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Tuesday, May 6, 2014

Why We Let Our Teenager Manage Our Budget



My husband and I have been using (and sticking to) a written budget for our entire married life (26 years!) We have experienced the peace that comes from living debt-free — including our home — for many years.
In 2012 we decided it was time to make finances and budgeting “real” for our oldest son.  He was 16 at the time.  We put him in charge of our family finances for six months! That’s right. He took it over “lock, stock, and barrel and I think it was an experience that he will never forget.
If you’d like to get your teens more involved and aware of real-life finances, here are a few tips that helped us.
Give Them Credit
I admit, this has a dual meaning. We homeschool. So, it was natural for us to offer our son high school credit for his foray into the world of finances. But, I also mean, that I think we need to give our children credit for being mature enough to learn real world, life-long lessons by taking an in-depth look at our family’s money.
I did feel a bit sad that, somehow, I had taken away some of my son’s innocence by letting him know just how hard it can be to “make it” on one income. I wanted to be sure that he retained his feeling of security. We don’t want our children to worry that “Mom and Dad won’t have enough money”.
However, to my surprise, the opposite occurred. He saw, even more than before, the depth of our praise at seeing God meet our needs in amazing ways.
Give Them Tools
We began this process by enrolling our son in a six-week money management course, which we attended with him. This gave him a lot of Biblically-based knowledge about money principles in a logical and sequential manner.  
We then set out to show him practical examples of how to make your money work for you.  On the Crown.org website, I showed our son that if he began with $saving $450 a month, at 5% interest, he could purchase a $120,000 home for cash at the end of 15 years.   Here's the tool we used to calculate this monetary magic.  http://www.crown.org/FindHelp/Personal/Calculators/savingsgoal.aspx.  Then, we used the tools to see what a $120,000 mortgage would COST at 5 percent interest for 15 years.  The interest on a 15-year mortgage at 5 percent is about $50,000.  It is nearly $112,000 with a 30-year mortgage at that same 5 percent interest.  I LOVE on-line calculators to show kids real examples about money.  Let them put in their own savings goals and amounts.  They’ll begin to understand the importance of delayed gratification and long-term goals. 
Give Them the Reins
Let them do it! After the money management class, I opened up our finance books to our son. He couldn’t sign the checks, but when a bill came in, he told me how to fill in the check (or make the transaction on-line) and entered the amount in the proper part of our household ledger.
He entered all of our expenses into the ledger, kept track of each category, made a spread sheet at the end of each month showing what we spent in each category and what we averaged thus far for the year. He also made recommendations on what changes we needed to make in each category – if any.    
Give Them a Goal
Our son’s final goal was to look at this year’s totals in each category and set up the family budget for the following year. So we set January 1st as an end date for his “course in family and personal economics”.
A sense of completion is important and the end of the year always seems like a time to take a deep breath and say “thank you” to God for helping us and blessing us. So, January 1st, he received his 1/2 a credit in “Consumer Economics”.
For his final exam, he produced our “end-of-the-year log”.  This document details our net worth, savings for the year, what percentage of our income went to each category, a list of our current short, medium, and long-term goals, and the 2013 Ware Family budget!  Whew! 
When we began this project, I knew I wanted our son to take the finance course for at least six months so he could see seasonal fluctuations.  I also was fairly confident that something unexpected would happen within that time frame — so he would get to see the emergency fund at work.
It did! He accidentally hit the garage door while I was teaching him to park in the driveway.  J  This would be why my husband has taught the lad to drive and not me. 
He is now so aware of how much money it takes to make it from one month to the next – and he is very proactive in helping us stay on target. He is also genuinely grateful any time we are able to give him something extra — not a needed item — but just something to bless him because he is our son and we love him.
He now knows first-hand where that money came from and how hard it is to stretch. Money has become a reality to him!

Adendum:  January 2017:  This post was originally written in 2014.  Our son is now a sophomore in college, has won several scholarships, has nearly a 4.0 GPA, and is paying his own way through college.  He was just awarded a full-ride tuition scholarship to a fantastic Christian University!  Oh, and he is a major money saver, lives on a budget, and plans for future goals.  Looks like he learned his lessons well.  
     Our second son has also now had his chance to manage the family budget.  He attended a nine week Financial Peace University class with my husband and me.  I was delighted to find that even after decades of following a budget I gleaned a lot of helpful information.  My son was heard quoting concepts from the videos for weeks afterwards.    Go to http://www.daveramsey.com/fpu/home/ictid/classpage/ for a list of classes near you. For Biblically-based money advice, check out http://www.crown.org/  or http://www.daveramsey.com/home/.   You’ll find a lot of wonderful budgeting advice there along with charts, articles, and interactive tools.  As an added bonus, when my second son was in charge of the budget this tech-loving, wonderboy computerized the entire system for me!  I love it!  He had a blast investigating all the on-line budgeting programs and picking the best of the best.  We now use https://www.everydollar.com/, a FREE monthly budgeting program from Dave Ramsey. 

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