Most people tend to spend money impulsively. Gone are the days that your grandmother would save spare change in the washing powder tin to purchase a new kitchen appliance. Nowadays, if you see something you want, you buy it. This is true for small-ticket items like candy and caramel lattes, to the big items like clothes and jewelry. Your teen will learn most of what they know about spending money from watching you. Your impulsive spending habits will then get transferred onto your teen.

When your child is young, and they watch you go to the store, put what you want into the cart, and then hand the cashier some money, they don’t understand the concept of working to earn that money first. They just see the spending side, and assume there are no limits. You just put what you want into the cart, and your parents will pull out money and pay for it.

When you start giving your teen money of their own, over time these habits lead to your teen spending money on numerous items, but not being able to remember what they spent their money on. They were simply making impulsive buying decisions.

Making a spending plan with them can help guide them into a world of budgeting and at the same time, help them see where the money they have each week goes.

Keep Records & Categorize

Have your teen keep a detailed record of expenses for two weeks. Have them record everything they spend, from the little items to the big ones, the required items like school lunches to fun stuff with their friends. Similarly have them record all their income during the same period. Income can come from jobs, allowance, and even gifts on holidays. Many times income has been supplemented by loans from you.

Sit down with your teen and take their list and help them break it down into categories: income; fixed expenses they have each week; and variable expenses. Be sure to always include savings as a fixed expense each week. This helps create the idea that saving for the future is a good habit. If expenses are growing faster than income, then look at ways to trim some of their expenses. During this discussion, as the parent, look to give guidance and advice, but be sure to allow your teen to make the final decisions about where their money is going to be spent.

As you total up the money spent in different categories it will help your teen to see what things that they spend money on. There are normally a few surprises, especially with small-ticket items they buy everyday. When you add up how much they spend on these things over time the numbers can grow large enough to be a bit of a shock. This is the point that your teen will begin to learn to control their expenses on a daily basis and not be as impulsive a spender.

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