When your teenager gets a job it’s a huge step for them towards being an adult. When Hailey was younger I didn’t really teach her about money management because we didn’t have any left over for her to manage. I tried to set a good example. As a single mother many times I lived hand to mouth but I let her know the importance of paying your bills first, taking care of anything that is a true need, saving some for a rainy day, and then, if there is anything left, getting something you want.
When Hailey got her first job at sixteen she was so excited, she was finally going to have money of her own, to do whatever she wanted. Before that first paycheck came in we sat down and talked about money. I told her that now that she was working she would be responsible for her portion of the cell phone bill, the cell phone is a want, not a need, so if she wanted it, she would now need to pay for it. I told her how to budget for it, take a set amount out of each paycheck and put it aside so when the bill is due, the money is waiting for it.
This worked for a little while but then it seemed she was always waiting until the bill was due and having to pay it out of one paycheck which left her broke until the next one. I made her tough it out, if I would have given her money she wouldn’t have learned.
At times we will need to bail our children out but I think it’s important to teach them some responsibility as soon as possible. I took Hailey to open a checking account with her first paycheck. She was very proud of that debit card and used it well, for a while, until she realized that even if she didn’t have money in the bank, she could still use her debit card. I started to notice mail coming for her from the bank at random times during the month, they were overdraft notices. She learned the hard way. One week she had over one hundred dollars in overdraft fees, and the purchases she had made were all under five dollars. We talked about how much that soda and bag of chips really cost her, and how many hours she had to work to pay for them and she went right to the bank and had them remove the overdraft.
I don’t think they should set children’s accounts up with overdraft protection, if they had mentioned it when we opened it I would have declined the coverage but since they didn’t Hailey learned a good lesson. She is much better at managing her money now, and her bills are paid on time.