By SARA ARTHURS
For parents of teenagers it can be a constant dilemma: When should the parents buy something for their children and when should the teen use his or her own money?
There are no hard and fast rules but it may help to think in terms of wants versus needs, said Amy Carles, Hancock Saves program coordinator at the Ohio State University Extension, Hancock County.
“We owe our kids their needs: food, clothing, health care, shelter,” Carles said.
However, the specific choices within these categories could be wants, rather than needs, she said. Carles teaches seventh-graders about the difference between wants and needs and encourages children to boil it down to the bare bones: “Are you going to survive without it?” For example, food is a need but pizza is a want.
Clothing is another example of something that can be a want or a need. Of course, clothing is a need, “but it can range from low-end to high-end,” Carles said.
Parents may want to tell children who want brand-name clothing that they will need to contribute some of their own money toward the purchase.
Another option is explaining that they can have several of one item or only one of another, because of their difference in price.
“It is a hard conversation to have,” Carles said.
Ann Woolum, a certified public accountant at Knueven, Schroeder and Co., said teens should learn to manage their own money. At the same time, she cautioned against teenagers being encouraged to take on part-time jobs with too many hours as this can get in the way of extracurricular activities and even cause grades to suffer.
“Their full-time job in high school is going to school,” she said.
Woolum said it’s important to “be the parent,” sticking firm rather than giving in to children who may want the parents to buy everything. Woolum said it can be tempting for parents to give money to their children.
Instead, she said, parents should teach their children how to budget, save and spend money.
Carles said children begin to develop their “money personality” before they even start school, and teens surveyed have said their parents are their main source of information about money.
Around age 11 or so middle school children feel pressure to keep up with their peers in what’s termed “affluenza,” Carles said.
“It’s never too early to tie earning to spending,” Carles said.
As Amy Kutschbach’s daughters have become teenagers she and her husband have made some changes in shopping. It used to be that the parents would give 13-year-old Evelyn and 15-year-old Ellie the “basic clothes” and school supplies at the beginning of each school year. This year, however, they gave each daughter $250 to buy her own clothes, requiring them to budget the money.
Evelyn said her parents provide necessities but she spends her own money on other items. She particularly likes to shop for clothing at the Findlay Village Mall.
Evelyn saves money she receives as birthday and Christmas gifts and for doing small jobs for her family. She has had a newspaper route in the past. Ellie earns money from baby sitting.
Amy said the parents will buy things the girls need for sports activities. But the hope is to teach them about “budgeting and prioritizing needs and wants.”
She said they do not give the girls an allowance but they do get money for special jobs. For example, Evelyn is scheduled to help her grandfather on a painting project.
Tom Tomlins, an intern at Knueven, Schroeder and Co. and an MBA candidate at the University of Findlay, said parents should definitely provide “the bare necessities” but if a child wants something special it’s a good idea to have him or her work for and save up for the item, giving them a sense of the need to save for large purchases.
Tomlins, 22, said throughout his childhood he would be rewarded for chores with an item such as a toy. When he was about 13 or 14, his parents switched to giving him an allowance and making him buy his own items.
He was required to do some chores without pay but would get an allowance for others, such as mowing the lawn. This, he said, gave him an idea about “This is how a job works” and the realization that he would have to earn money through work.
Woolum said one possibility is that the child can work for something they want to purchase and their parents can pay them for doing chores. She said a child should be expected to do some chores as a matter of routine, without pay, but it might be that parents reward chores over and above the basics with pay.
Woolum’s niece and her husband had a different approach when their daughter reached middle school. The parents figured out what their daughter was likely to need in the course of a year for clothing, entertainment and athletic supplies. They then gave her an allowance of about $300 to $400 each month and told her she was responsible for buying what she needed, including clothing, out of her funds. Woolum believes she did not have to pay for basic groceries but did have to pay for meals out.
“They found out she was somewhat of a tightwad,” Woolum said.
Tomlins said once he had his first full-time job, as a freshman in college, and was making his own money, his parents expected him to pick up more of his own costs.
He said teens can learn skills from managing their own money.
“Long-term planning would be one,” he said.
He said it’s also good for teens to learn how to balance a checkbook. Woolum added that teens can learn to create savings for emergencies, a skill they will need as an adult.
Carles said some experts recommend parents not co-sign for their children’s loans or credit cards but instead give them access to the parents’ own cards and teach them how to use them responsibly.
Just as a teen learns to drive in someone else’s vehicle when they’re first going through driver education, they could be an authorized user on a parent’s credit card until they are 21, she said.
Sometimes well-meaning parents don’t talk about money with their children in an effort to protect them but this can mean the children don’t get the information they should, Carles said.
“Just make sure that it’s part of the conversation,” she said.
She said it may be a good time to talk about it when paying bills or on a shopping trip, as well as during meals.
Carles said parents “tend to give in very easily” if, for example, a child runs out of money and wants a loan.
“Understand what example you’re actually teaching,” she said.
Parents need to be aware of their own habits since children will be likely to pick them up. Avoid creating a situation where you encourage children to do as you say but not as you do. And if you want your children to save, do it with them, she said.
Carles said there is a “sense of entitlement” when children don’t know what it costs to live. Amy Kutschbach, too, said she thinks teens in general feel more entitled now than when she was young, when money wasn’t given as freely.
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