It is a known fact that young people between the ages of 13-19 are forever challenging those of us that have brought them into the world and sometimes dream about taking them out of it. {popin}

They demand the latest fashions.  They must have the most advanced electronics and technological gadgets.  Their hair and nails must be done on a regular basis, and I am not just referring to females.  They must have the latest model of tennis shoes that cost more than a microwave or DVD player.   They just take and take and take.

If you are like me, living with a teen, then you understand that they do not think like normal people.   In their world, money not only grows on trees, fall from the sky, and lands on your front porch, but it is clear to our sweet darlings that we are the “money making machines” that keep the cash clouds full!

Well, this year, we decided to really teach our teenager the value of a dollar.  The steps were very simple, yet profoundly enlightening for her.

Step One:     We discussed the basics of the household budget with our teen.  Mortgage payments, electricity, real estate taxes, home insurance, car insurance, telephone bill, cell phone bill, food bill, and yes, even gas; were all listed on a sheet of paper.

Step Two:    We asked our teen to write down what she thought we paid for each expense on a monthly basis.  We gave her one hint; the cost of each budget item was between $10.00-$500.00.

Step Three:    We then asked our teen to add up all of her “guestimations” in order to determine the amount of income that was required to run our household on a monthly basis. We adjusted her estimates with more realistic amounts.

Step Four:    We then discussed the entry level salaries for each of our employment types and had her to look them up online.  Once she determined the annual salaries, she was to break them down by month.

Step Five:    We then had our teen to take the current minimum wage, which we constantly stress is what she will be making if she does not continue to have school as her main job.  She is to determine how many hours she would need to work in order to satisfy the present monthly obligations of the household if she were making minimum wage.

Step Six:    For the next thirty days or more, our teen is to work the hours required in order to earn the income needed to maintain the household for the month.

Ex)      $5.85/hour is the present federal minimum wage (until July 2008)

Total monthly income needed is $3500.00 for all expenses

Teen must work 598 hours to meet the monthly household budget.

Step Seven:    Set-up a work sign-in sheet that monitors the hours worked and requires a signature as confirmation of each hour worked.  Total hours to be worked should be listed on sheet.  You can choose the duties.

Ex)    Teen Name:_____________    Hours to be Worked:__________

Description of  Duty    Time Worked    Parent  Signature    Comments

I, ___________________, agree to work all of the hours required to earn the monthly income for our household.

Teen Signature:____________________        Date:___________________

We found this experience to be extremely effective for our teen, who, by the way, is still working on earning the monthly income for our household, and we are on month three.  Have we heard her say “uncle!” yet?  Of course! But the point is to remind them of concepts like work ethic, integrity, and keeping your commitments.

At this point, we are certain that our teen has learned the value of a dollar, one hour at a time!

Managing Money is A Matter of the Heart!