Giving your kids an allowance is a smart idea. It’s never too soon to learn about financial education for kids. An allowance can also teach other important concepts, including:
Delayed gratification—saving for things they really want
Charity and helping others
Budgeting
But many parents have questions about how much to give, what to do about chores, and other allowance policies. Here is what experts recommend.
Determine How Much Allowance to Give
Calculating the right allowance amount really means thinking about what you expect your children to buy with their funds. If it’s simply extra spending money, then the allowance does not need to be very much, particularly for a younger child. But if you expect your child to pay for many of their own day-to-day expenses, then it should be higher.
When you’re making the decision, consider:
What your child is now spending on the things you will expect the allowance to cover (say, school lunches, clothing, and birthday gifts for friends).4
What your child’s peers are getting, if you know.
A base rate of one dollar per year of age every week or every other week. The idea is to have a formula that will slowly increase as your child gets older.
An amount that can be split into thirds: One-third for saving, one-third for spending, and one-third for charitable contributions.
Create Sensible Allowance Policies
As with any other family rule, set expectations about allowance from the beginning, and then stick to them. Give your children their allowance each and every week, whether or not they remember to ask for it. This helps them learn how to budget.
If they run out of funds before the next payday, don’t bail them out. Part of the point of an allowance is to learn how to prioritize and budget.4 Giving advances doesn’t help kids learn how to use their money carefully.
Encourage or require your child to set aside a certain amount each week for short-term and long-term savings and for charity.
Avoid Allowance Mistakes
Keep allowances working for you and your family by steering clear of these common mistakes.
Tying allowance to doing chores. If the allowance is associated with specific chores, kids can stop doing the chores and say they don’t want the money anymore. Keep regular chores separate from allowance (keep giving the allowance even if your child fails to do chores).
Instead, allow your child to earn money beyond allowance by doing extra chores—as long as regular chores are complete. Regular chores are just part of being a contributing member of the household.
Withholding your child’s allowance as a punishment. Take away privileges instead.
Doling out extra money. Don’t give your child money for extras in addition to giving an allowance. This means the allowance isn’t helping to teach financial responsibility.
Starting too late. Between five and seven years old, most kids are ready to start learning about money and understanding the concepts allowances teach.
Many parents focus attention on their children’s grades and extracurricular activities, such as by making sure kids study, do their homework, and get to soccer practice or dance lessons prepared and on time. But all too often, we forget to put time and effort into nurturing another component of child success and development—one that is just as important, and perhaps even more essential, than good grades, awards, and trophies—being a good person.
It can be easy to forget the importance of countering the pervasive messages of instant gratification, consumerism, and selfishness prevalent in our society. If we want to raise children who are pleasant company and genuinely nice people, we can help guide our kids toward habits and behaviors that promote positive character traits like kindness, generosity, and empathy for those who are less advantaged or who need help.
Raising Your Children to Become Good People
As C.S. Lewis famously said, “Integrity is doing the right thing, even when no one is watching.” How can we raise a good child, one who will do the right thing, even when no one may see them do it, and when there may be no reward? While there is no guaranteed formula (if only!), here are some ways parents can build good character and help their child grow into a good person.
Nurture Empathy in Your Child
Emotional intelligence and empathy, or the ability to put oneself in someone else’s shoes and consider their feelings and thoughts, is one of the most fundamental traits in good people. Studies have shown that having a high emotional quotient—that is, being able to understand one’s own feelings, the feelings of others, having self-control, and being able to control one’s own emotions—is an important component of success in life.
To encourage empathy in your child, encourage your child to talk about her feelings and make sure she knows that you care about them. When a conflict occurs with a friend, ask her to imagine how her friend might be feeling and show her ways of managing her emotions and work positively toward a resolution.
Encourage Them to Lift Up Others
While stories about kids engaging in bullying and other bad behavior often make headlines, the truth is that many kids quietly perform good deeds in the ordinary course of their lives, whether it’s making a friend feel better when he’s down or pitching in at a community center. As you encourage positive behaviors such as doing something to make someone’s day better (even something as small as patting a friend on the shoulder when they’re sad), be sure to talk about what negative effects behaviors like gossiping or bullying have on both sides (both those who are bullied and those who do the bullying), and why and how it hurts people.
Teach Them to Volunteer
Whether your child helps an elderly neighbor by shoveling the sidewalk or helps you pack some canned goods into boxes for donation to family shelters, the act of volunteering can shape your child’s character, also teaching kids about money will help them to learn and think about the needs of those less fortunate than they are, and can feel proud of themselves for making a difference in others’ lives.
Don’t Reward Them for Every Good Behavior or Act of Kindness
An important thing to remember when encouraging kids to help others is to not reward them for every single good deed. That way, your child won’t associate volunteering with getting things for himself and will learn that feeling good about helping others will be in itself a reward. That’s not to say you shouldn’t occasionally take your child out for a special treat or give him a gift for helping others AND for working hard and studying hard; kids love encouragement and thrive on parents’ approval. An occasional reward is a great way to show him how thankful you are for the good things he does.
