phone.”
How to Create Your Own “Cell Phone Lesson”
- First of all, provide money regularly to your kids, with opportunities to earn more. Use a cashless payment method to make payday easier for you.
- Then, let kids have complete decision-making ability their money. Spending mistakes for kids teach big lessons and are not life-changing mistakes.
- Most importantly, assign spending responsibilities for kids to manage. In the example above the daughter was responsible for her cell phone expenses and needed to accept the consequences.
The cell phone lesson is one way of helping a kid understand how money and reponsibility go together. Require kids to use their own money to cover some of their day-to-day expenses. As a result, you, as a parent, lay the groundwork for them to manage money as an adult.
Lynne Finch helps parents teach their kids about money from piggy banks to online banking. “It’s time to teach the kids how to manage money they can’t see or touch,” she says. Follow Lynne’s common sense approach for teaching children that money is a number. The No-Cash Allowance provides a guideline for teaching about money to kids from pre-school through high school.