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Adolescence and the matter with money.

Managing money is hard when adolescents never have enough.

Come adolescence, young people start to learn what their parents already know: that in life most people have to get by on less money than they ideally want and often on less than they actually need.

This is sobering realization at an age when worldly freedom to do, to go, and to have starts to matter and cost so much more. That's the power of money: it buys freedom of choice.

Money also affects standing with peers - from clothes to wear, technology to possess, food to recreationally eat, and entertainment to experience. To keep up with friends there is pressure to keep pace with their consumption. "Everyone else owns a cell phone! If I don't get one, I'll be out of it!"

For parents, adolescence brings more requests for money and for what money can buy than ever before. Children are satisfied to live primarily within the provisions of the family circle; but adolescents are more discontent to live on those household terms. They want the means to operate out in the material world. That's why adolescents are more expensive than children.

What frustrates parents is that teenage requests for money seem never ending. There is no enough. The reason for this ongoing demand is that adolescents, no matter how richly provided for, can feel financially deprived. In most cases, this is "relative deprivation" -- a envious fact of adolescent life because there is always someone they know, or know of, who has more disposable money, who is more in fashion, and who is better equipped with the latest fads than they.

Then you get the parents who grew up poor and worked their way into comfortable circumstances, raising adolescents who take for granted the financial benefits they are receiving because that is all they have ever known.

On the one hand these parents are grateful to be able to provide well for their children, but on the other it infuriates them that "the kids don't appreciate all they are given. They don't know the value of a dollar. Despite all we've told them about our upbringing, they don't know how lucky they are!" Maybe some regular community service to others less fortunate might convey the message parents feel unable to give.

So how can parents help educate their son or daughter about managing money? First of all, the young person needs to have some given or earned money to manage. For the beginning adolescent, this is where allowance and household jobs come in. (Household jobs are in addition to chores that are contributed as part of membership requirements everyone freely kicks in to support the family.)

Allowance can teach some early budgeting skills when it is dedicated as discretionary money the young person has to spread out over the week to pay for fun. Spend it all at once or right away and it will not be there for later. Of course, the young person always has the option to forgo some fun and save money for something more expensive to buy at another time. Jobs can teach working for money, having some effort and skill to offer for which the hirer is willing to pay. Earning power also boosts self-esteem.

From the onset of adolescence (usually around ages 9 - 13) parents need to begin teaching their son or daughter about the practicalities of money. The first step is to diagnose whether their child is by nature and habit a spender or a saver. The distinction is often telling because it is a rough indicator of self-control.

A young person who needs to spend money right away is often ruled by temptation, impulse, and the need for immediate gratification. A young person who likes to save money is often capable of patience, self-restraint, and the capacity to plan ahead.

If you have a young person who is a spender, have them practice saving some of what money comes their way. This will literally and psychologically mean "money in the bank" as he or she learns important self-management -- to delay gratification and even set and work for future goals.

In the larger picture, adolescence opens the opportunity to teach young people how to manage money at an age when it becomes increasingly important. One way to think of this instruction is by helping the young person make a variety of "money connections." For example:

Buying connects spending money to purchasing something wanted.

Earning connects the "making" of money to being paid for doing work.

Saving connects holding on to money to accumulating more.

Budgeting connects reserving money to covering anticipated expenses.

Tithing connects donating money to charity toward others.

Borrowing connects loaning money to obligation to repay.

Credit connects spending money now to deferring payment until later.

Investing connects risking money to the hopes of making more.

Banking connects securing money to keeping it in a safe place.

Gambling connects betting money to winning against the odds.

Bill paying connects owing money to affording services received.

Shopping connects using money to finding the best deal or right price.

Financing connects contracting money to pay agreed upon charges and fees.

Because adolescence is an age when awareness of the power of money increases, it is the time to start helping young people learn these "money connections." They need to understand what they can do with money and how to responsibly do it.

For example, I've known parents who provide allowance to help their early adolescent learn to wisely spend, to save, and to tithe. And I've known parents who help their late adolescent learn to manage a bank account, budget expenses, and pay some of their own bills.

The most powerful parental model for instructing about money I have seen is when parents honestly "open the books" of family financial management to their adolescents on a monthly bill paying basis. Now young people gets to see the hard money decisions that must be made to support a family. For example, they get see to the relationship between income and expenses, spending and saving, credit and debt. One outcome of this disclosure is that young people become more self-conscious about family money when they understand how it is in limited supply. However, such disclosure also makes parents more self-conscious too, which is why they often prefer to talk about their teenager's spending to talking about their own. "What we make and how we choose to spend it is none of the kids' business!" So this dad prefers complaining about how his children take money for granted than financially informing them about the costs and tough decisions it takes to support them all.

It's just my informal observation, but this is what I have found. Those young people who leave home at the last stage of adolescence, trial independence (ages 18 - 23), and have been taught "money connections" like those listed above tend to be the most successful in managing this next phase of independence. By learning to responsibly manage money, they have learned to manage themselves in a lot of other responsible ways.

For more about parenting adolescents, see my book, "SURVIVING YOUR CHILD'S ADOLESCENCE" (Wiley, 2013.) Information at:

Next week's entry: Being bullied - helping your adolescent not get pushed around.