Teach Them Good Manners
Does your child routinely practice the fundamentals of good manners such as saying “Thank you” and “Please”? Does she speak in a polite manner to people and address elders as “Mr.” and Ms.”? Does she know how to greet people properly, and is she familiar with the basics of good table manners? Is she a gracious loser when she plays a game with friends? Remember that you are raising a person who will go out into the world and interact with others for the rest of her life. (And this little person, as she grows, will be at the dinner table with you and interacting with you every day until she leaves the nest.) You can play an important role in shaping how well-mannered your child will be.
Treat Them With Kindness and Respect
The most effective way to get kids to speak to you and to others in a respectful way and to interact with others in a nice manner is by doing exactly that yourself when you interact with your child. Think about how you speak to your child. Do you speak harshly when you’re not happy about something? Do you ever yell or say things that are not nice? Consider your own way of speaking, acting, and even thinking, and try to choose a friendly and polite tone and manner with your child, even when you are talking to him about a mistake or misbehavior.
Don’t Be Shy About Disciplining Your Child
Parents who hold back on giving children boundaries or firmly (but lovingly) correcting bad behavior may actually be harming their child with good intentions. Children who are not disciplined are unpleasant, selfish, and surprisingly unhappy.
Some of the many reasons why we need to discipline include the fact that children who are given clear rules, boundaries, and expectations are responsible, more self-sufficient, are more likely to make good choices and are more likely to make friends and be happy. As soon as you see behavior problems such as lying or backtalk, handle them with love, understanding, and firmness.
Teach Her How to Be Thankful
Teaching your child how to be grateful and how to express that gratitude is a key component of raising a good child. Whether it’s for a meal you’ve prepared for dinner or for a birthday gift from Grandma and Grandpa, teach your child to say thank you. For things like gifts for birthdays and holidays, be sure your child gets into the habit of writing thank you cards.
Give Them Responsibilities Around the House
When children have an expected list of age-appropriate chores to do at home, such as helping set the table or sweeping the floor, they gain a sense of responsibility and accomplishment. Doing a good job and feeling like they are contributing to the good of the household can make kids feel proud of themselves, and help them become happier.
Model Good Behavior
Consider how you interact with others, even when your child isn’t watching. Do you say “Thank you” to the checkout clerk at the market? Do you steer clear of gossip about neighbors or co-workers? Do you use a friendly tone when addressing waiters? It goes without saying that you directly influence how your children will be. If you want to raise a good child, conduct yourself in the way you want your child to act.
Many parents wonder whether it’s ever appropriate to charge a teenager rent. While you shouldn’t charge rent while your teen is attending high school, there may be times when becoming a landlord is appropriate. In fact, charging your teen rent might be the kindest thing you could do in some circumstances.
When to Charge Rent
As long as your teen is attending school full-time (whether it’s high school or college), don’t charge rent. But, don’t let him continue the free ride if he’s not furthering his education.
Here are a few examples of when you should expect your teen to contribute to his room and board:
Your 16-year-old drops out of high school and says he wants to get a job.
Your 17-year-old quits school and says he’d prefer to just get his GED.
Your 18-year-old wants to live at home after he graduates from high school. He plans to find a job, rather than go to college.
Your 19-year-old drops out of college after one semester.
Dangers of Not Charging Rent
There’s nothing wrong with allowing your teen or young adult to live at home for a few extra years while she earns money or gains the skills she needs to live on her own. But allowing her to live rent-free could be harmful to her—as well as your relationship. Here are a few dangers of not charging rent:
Your child will miss out on learning skills. Independent living teaches valuable life skills, ranging from financial education for kids to budgeting and self-discipline.The longer your teen delays paying rent, the longer it will take for her to gain those skills.
Your child’s emotional growth could be stunted. Independent living requires young people to face their fears, step outside their comfort zones, and deal with stress on their own. Charging rent could be instrumental in helping your child build mental strength.
Not charging rent could be taxing on your income. Helping your child out financially could be harmful to your nest egg. Many parents delay retirement or give up things so they can continue supporting their children beyond the age of 18.
You may fuel your child’s fantasy about independent living. If your teen doesn’t pay rent, he’ll be free to spend his money however he wants. He may buy expensive things that won’t be able to afford once he has to pay rent.
Your teen may grow more dependent on you. Your teen should be gaining independence over time. But as long as he’s living in your home rent-free, he may grow increasingly dependent on you to take care of him. He may doubt his ability to live on his own.
How Much to Charge
Research local rental advertisements to get a good idea about what your teen might pay for a one bedroom apartment. Charge a little bit less for his room and board in your home.
Decide what other expenses you’re going to make your teen responsible for paying. Car insurance, gas money, and entertainment are a few of the bills he could start to cover on his own.
Make sure he knows that he’ll have added expenses when he moves out. Utilities, cable, and groceries, for example, may be more expensive than he anticipates.
What to Do With the Money
Some parents feel uncomfortable collecting rent from their children. They feel guilty about spending it or putting it in their own bank account.
If you don’t want to use the money for yourself, you could set the rent aside in a special account. Then, invest it into a retirement account for your teen or use it to help pay for your teen’s education if he decides to take classes at a later date.
But, you are certainly free to use the money however you want. Use it to cover your expenses, go on vacation, or save it up for retirement if you wish.
Teach Money Lessons Early
It’s important to start teaching your teen valuable lessons about money as soon as possible. Assigning chores and giving an allowance at a young age will teach your child basic money skills.
