by Nicole Selley

Created on: July 10, 2009   Last Updated: July 14, 2009

"Money doesn't grow on trees." How often did we all hear this sentence as children. My parents shared a strong belief that you had to work hard for your money to truly enjoy it. And that it was important for us kids to understand this and to learn the meaning of money early on.

If you have teenage kids, you are probably often faced with the same dilemma. Of course you want to give them the best you can afford. But are you doing them a favour by not teaching them that money doesn't come from bottomless pockets? By not forcing them to learn sensible spending habits? And how do you go about once you decided that your teens need to change their spending habits?

No one likes change, and certainly not if it has a negative impact on your current live. That's no different to teenagers and changing their spending habits certainly will seem a negative turn in their books. So above all, you need to be sensible about the change. You don't want to suddenly cut them off, but make them become more realistic about money and understand it's true value.

The best way you can do this is by appealing to their perpetual desire to be and to be treated as a grown-up. And then you need to consider the two main areas that contribute to peoples ability to change their relationship with money: Understanding how they get it (and how hard that can be) and understanding how much things cost.

You should sit together with your teenage kids and tell them that you believe they are old enough and sensible enough to be given more responsibility over their live and money. If you can afford (and are happy to) for them to continue spending what they currently do, you should draw up their current spending pattern - show them how much money you give to them every month for their various expenses.

Once that's done, explain that you'd like to open a small bank account for them (you might want to prefer using one without credit card or overdraft facilities for your own confidence) and that you will transfer the exact amount (or an amount that you consider reasonable if they currently spend too much) into their account. They can spend it any way they like. But you have to make it abundantly clear that this is all there is and what they are expected to pay for from this money, such as school books, cinema, outings with friends. You should also give them a breakdown how much they are likely to spend on each area so they know what to expect. You might even want to get them to pay their part of the electricity

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