Ask Melinda: The Art and Science of Teenage Allowance

Question: How much allowance should I give my teenager?

I have been looking forward to this all week! I am so excited about writing the first “Ask Melinda” Friday post. There’s nothing I enjoy more than serving up some free advice. Step right up! Bossy women like me are always convinced we have a plan that will work for you—and everyone else on the planet. Keep those questions coming! I will get to you all eventually. I promise.

It will surprise no one in my family that the first question I have chosen to respond to involves teenagers and allowance. I am a cheap mom. I have to be. We are always on a budget around here, and the bills never seem to match up with the incoming green. Every month, there are unexpected expenses. Just one month I’d like to see a sweepstakes windfall or the Prize Patrol at my door. That never happens. I feel certain I’d make a lovely rich person, but I can’t envision any scenario in my life where that might play out. I don’t have any rich relatives. I’m not a good poker player, and I’m not devious enough to make a living as a professional criminal. I’m a writer (How many rich writers do you know? Some of the greats nearly starved to death. Look it up. I’m telling you the truth.) I have 3 teenagers. They suck up every dime I dig out of the sofa cushions.

Here’s how I see it: The amount of allowance you give your teenagers depends on what you expect them to pay for using those funds, obviously. If it’s just an entertainment budget, as in they don’t have to pay for a car, insurance, gas, groceries, drug store items, clothing, gifts, or anything else except treating themselves to café lattes and movie tickets, I say that number can be fairly lean. The trick is to make sure they have enough cash on hand to get out of a parking deck somewhere but not enough to buy contraband. Being a broke teenager is not a bad thing. Not at all. Too much walking around money leads to trouble.

The truth is that money isn’t real to a teenager until they earn it themselves. When my oldest son got his first paycheck last summer, I said, “It took you a whole hour to earn enough to pay for one of your fast food lunches. Get it?” “Yeah,” he said, disgruntled, “And who is FICA, and why is he getting half of my money?” “Welcome to big boy world,” I said, “I hope you’re not counting on that income for your retirement, by the way.” You can yak to your teens all you want about money; nothing speaks louder than minimum wage.

Bottom line: Give your kids an allowance–whatever you think is fair. (If you need to make adjustments later, you can, of course. The rate isn’t set by the U.S. Treasury Department, you know.) Teenagers have to learn to manage a budget. They will make mistakes. Count on it. Don’t bail them out of their poor choices! That’s how they learn. Don’t micro-manage their allowance either. That undermines the whole arrangement. Stay out of it—even when they blow every dime on concert tickets the first week of the month. When they run out of money, they run out of money—just like in the real world. Better they miss out on a fun outing with friends now than a mortgage payment later. And remind them that they are the biggest financial investments of your life. If they win the lottery, you expect a percentage.