As he grows older, make your child responsible to pay for some of his own clothing or his entertainment. Teach him about budgeting and assist him in setting aside money for savings. No matter how old your teen is, it’s never too late to start teaching him to be financially savvy.
When your teen pays rent, he’ll learn how to start being more responsible with his money. If he’s late on the rent, or he’s struggling to manage his money, turn his mistakes into learning opportunities.
With practice—and more guidance—he will be able to be successful at paying his own way when he’s on his own. Your goal should be to ensure that he’s able to be independent once he moves out of the house.
Establish Healthy Guidelines
If you’re going to charge your teen rent, establish some guidelines that will help you live together more comfortably. It’s important to ensure that your rent collection serves as a worthwhile practice for both you and your teen.
Create rules that will ensure your teen learns from the opportunity you’re giving him. Here are a few examples of expectations you might set:
We’ll review your budget together. Tell your teen he needs to sit down with you once a week to assess his budget. Help him figure out how much he needs to set aside to cover his bills.
Late rent will lead to interest charges. Allowing your teen to be late on the rent every month won’t do him any favors. Hold him accountable by charging interest—even if it’s only a few dollars. His next landlord likely won’t be as kind so it’s important to teach him to pay on time.
In six months I’ll help you find an apartment. Make sure you have an end goal in mind. If your teen thinks he can live with you forever, he might not save up any money to money to move out.
Most importantly, keep the lines of communication open with your teen. Talk about rent-related issues as they arise to prevent them from damaging your relationship.
Remember, that you are still in charge. So even when your teen pays rent, he doesn’t have the right to break your rules, behave disrespectfully, or do whatever he pleases. You still own your home or pay for your apartment, so you get to set the rules.
When used appropriately, collecting rent from your teen could enhance your relationship and may better prepare your teen for the future.
Kids might ask, “What’s the economy?” when they hear it discussed on the news. They might hear that the economy is in good shape or bad shape, but they wonder what exactly that means.
It can be a difficult question for parents to answer, especially when the parents themselves don’t know what to make of the day-to-day economic news and how to teach kids about money. Luckily, you don’t have to be an expert economist to give children a basic understanding of the economy.
Provide an Overview
The economy is all about how money is made and spent in a set area—whether we’re talking about a local economy, a national economy, or a global economy. That includes the amount of money moving around the economy, where (or with whom) the money is accumulating, and the trends that influence how money moves around an economy.
Try starting with the basics, like how the economy is made up of buyers and sellers. Then, explain how each of us is both a buyer and a seller, it just depends on the circumstance at the time. For example, we use money to buy presents around the holidays, and food when we get hungry. We sell things when we need more money.
That can mean selling a car or a home. It can also mean selling our time or knowledge, like when a company needs work done or when someone is willing to pay for advice.
There are times when a lot of people have more money than they need to survive. When this happens, the economy is doing well. Just because the economy is doing well, that doesn’t mean that everyone is doing well.
But when a majority of the people in an economy aren’t stressed about money, then the economy is considered healthy. On the other hand, there are times when many people don’t have enough money to buy what they need. The economy is doing badly when this happens.
Don’t Get Too Technical
Giving kids a detailed, textbook definition of “economy” is likely to make their eyes glaze over. Even adults might have to stifle a yawn if they were forced to sit down for a by-the-book explanation of the economy.
A better approach might be to discuss how the economy’s ups and downs affect your family and friends personally. You don’t want to get too technical, nor do you want to sound overly optimistic or pessimistic. But there are some examples you can give kids about how economic news takes effect in the real world:
A bad economy means we shouldn’t spend too much money right now. We should only buy the things we need and try to make our money last as long as we can until the economy gets better.
In this good economy, most people can find a job, so they can afford to take their kids on vacation and buy necessities like food and a home.
The economy is bad right now, so it’s tough for many people to find a job. We need to sympathize with those who are struggling. They are trying their hardest to work, but they might not get a job until the economy turns around.
The price of something we want to buy is going up, so we have to decide whether we want to buy less of it or wait for the price to come back down.
Since the economy is good in our country, we have extra money that we can afford to send to countries with worse economies. We can help families there through the crisis by helping to buy food and build homes.
Watch Your Tongue
Remember, it’s not just what you say to your child that’ll shape their understanding of the economy, but what they overhear when adults are talking to each other. Kids take all this in, so unless you’re very sure you’re alone, choose your words carefully.
If you aren’t careful about the way you discuss the economy, you could end up teaching your child that the economy is synonymous with stress. You’re balancing the good with the bad in the things you say to them directly, so make sure the same applies to your private conversations.
You don’t want the negatives to seem too devastating or harsh. For example, avoid saying things like “we might lose the house if this economy gets worse” or “I might lose my job because of the economy.”
You don’t want to shelter your child from your financial life, even if it’s less than perfect. But keep the conversations age-appropriate. Remember that children don’t have as much experience as adults.
So while the economy may go through a rough patch, and you may lose your job, you know that the economy goes through cycles, and you will get another job—make sure your child also understands that economic situations aren’t permanent.
