In 1980, there were over 29 million teenagers in this country. They spent just over $30 billion dollars that year, representing an awesome amount of purchasing power. They are important customers for a wide variety of products, from cosmetics to cars. The amount of money individual teenagers have to spend varies, of course, with age, sex, family affluence, and earnings. For example, older teenagers usually have more money than younger ones; both allowances and earnings increase with age. A Rand Youth Poll in 1980 indicated that teenage girls tend to receive slightly higher allowances than teenage boys. However, boys tend to have more income from earnings than girls.
At no other age is the compulsion to conform to the group as great as during the teen years; and no other group seems to have defined so well its identity, customs, preferences, and behavior patterns. In addition, the teenager is exposed to outside pressure to conform. Much of this outside pressure comes from advertisers, who consider the teenage group an important "target." This is a time when advertisers try to develop brand loyalty for their products.
Individuals vary in their reaction to group pressure, but all are affected by it. Perhaps one of our biggest responsibilities is to encourage teenagers to develop their own pattern of money management based upon good judgment. Then they will not be so readily influenced by the group. You should encourage your teenage children to evaluate the group needs for similar clothes, cars, and entertainment and to resist them occasionally. This is part of the growing up they must do. Remember that the teens are years of great change. They are years that will see a child turned into a young adult attending college, holding a job, or possibly getting married.
How can parents counteract group influences that they feel are bad? One of the most effective ways is to have set a good example all along by taking the family's needs, wants, and income into consideration when making decisions about money, and by allowing your children to participate in this planning. Family experiences in money management will provide a frame of reference when your teenagers face decisions about spending their own money.
Teenagers should have an allowance, but no more than the family can afford. An allowance gives a teenager the continuing experience of using money and living within his or her income. If your children have not previously had this experience, they should get it as a teenager.
During the teen years in particular, the dole system is not recommended. Young people who prefer the dole because they "get more that way" will not feel the need to plan or to set any limits on their spending. More seriously, they won't get real experience in planning and choice-making. A teenager who has experience managing money may be less likely to use emotional pleas and outbursts to get what he or she wants.
If your children have been receiving allowances while in grade school, it is recommended that the amount be increased during high school and that it cover an increasing number of personal needs. Some parents, for example, give their high school youngsters the responsibility of buying more of their own clothes than formerly, paying their car insurance, maintaining a savings account, and taking care of their medical and dental expenses. At some time during the high-school period, the allowance should be enough to cover all your teenagers' expenses or should supplement their earnings if your financial situation permits. This practice enables your children to gradually assume increasing responsibility in spending money for their personal needs.
Since teenagers will soon be on their own, they need to learn something about the cost of maintaining a home and family. The best way to do this is through practical experience in family money management. For example, if you have a food budget, your teenage children can do some of the meal planning and weekly food buying--at first with your help and supervision, and later on their own. Or, if they are constantly using the family car, they could assume responsibility for servicing it, paying insurance and other bills for it, and keeping an accurate record of all car expenses.
Your teenagers also can help pay the bills by writing out checks and addressing envelopes. Reconciling the bank statement can give a picture of both monthly and seasonal expenditures. If you keep family account records, let your teenagers write down the expenditures so they will see firsthand where family money goes. These records will give your son or daughter some facts about how much it costs to live. This type of realistic experience especially helps teenagers thinking about marriage, college, or a job.
Young people are under so much pressure to spend that most of them are eager to earn. Certainly teenagers should have an opportunity to learn from a working experience. They should arrive at adulthood with an appreciation for work and with the experience of meeting work situations responsibly.
Yet some limits must be set on the amount of work a teenager can do if he or she is to make the most of other learning opportunities. The high-school student who works long hours to support a car may have little time or energy left for study, school activities, or other social experiences. Encourage your children to set limits on the hours they work and to talk over problems with you.
Working for an employer outside the family gives a young person confidence in dealing with other people and some knowledge of what is expected on both sides of the employer-employee situation. If your children are working with you in the farm enterprise, you can still be businesslike. Don't impose on them, and don't let them shirk their tasks. Decide ahead what each child's share will be after the corn or cattle have been sold.
If your family includes some teenagers earning outside the home and others contributing to the work within the home, you will have to work out a system with them that is fair and agreeable to all. This is especially important if the teen worker no longer contributes a fair share of household work. The solution might be for the teen to contribute some wages to pay a share of household expenses.
Some families must use their teenagers' earnings to help meet family obligations. If this is the case in your family, your children should be consulted and their feelings and interests considered. The decisions made should be agreeable both to them and to you.
If one or more of your children work away from home during the summer, you might suggest that they try various jobs. Through vacation work your son or daughter may find the career that appeals to him or her. Hospitals, playgrounds, resorts, and factories offer summer opportunities.
Some teenagers have developed successful businesses from their hobbies; others are cashing in on skills and abilities. Don't take their ideas lightly. If your daughter thinks that her ability to wrap gift packages beautifully can be turned into a source of income, encourage her to be businesslike in studying her market, setting her prices, and advertising her services. Be her consultant in considering the advantages and disadvantages of her venture. If she needs capital, advance money to her strictly on business terms or help her get a loan from the bank.
Teenagers should decide how their money is to be spent. Although parents may offer advice, teenagers should control their own money and should accept responsibility for their choices.
According to studies of American teenagers, expenditures in the early teens tend to be for frequently purchased, relatively inexpensive personal articles. In the late teens, purchases include major items. It is well-known, too, that teenagers concentrate their spending on certain products. Their purchases of such diverse things as sneakers, soft drinks, cosmetics, grooming aids, and compact discs account for a considerable part of the total sales of these items. Practice in shopping helps teenagers develop their shopping skills. They should become familiar with comparison shopping, unit pricing, and sources of shopping information, such as consumer product testing organizations.
Teenagers often use credit as well as cash for their purchases. Some stores even have special credit plans for this age group. It is therefore important that teenagers understand the cost of credit and know how to use it wisely. With your counsel and through experience, your teenagers can learn when it is best to delay buying until they have the money and when it is wise to buy on a credit plan.
Rather than use credit, your children may ask you for loans. It is recommended that you set up regular amounts and times for repayments. You might want to charge some interest. Even a small amount will show a teenager the costs of using future income and the value of planning and saving.
Planning for future purchases is important for all teenagers. It is particularly important for those who, for example, receive tips to supplement wages, who get their incomes from a farm or other business, or who do seasonal work.
For successful saving, teenagers need a purpose, a plan, and resources. Reasons for saving are not hard to find. Most high-school students look forward to vacation trips, owning a car, or going to college. They like clothes, and many have hobbies for which they need equipment. It's up to you to help your teenage children decide what they want to save for and how to accomplish their goals. By encouraging your children to choose definite goals, you'll be discouraging wasteful spending and lack of planning.
Since saving is most effective if done systematically, talk over plans for savings regularly. Help your children decide whether they should save by the week or by the month. Also, help them decide the best place to keep their money--in savings bonds, in the savings and loan association, in the credit union, or in the bank.
After children enter high school, their sharing starts to become more complex and more like that of an adult. They still have the responsibility for individual sharing, such as giving to religious organizations, but they may also have to take on such tasks as managing the funds for a youth group or for school extracurricular activities.
Sometimes a high school group may spontaneously embark on a special program of sharing. One senior class, for example, decided to give the funds earned for their class trip to their adviser when her home burned. The important idea in such sharing is that it is done within the budget of the student. Often the whole family can take part in sharing, but for the senior class mentioned above, the project would have lost its point if the parents had been solicited to help.