Dear Mary: My 16-year-old son has absolutely no concept of money. He gets a weekly allowance on Friday, and by Saturday afternoon it's gone. I'm concerned about what's going to happen when he has to manage money when he goes away to college. Every time I bring it up, he says he has earned this money and can spend it however he wants. What can I do while he's still at home?
-- Carrie, Utah
Dear Carrie: Managing money is a learned skill, and experience is the best teacher. I believe that teaching kids about money is so important I wrote "Raising Financially Confident Kids" (Revell, 2012).
I recommend following a plan I used with my own kids. I'll be honest, though, it's going to be a lot harder on you than him.
Start by giving him his allowance for a full month all at one time. Trust me on this, and just do it.
Next, make a list of items -- be very specific -- you will not pay for anymore. For example, clothing, car insurance and haircuts. He pays for anything on that list from the money you give him. When it's gone, it's gone until his next "payday."
If he spends all of it the first day -- and he probably will -- keep your mouth shut. Don't nag, scold or remind. Allow him to experience the consequences of his financial decisions while he is still over your safety net.
Do not give him an advance, loan or gift to get through the month. A little suffering is good for him. Just wait it out.
Next month, repeat -- one
In a month or two, give him a raise but also add items to his list to offset it. Soon he will be managing more money than you thought possible. When he leaves for college, he'll know what to do.
Do you have a question for Mary? Email her at mary@everyday cheapskate.com, or write to Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630.