Make It Real
The best way for kids to grasp the meaning of the economy is to let them make financial transactions. Show your child how to earn money with an allowance. Teach them to save it, how to make a budget, and how to save up for big purchases. This helps them learn the importance of economic decision making well before they get their first job and start learning about economics in the real world.
Once your child has an allowance, get them set up with a savings account. They’ll need an account eventually, and it’s never too early to start saving. They’ll feel excited to do something as “grown-up” as going to the bank to set up the account. With the account opened, encourage them to set savings goals, and help them set up a realistic plan for reaching those goals.
Games such as Monopoly, Minecraft, and Stardew Valley feature economic systems that allow kids to have fun while seeing how an economy works. The games feature options to buy and sell, and the success of a player depends on their ability to balance short term gains with long-term goals, exercise restraint, and strategize how to make the most of the resources they have on hand. There are many other online games and board games that show kids how to manage money and resources, as well.
Keep It All in Context
The economy is both huge and hugely complicated. As mentioned at the top, most adults don’t even fully understand all the factors moving an economy on a day-to-day basis. Attempting to hide your gaps in knowledge or oversimplifying a concept could end up doing a disservice to your child.
Instead, cushion all conversations about the economy with comments about how there’s always more you can learn about the economy—but that good economists strive to have a balanced background of knowledge. Adults need to follow the economy and have a basic understanding of how it works, but it isn’t the only factor affecting society.
This presents an opportunity to bring up the importance of charity and empathy. Talk to your child about ways they’d like to see the world improve, and help them find ways they could donate a little of their allowance to contribute to that good cause. Better yet, see if there’s a way your child can use their resources to directly help someone.
Maybe they could buy and prepare food for a nearby homeless community or organize their classmates to help clean up a park. These acts help children learn that money and resources are useful for buying and selling things for personal benefit, but they can also be used to help uplift our neighbors—and improve the economy in the process.
So how did Black Friday go for you? On the one hand, there is nothing like the lure of the Door buster: that ultimate big-screen buy or appliance prize that tempts people to line up by the hundreds, sometimes overnight, to get a shot at the booty.
But if your kids were watching, maybe you just gave them a double whammy lesson in financial foolishness. Not to be a Grinch, but unless you waited in line for the sake of having fun, the chances of coming out on top are formidable.
If you braved a 4-hour line for a $100 discount, you only made out $20 better compared to making $20 an hour at your day gig (not counting the pizza you ordered in line).
Let us say, as an example, that you still scored some deals on a 20-foot-tall electric Santa and a barn-sized HD TV. But did you put those goodies on your credit cards? And if so, what does this teach kids about living within their means?
The point, holiday shoppers, is this: While presents are fine and dandy for the holidays, maybe it is time to think outside the gift box. That is: What if you started your kids down the road to investment?
Get Started Now
It is never too early to start teaching kids about money . By learning as early as 3-years-old, children can grow up to become more financially prepared and savvy. When you think about it, the beginnings of saving start with the use of piggy banks.
Some piggy banks exist that transcend that admirable goal. Susan Beacham, the founder of Money Savvy Generation, trains kids in financial literacy with use of an exceedingly clever tool: a plastic piggy bank with four tummies. This piggy bank has four compartments for the priorities Ms. Beacham contends kids need to learn: save, spend, donate, and invest.
The goal as parents should be to raise children as adults. If children know how to save or invest like millionaires by the time they are 21 years old, they may not have the actual million dollars in hand, but they will have established good habits to make it happen in the future. Here are 10 best practices and tips parents should keep in mind.
Setting the Stage: From Saving to Investing: While saving is an easy way to begin a child’s financial journey, investment is the next necessary step in making money work. You should point out the difference between saving and investing, and go over the risks and rewards of each. Children should learn that they should not place all of their eggs in one basket. The Consumer Financial Protection Bureau (CFPB) offers some helpful materials to use with children.
Keep It Simple and Speak Their Language: You should begin with the basics and not with relatively complicated concepts, such as the difference between an exchange traded fund (ETF) and a mutual fund, or how to short a stock. You should explain that investing is basically just a means of using money to create more money.
Teach With Stories: Kids (as well as adults) are hard-wired for stories. You should narrate your ideas of investing and involve them in your investing activities. You can describe your own saving and investing plans and explain why you are saving and what benefits you will secure in the long run.
Know Your Child’s Learning Style: You should tailor your lessons and explanations about saving and investing pursuant to how your child learns best. For instance, a visual learner will likely become bored with a conversation about investing. You should also employ different sources and methods to communicate, such as with the use of pictures, videos, smartphone applications, and narration.
“Game” the Market: You can start younger kids off by giving them a play money portfolio and tracking the results. Playing through online simulations can create a space for you and your child to openly discuss the rules of investing. If you are looking for an online tool, the SIFMA Foundation offers the Stock Market Game, which can be used with children in grades 4-12, and which works in conjunction with a smartphone app.
“Computer Game” the Market: Another way to take a fun route with teaching children how to save and invest is through true-life “gamification” of the stock market. The website Kapitall uses drag-and-drop features and eye-catching icons, and any resemblance between Kapitall’s user interface and a cool arcade diversion is neither a happy accident nor a random stab at novelty. The platform is the brainchild of video game entrepreneur Gaspard de Dreuzy (who has close to 20 years of experience in the field) and financial technologist Serge Kreiker, a former software engineer at Bloomberg L.P. It also features practice trading.
