by Ann Marie Dwyer

Created on: October 16, 2007

Learning about earning and paying is a lesson that cannot come too soon for a teenager. I have found the best way to teach money discipline was to open an account in "Bank Mom".

When my teens got their first jobs, they brought their checks to me. I "deposited" the money into their computer checking account. They wrote their withdrawals into a blank check register I had given them. I had explained how to balance a checkbook.

Every time they spent (had money from my wallet), I debited their accounts. Soon, they began to see the correlation between "movie money" and the hours that had to be worked to earn the money. Their first NSF fees taught them that overdrawing is not only bad for the budget, but bad for their credit. "Bank Mom" does not pay interest (allowance) for 30 days on overdrawn accounts. "Bank Mom" also does not lend money to persons with overdrawn accounts. One or two loans from their loan shark uncle (who is the same age) taught them how expensive borrowing money could be.

By seventeen, it was time to try it for real. I gave them the option of checks with or without a debit card. The oldest wanted that debit card. After her first NSF fees, she cut the card into pieces that would slip through a strainer. She has sworn off credit cards of all types. Now she is content to write a check for her insurance and purchase postage stamps from change in her wallet to mail it on time.

Our next learned from her sister. She meticulously balanced her checkbook every time she wrote a check, and at the end of each page, ciphered with a calculator to be certain she had not made a mistake. She now has her first credit card, but keeps a check register in her purse to balance her card after each purchase. She has already learned to keep 10% of her balance available for such things as annual fees, interest, insurance and finance charges.

Both have been bombarded with credit card offers and loan offers from various banks and finance companies. Fortunately for us, they have politely shredded such junk mail. Both have learned to manage money. Like every lesson your child will learn, some will have to be learned the hard way. At the end of the day, knowing that they are keeping their credit safe helps us sleep better.

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