In This Chapter

You know you need money. The question is how are you gonna get it? We established in the last section that money indeed is a fact of life in our society. Opinions vary on how much you need and what you should do with it, but nearly everyone agrees that money is important—right up there with education, safe communities, and having your hair look good when you go out Saturday night.

It seems to many teenagers that they never have enough money. If this feeling pertains to you, don’t be upset. You have lots of company—teens and adults alike. We all are subjected to a lot of pressure from companies that want us to buy their stuff; they can be pretty effective in convincing us that we need all kinds of things.

Believe it or not, teenagers have a lot more spending money today than they ever did before. The problem is there’s so much more available to buy. 20 or 30 years ago, teenagers didn’t hang out at malls because there were hardly any malls around—and there was no Internet with thousands and thousands of cool things for sale. Today you can walk around the mall and see hundreds of items you’d like to have, all under one roof. You can find almost anything you can imagine on the Internet, and it’s all for sale.

When you consider the vast quantity of stuff available to buy compared to the amount of money you have to spend, it’s natural that your financial situation seems dismal. In this part of the book we’re going to talk about different ways to get some money. Although many teenagers get allowance, most don’t get as much as they’d like to, which is why so many teens have part-time jobs. In this chapter, however, we focus on the money you get at home.

It seems that everyone you talk to has a different opinion concerning allowance. Some families and financial advisors believe strongly that it’s important for kids and teens to receive regular allowances. Others feel it’s better to just hand over money when it’s needed. Many people think that allowance should be tied in with chores. Others say that doing chores is part of belonging to a family—not something for which family members should be paid.

Whereas adults have many strong opinions concerning allowance, some informal research on my part reveals that most teenagers have but two:

Let’s take a look at some of the common philosophies concerning allowance and why people feel the way they do about it. Understanding these different attitudes might help you get a better handle on why your parents do what they do concerning allowance. It also will make you more knowledgeable in case you want to talk to your folks about your allowance.

Giving money for chores done around the house is the most traditional form of allowance. Although it’s a common practice used in many homes, it’s fallen out of favor among many financial advisors and family counselors.

Some people feel that kids and teenagers should help around the house because they’re members of a family and all family members should happily contribute to the upkeep of the home without expecting to be paid for it. After all, they say, does a mother get paid for doing the family’s laundry or scrubbing out the toilets a couple of times a week? Does a father get paid for sweeping out the fireplace, fertilizing the lawn, and taking out the trash every Monday and Thursday nights? I don’t think so.

These no-allowance-for-chores advocates say teenagers should not get paid for making their beds; setting the table; folding and putting away laundry; keeping their shoes, books, empty soda cans, and underwear off of their bedroom floors; and so forth. They should do these chores willingly, happily, and without complaining, simply because they’re delighted to be a part of the family.

Yeah, right. I’m pretty sure there’s never been a time when teenagers whistled cheerfully as they emptied trash cans or smiled brightly as they mopped up the kitchen floor, thinking all the while how nice it is to be a member of a family. It sure didn’t happen when I was a teenager, and I see no sign of it happening in my own house.

In a perfect world, we all would be happy to do household chores. We’d appreciate the fact that we have toilets to clean, water to use to mop the floor, and the health to complete these tasks. Human nature being what it is, however, most of us don’t include chores on our lists of fun things we like to do when we have time.

I say if parents can wrangle chores out of teenagers with an allowance, go for it. After all, somebody’s got to empty the trash cans.

Another theory of allowance is to just give it with no strings attached. Teens who get allowance in this form aren’t really earning it; they’re just getting it.

Most parents, of course, expect their kids to be decent human beings. They expect that they won’t look out the window on a Saturday night and see a police officer escorting their son or daughter to the front door, or get frequent calls about outrageous behavior from school principals. Even no-strings-attached allowance could be in jeopardy if those sorts of things occur.