Buy a 10 Pack: Robert Johnson, President and CEO of the American College of Financial Services in the Philadelphia area, suggests parents give kids a portfolio of about ten stocks.6 You should pick one share each where some are dividend payers while others are not. This approach will teach children about compounding and investment yield, and will show them that investing in some of the best companies may not be the best investments to make.
Pique Their Interest in Compound Interest: The time it takes to compound an investment, and produce substantial returns, offers a real-world lesson in how money grows. Volatility is normal and knowing this, and investing through it, will keep emotions in check when investing at an older age. To make this understandable, you should teach kids how compound interest works by the “Rule of 72.” According to this rule, money doubles at a rate where 72 is divided by the percentage gain. So, if you are making 3% on your money annually, it will double in 24 years; that is, 72 divided by 3.
Do Not Forget Giving: Legendary investors like Warren Buffett believe deeply in giving—and not as an afterthought. When children receive cash gifts, they can be taught to put some of that amount in the bank and to donate some of it before spending.
Pass on Your Parents’ Gifts: As a parent, you can also pass along to your children any financial gifts your parents gave you. For instance, you can have them invest in stocks through a dividend reinvestment plan.
A University of Cambridge study showed that kids form their money habit by as early as 7 years old, and that their observant eyeballs are usually watching when their parents make monetary transactions. With a little bit of deliberate involvement, you can give your kids a financial head start.
Children develop financial and economic understanding when they have ‘‘personal economic experiences. For example, sources and amounts of money that children control influence their learning. Although young children under the age of seven years are unlikely to develop sophisticated understanding or conceptions about the processes underpinning such practices, they do develop a limited understanding relating to why they are done, and how they are effective.”
Start by helping kids observe and calculate the exchange of money from an early age and by asking for their opinion when you’re getting ready to make a purchase—big or small.
From introducing the concept of money to making their first investment, here’s a roadmap to guide you through the process of your kid’s financial education.
Introduce the concept of money: Introduce young kids to coins first. Teach them the value of coins and encourage them to save their coins in a piggy bank. Use a clear piggy bank or jar so that kids can actually see their pile of money grow.
Lead by example: Explain what you’re doing when you write and deposit a check, use an ATM card, or pay for groceries. Avoid actions such as making an impulse buy, and tell the kids you’re going to wait one day instead and see if you really want to make the purchase. Kids are very observant and will learn many of their money concepts by watching you and copying your behavior.
Open a savings account: Explain to kids how compound interest works and show them how their money grows in a savings account. Expand to a checking account once they’re ready.
Use an allowance: More than 4 in 5 Americans believe kids should receive an allowance, most commonly saying every cent should be earned and linked to chores (52%). While a quarter (27%) believe it should be partially earned and partially gifted.2 Whatever you decide, when kids receive an allowance they must learn very basic budgeting and rationing skills. As they manage their allowance money, their money management skills will improve.
Make learning fun: Play money games that encourage learning. Board games, online games, and homemade games are all possibilities.
Allow them to make mistakes: Let your kids make their own spending decisions, even if it means making mistakes and wasting their money. It’s a valuable teaching tool. However, be ready to step in and help guide them when they need it.
Let them earn money: Working summer jobs, becoming lemonade-stand entrepreneurs, or working for mom and dad will all help kids learn about business and hard work. If you pay an allowance, call the money a commission instead, and allow kids to earn various commissions for different household chores.
Create a budget together: Allow your kids to plan for a family event to practice their budgeting skills. Help them also understand the opportunity cost of spending money on one thing, that may keep them from having enough money for other things.
Teach your teen about credit: Help your teenager understand the concept of delayed gratification and the pros and cons of buying on credit.
Introduce taxes: Kids will often be surprised by the withholding on their first paycheck. Explain the concept of taxes early on and their paycheck will meet their expectations.
Encourage charitable giving: As Mary Gordon writes in her paper, The of Roots of Empathy, “Teaching children emotional literacy and developing their capacity to take the perspective of others are key steps towards collaboration and civility; they are indispensable steps towards preventing aggressive and bullying behaviors.” If you introduce compassion and philanthropy to your kids early, they will likely become eager volunteers and kind people as they grow.
Introduce long-term planning: Teach your kids about long-term savings and debt. Discuss the costs of college, cars, houses, and retirement early to give them a head start.
Teach about investing: Once they’ve mastered basic banking skills, encourage your kids to learn about the complexity of globalized markets. Explore the idea of stocks, mutual funds, or savings accounts.
Teach kids to set goals: Many successful financial milestones are achieved by goal-setting. Encourage your kids to set savings goals and work towards them.
They’re known as boomerang kids – the ones who move out at 18 only to return to Mom and Dad’s house a few years later when they’re financially strapped. For many families, supporting an adult child takes an emotional and financial toll.
Over the last four decades, there’s been a slow but steady increase in young adults moving back home. In 2012, 36% of young adults ages 18 to 31 were living in their parents’ homes, according to a 2012 Pew Research Center survey.
If you doubt you’ll be a fan of your teen living on your couch until he’s 30, take steps to encourage him to leave the nest – and stay there. Here are nine steps you can take now to decrease the chances your teen will move back home later:
1. Let Your Teen Make Mistakes
Teens need opportunities to make mistakes while they’re still living under your roof. If you micromanage all your teen’s daily activities, he’ll miss out on vital learning opportunities. Sometimes, natural consequences serve as the best teacher.
2. Teach Money Management Skills
The biggest reason teens move back home is due to financial problems. Start teaching kids about money at early age. Show your teen how to establish a budget and provide him with plenty of opportunities to practice buying clothing and paying for entertainment on a budget.
3. Educate Your Teen About Debt
A lot of young adults don’t understand the ramifications of debt. The concept of ‘buy now pay later’ becomes enticing to many 18-year-olds, even when don’t’ have the money to pay off the bills. Talk to your teen about the dangers of debt and make sure your teen understands how high-interest rates can wreak havoc on their finances.
4. Provide Guidance About Your Teen’s Future Plans
While teens need to have choices about they do in their future careers, it’s important to provide some guidance. A teen who wants to go deeply in debt for a generic college degree may spend much of his adult life paying back the loans. Provide plenty of education and guidance about your teen’s career-related choices.
5. Teach Your Teen Problem-Solving Skills
Healthy problem-solving skills can help your teen find strategies to deal with housing issues, transportation, and employment without moving back home. Proactively teach your teen how to solve problems independently.
6. Help Your Teen Learn How to Establish Healthy Relationships
Unhealthy relationships, whether it’s a friendship or a romantic relationship, can lead to lots of practical and emotional turmoil that can result in a teen moving home. Help your teen learn to recognize warning signs or red flags that indicate a relationship isn’t healthy.
7. Instill a Healthy Work Ethic
Instill a healthy work ethic by assign chores that teach responsibility and pay him an allowance for a job well done. When your teen is old enough, help him find a job. Help him see the benefits of work so he’ll remain driven to earn a living as an adult.
8. Teach Your Teen Life Skills
Teens need to know a variety of life skills, ranging from how to do chores to how to socialize with new people. Take time to proactively teach your teen the skills he’s going to need to live independently. Don’t forget to look at basic skills, like using telephone etiquette and addressing envelopes, which are often missed during the digital age.
9. Make Your Expectations Clear
If your teen thinks it’s normal to take out huge students loans and go deeply in credit card debt, he’s likely to think it’s OK to move back home. Make your expectations clear years in advance. Tell your child you expect him to be financially and emotionally independent. When he knows you expect him to hold down a job, pay his bills, and pay his own rent, he’s much less likely to move back home.
Life skills are valuable lessons kids will use throughout their lifetime. But most kids don’t learn how to handle real-world situations until they’re in high school. Don’t wait until your kids are teens to teach them life skills.
Get a jump start on teaching practical lessons to your children right now, starting with decision making and then building on each life skill lesson as your children grow.
Decision-Making Skills
Making good decisions is a life skill every child should begin learning at a young age.
Begin with basic decisions like chocolate versus vanilla ice cream, blue socks or white socks, playing trains or playing cars. When kids reach elementary school age they can begin learning about the rewards of good decisions and the consequences of bad decisions.1
Walk them through the many steps of decision making. Help them weigh their options, evaluate the pros and cons of that decision and then let them make the final decision to see how things play out.
Health and Hygiene
Your kids are never too young to begin learning about health and hygiene. In our hectic day-to-day shuffle, we’re always telling our kids to take a bath, brush their teeth, wash their hands, and change their underwear. We never tell them why, though.
Explain why health and hygiene are always going to be crucial parts of their days. As your children begin learning about this life skill, set up a chart that allows them to check off each task as they complete it.
When these healthy habits are established over time, take away the chart and your kids will mentally go through the checklist throughout the day without you having to continually remind them.
Time Management
Every parent knows how important time management is to keep your family on track. But it’s also important for kids to start learning time management lessons now.
Not only does teaching younger children how to measure time, stay on task and keep to a schedule help make your days easier, learning this life skill also helps them become masters of time so they can do everything from get up on schedule to someday getting to work on time.
Meal Prep
Even the youngest children can learn how to prepare a meal in the kitchen. We’re not talking about a five-course dinner, of course, but you can teach preschoolers how to fix a sandwich and elementary school kids can be taught how to use the microwave. And from tots to teens, your kids can be your sous chefs when it comes time for you to cook.
As your children become more confident in the kitchen, they can add on other meal prep life skills like learning how to bag their own lunch, make healthy food choices, cook a simple meal on the stove with adult supervision and plan their own meals.
Money Management
We teach our kids to count. We teach our kids basic math. We can take those lessons further and turn them into life skills they can begin using right now.
Financial education for kids is something adults have trouble with. Now’s the perfect time to start teaching your children about money, its importance and how to manage it so they’ll be better prepared when they start earning a paycheck of their own.
Teach your kids effective money management so they can learn how to save, spend wisely, make change, and understand that writing a check or using a credit card isn’t free money.
Cleaning
Sometimes it’s easier for parents to do all of the housekeeping themselves. It’s a missed opportunity for us to teach our kids how to keep the house clean, which they’ll eventually need to know when they leave for college and someday have a house of their own to take care of.
Start with age-appropriate chore charts that include learning how to make the bed, empty the dishwasher and dust. Also, think of the daily messes your kids make and how they can clean up after themselves.