There are many critics of the no-strings allowance philosophy, but most parents who advocate it say they end up giving their kids money one way or another, so it might as well be in the form of an allowance. If you’re going to pass out $20 bills every other day for clothing and other items, why not just give a kid $80 at the beginning of the week and let him or her deal with it?

Using allowance to teach kids and teens how to manage their money is increasingly popular. The practice is applauded by many financial advisors who say it’s never too early to begin lessons in personal finances.

Parents sometimes set guidelines for the money they give. An example of such guidelines might be …

For instance, if Rob gets $50 a week, he could spend $30, put $15 into savings, and give $5 to some good cause such as an offering at church or synagogue or a local charity.

Each family has different ideas about how money should be used, of course, so the guidelines will vary greatly. A family that’s deeply committed to helping others might require that 30 or 40 percent of the allowance go to charitable causes. Another family that’s not tuned in to charitable efforts might not require that any money be given away.

The $30 that Rob has to spend becomes the crux of the financial management lesson. Out of that $30, he’s expected to pay for certain things. Of course, that list also will vary from family to family. Some parents might expect Rob to pay for his own lunches, snacks, movies, and even school supplies. Others figure that $30 probably is enough only for after-school snacks and incidentals at the mall.

Experts say parents should follow some rules to successfully use allowance to teach kids and teens about personal finances. They include the following:

Giving allowance for chores, just giving it with no strings attached, and giving allowance as a means of teaching money management are the three most common philosophies regarding pay for teens. Some families, however, don’t believe in allowance at all.

Some families don’t give any allowance, either because they can’t afford to or they don’t think it’s the right thing to do. A parent who responded anonymously to an online parents’ network sponsored by the University of California at Berkeley had this to say about allowance: “I don’t like giving an allowance. I prefer to have more control over the money and provide it for a chosen outfit or activity.” Another parent wrote, “I think no allowance is best. I give my kids money only if I feel okay about what they want to buy. If they want to choose what to spend money on, they have to earn it themselves.”

As you’ve no doubt figured out, the question of allowance is a family matter and must be decided within the family. Some families try them all before they find one that works for them.

You probably think the amount of allowance you should get can be summed up in one word: more. Many financial advisors suggest $1 for each year of life. So, you might get $16 a week, whereas your little brother gets $12. That doesn’t sound like very much, especially if you compare it with the figures from the Rand Youth Poll: $32 for teens between the ages of 13 and 15 and slightly more than $40 for those between 16 and 19.

What should you do if you get allowance but the money doesn’t begin to pay for all the stuff you need? First of all, know that many other teenagers feel the same way you do. We all know it’s a lot easier to spend money than it is to earn it—and everything seems to be costing more all the time.

If you think you need more allowance, take a minute to evaluate the situation. Do your parents normally increase your allowance every year? If so, and the current year is nearly over, you might just want to wait it out until you get your raise.

Has your family’s financial situation changed recently? If your dad lost his job three weeks ago, now probably is a really bad time to ask for more allowance. The time also might not be right if your parents just bought a new car or have broken ground for a new home.

However, if everything seems to be status quo and you’re not due for a raise soon, go ahead and ask for an increase. Remember, though, as with any time you ask for more pay, there are some guidelines you should follow.

There are entire books written on how to negotiate for a raise, much of which doesn’t apply to asking good old Mom and Dad for an increase in your allowance. However, some suggestions for negotiating might be of value when you get around to requesting an increase:

Your parents are sure to be impressed if you present your argument for more allowance in an organized and mature manner. They might be so pleased that they’ll give you a bigger raise than you’d hoped for.

If you’ve been asking for more allowance for three months and you haven’t seen a penny more, it might be time to forget about it for a while. Perhaps there are circumstances your parents aren’t telling you about that would make it difficult for you to get more allowance at this time. Maybe things are shaky at your dad’s work and he’s unsure about his future there. Many parents won’t share that sort of information with their teenagers because they don’t want to worry you.

Take what you can get for now, and wait a couple of months to begin another bout of negotiations.

Although it might not be as much as you’d like, allowance is probably the easiest money you receive.

The Least You Need to Know