For example, keep a towel or sponge in the bathroom that lets kids wipe away those globs of toothpaste they leave on the counter. Since toys magically move from room to room in your house, keep a basket kids can throw them all in to take back to their own bedroom at the end of the day.
Set a daily housekeeping schedule to make cleaning a part of their routine and stick to it.
Laundry
If you have kids, you have a lot of laundry. Teaching your children how to wash, fold and put away their laundry is not only a life skill that will help them, it will also help you.
Toddlers can learn a lot by helping you with laundry, such as sorting clothes by color and understanding textures. As they grow, kids can start putting the clothes in the washer and transferring them to the dryer. Elementary school children can then learn how to operate the washing machine and dryer and how much laundry detergent is needed.
As laundry comes out of the dryer, you can show them how to fold their clothes and put them away. Pretty soon, they’ll be handling all of their laundry on their own.
Comparison Shopping
“I want it! I want it! I want it!” How many times have you heard this when your kids spot candy, a toy, a T-shirt, a fish, or just about anything else you can think of that kids think they’ve got to have right now?
When we’re grown-ups we understand the value of the dollar and the importance of comparison shopping. However, we often overlook this valuable life skill we should be teaching our children.
The next time you’re standing in the store caught between a hefty price tag and a child demanding for you to fork over your cash, take the time to get your phone out and search for the item on a variety of shopping sites. Show your kids how much that item costs at other stores and what comparable items there are that may be of better quality.
Maybe the one in the store where you are is the best deal and top product after all. But teaching kids to be smart shoppers and taking the time to comparison shop will help them save money everywhere they go while also making smart decisions on the types of products they choose.
Ordering at Restaurants
As parents, we tend to place our children’s orders at restaurants just to make things easier on the server. However, letting our kids order for themselves is fun for them and builds confidence.
Many restaurants have picture menus on the kids’ menu so preschoolers can begin by circling or coloring what they want to eat. As that confidence grows, kids can begin verbally telling the server what they would like, from the entrée to the sides. Remind the kids to practice good manners by saying please and thank you after they order.
Getting Ready
Kids can learn how to get ready on their own at an early age. Let them pick out the clothes they’ll wear the next day before they go to bed. Choose an alarm clock that’s easy for them to set. Lay out their hairbrush and toothbrush. Use visuals to illustrate the whole process.
For example, take a picture of the alarm clock, their clothes, another one of their toothbrush, then hairbrush and even the potty to remind them to go before you head out the door. The pictures are daily flashcards until they get in the habit of getting ready all on their own.
Maintenance Around the House
Kids love to be your big helper and there’s always light maintenance around the house that they can pitch in to do.
Easy tasks include showing them how to change the toilet paper roll or bag up the trash. Older children can learn how to change a light bulb, unclog a drain and change, the vacuum cleaner bag.
A lot of behavior problems and discipline issues stem from problems surrounding a child’s allowance and chores. It’s easy to get into power struggles over these issues, especially with teens.
Establishing rules, setting limits and enforcing consequences about your child’s spending habits can help your child learn how to make healthy decisions about money for the rest of his life.
Teaching kids how to be wise with earning and spending money will not only prevent a lot of behavior problems, it will also be a skill that helps them for the rest of their lives.
I interviewed Andrew Schrage, financial planning expert and the co-owner of Money Crashers, to find out how parents can teach kids how to have self-discipline with money.
How do parents’ financial habits affect kids’ attitudes and behaviors about money?
The financial habits of parents have a direct effect on their children’s attitudes and behaviors regarding money. Children often mimic their parents, and if a child sees a parent wasting money or going into credit card debt, they’re more likely to do the same as they grow up. A child who has never been shown how to save money simply won’t know how to do it once they begin to manage their own finances.
How soon should kids be allowed to start earning an allowance for completing chores? How should parents decide how much kids should earn?
In my opinion, kids should start earning an allowance as soon as they’re old enough to help out with household chores. However, I do not believe in rewarding children for things they should do on their own, such as keeping their bedroom clean.
If the child actively participates in chores such as cleaning bathrooms, mopping the kitchen floor, and vacuuming, they should be compensated. How much to pay the child should be based on the parents’ current level of expendable income, as well as the amount of work completed.
What types of rules should parents create to help a child manage his money?
Parents should create some rules to help a child manage his or her money, but the child should also be given a certain amount of independence. Making mistakes and learning from them is a great way to become more educated on the topic of prudent money management.
Children should be highly encouraged to save a portion of their money, and starting a bank account is a great way to achieve that goal. They should also be encouraged to donate a portion so that they learn to give back. One absolute rule that should be established once they’re old enough is that credit card debt of any sort will not be tolerated.
If a teenager has a part-time job, should parents still set rules about saving and spending?
The same rules should remain in place, although the parent might want to consider allowing them a little more leeway. After all, it is their money. But the rule regarding no credit card debt should absolutely remain in place.
When kids receive money as a gift, should parents set limits with their spending or should kids be given the freedom to spend it however they want?
Freedom and independence are important to help kids learn more about money and how it works. Parents should explain to the child that the money is a gift and they can spend it how they want, but they should also reinforce the idea of saving at least a portion of it.
Landing a job is a huge step in any teenager’s life. It’s not enough to get the job, however—your teen also has to be able to keep his job.
And while you don’t want to micromanage your teen’s job (don’t call his boss and don’t attend the interview with him), you can take steps to help your teen perform well.
Helping your teen be successful at his first job can have many benefits. The skills he learns can prepare him for a future career path and the money he earns can teach him about money.
Work can also be good for a teen’s self-esteem. The added responsibility of holding a job can build your teen’s confidence, which is good for his mental health—as long as he doesn’t get too stressed out.
Whether your teen is searching for a summer job or she’s on the hunt for after school employment, these strategies can increase the chances that her first job will be a success.
Pay Attention to Appearance on Application and Interview Days
Encourage your teen to dress appropriately when he’s picking up applications. The hiring manager may be in the establishment and first impressions matter.
Talk about the importance of dressing up on the day of the interview as well. Even if the interview is at a fast-food chain or a place that provides a uniform for the job, appearance matters.
Clearly, your teen doesn’t need to wear a business suit to an entry-level job interview. But a neatly dressed, well-groomed teen makes a better impression than one walking in wearing pajama bottoms, a dirty T-shirt and flip-flops.
In some cases, body jewelry can be an appearance (or safety) issue at work, too. Many workplaces do not allow nose rings, ear spools, tongue jewelry or anything beyond conservative body piercings (think: pierced ears).
If your teen has piercings that may seem unconventional to some adults, tell him to remove the body jewelry before applying for the job—this way, he won’t be turned down because of a piercing when he may otherwise have been a perfect candidate for the job.
Dress for Success Every Work Day
If the new job provides a uniform, dressing for success means ensuring the uniform is clean and wrinkle-free.
If there isn’t a uniform, talk to your teen about appropriate attire. If an employee handbook came along with the new job, the dress code should be spelled out in the book.
If the job has no specific dress code, apparel still matters. Encourage your teen to wear well-fitting, clean clothes. Make sure her shoes are appropriate for the job too. No flip-flops, ridiculously high heels or sloppy boots.
Behave With Professionalism
An entry-level position means your teen may have to deal with lots of supervisors and, perhaps, difficult co-workers as well. Talk to your teen about how to deal with difficult people up front before it becomes an issue.
For instance, a coworker that has a nasty attitude should be dealt with respectfully, even if that coworker dishes out anything but respect. Harsh comments can be ignored, or if things get too far out of line, reported to a higher-up.
Likewise, other employees that are lazy or that use most of their work time to do anything but work should not be emulated. Encourage your teen to do the tasks he was hired to do, regardless of whether others follow suit. Work time is not Snapchat or texting time.
Talk to your teen about cellphone etiquette. Tell your teen to shut off her cellphone during an interview and make sure she knows it isn’t appropriate to send text messages or be distracted by her phone while she’s on the job.
Also, make it clear that it’s not OK to complain about her job on social media. Tell her to keep her work-related business out of her social media posts, without exception.
Handle Cranky Customers Professionally
In a customer service job such as a fast-food restaurant, there’s a saying your teen should know: the customer is always right. This doesn’t mean that the customer’s view is always correct or completely realistic, but that the customer should be heard and treated respectfully no matter how outlandish (or incorrect) their viewpoint seems.
In many cases, they just want to be heard or may want the business to right what they viewed as a wrong, such as an incorrect order or cold food. Much of the time this can be handled easily and quickly, but if an irate customer proves too difficult to rationalize with, your teen can ask a manager to help.
Maintain a Good Attitude
Sometimes, a first job can be a bit of a drag. Even so, a good attitude helps the day go by faster, plus it puts your teen on the fast track for potential promotions or higher pay. This doesn’t mean he should patronize the boss and other higher ups, or overdo it on the smiles and perkiness to the point his attitude comes off as fake.
Showing up on time every day, being reliable and filling in for others when needed, also shows the boss that your teen has what it takes to succeed.
In a nutshell, meeting work expectations and keeping a positive attitude go a long way in the workplace, whether it’s his first job or his fifth. A great attitude also helps diffuse potentially difficult situations and makes the workplace more enjoyable for everyone present.
Establish a Budget
By the time your teen figures out how much he’ll make each week at his new job, he’s probably already figured out what to spend it on, too. Discuss finances in advance and also focus on Teaching Teens About Money.
Most teens are surprised to discover how much of their checks go to taxes. So warn your teen in advance that a percentage of the money earned goes straight to the government.
Help your teen set financial goals, such as buying a car, purchasing new clothes, or saving for college. Work out a plan together to determine what percentage should be saved from each paycheck and how much can be used for “fun” money.
Teaching your teen about money now can help him learn valuable life lessons that will serve him well in the future. Saving, smart spending and perhaps even investing can help him become wiser with finances.
Address Safety Issues
There may be times when you need to become more involved in your teen’s work. Talk to your teen about potential safety issues and how he can respond.
For example, if your teen is being asked to perform dangerous tasks without proper training, he may not know he needs to speak up.
Or, if he’s being bullied by a supervisor or harassed by a co-worker, he might not know where to turn for help. In those cases, you may need to provide your teen with guidance and coaching about the steps he can take.
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Tim Connolly 