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What To Do When a Teenager’s Tastes Turn Expensive
Somewhere along the line, the toddlers and youngsters that used to fill my house with noise grew up into preteens and teenagers. The toys they once yearned for and constantly played with have slowly been packed away and given to charities, and their tastes have changed. They now want gadgets — cellphones, tablets, higher-end PCs — and our oldest is yearning for a car in the near future.
While a small weekly allowance used to work great for helping them buy the occasional toy that they wanted, a few bucks a week doesn’t really get them to the point of being able to buy the things they want. Sarah and I don’t want to simply hand them fistfuls of cash, either. Should they get a job? What’s the solution?
The cost of teenagers
The USDA reports that the cost of raising an average American child from birth to adulthood adds up to $233,610. That’s a stunning number, but in our experience, it holds true. Having a child means having a larger house, having a bigger food bill, having clothing and educational expenses, buying gifts… it adds up surprisingly fast.
This really kicks in when they become teenagers. Expenses increase as a child ages, averaging $900 more per year for teenagers between 15–17 years of age. Why? Teenagers have higher food costs as well as transportation costs.
This is in line with my family’s experience as our children move into that age bracket. Our teens eat a lot of food, usually far more than Sarah or I do at our family dinner table. Our oldest in particular is very interested in a car and is regularly talking about plans that will result in him having one he can drive.
Teenagers’ spending habits
All of our children’s tastes have become more expensive. Each child has developed a hobby or two that’s also rather expensive. For example, my daughter is constantly drawing and seems to consume art supplies, and my oldest son is a competitive speed cuber, which requires a seemingly endless array of combination puzzles of different shapes and sizes.
This isn’t just my own teens, either. As this survey from Piper Sandler points out, the average American teenager spends $2,150 per year out of their own pocket on food and consumer goods. The survey also notes that both teen boys and girls spend a surprising amount on video games, particularly micro-transactions. Again, this matches my perspective, as my children socialize in part by playing social games with friends online while voice chatting with them and are willing to spend their allowance for better in-game features and appearances, usually with small individual purchases.
Should your teenager get a job?
For many, high school represents the first opportunity to find work outside the home, earning your own paycheck. This experience not only represents exposure to the real world of workplace responsibility, but also represents a vast increase in income, presenting new challenges to the budgeting skills learned from allowance earlier in life.
Should a high schooler have a job at all? It’s a mixed bag. A 2011 study in Developmental Psychology indicates that intense work experiences in high school actually result in worse outcomes later in life in terms of educational attainment and substance abuse. A 2010 study, this one in the The Journal of Educational Research, found that part-time jobs caused a small but statistically significant negative effect on grades and standardized test scores.
On the other hand, high schoolers who were paid for employment showed more agency and independence, as sociologist Jaylen Mortimer describes in a 2010 study. Although the temptation to earn money and get real-world experience can be strong for high schoolers, responsible parents should put some limits on employment, particularly during the school year.
Another advantage to getting a job is that it offers a high school student a chance to get their first checking account and debit card. Although this step can be taken without a job, having a regular job gives your child an opportunity to see cash flow at work in their life, as money comes in from work and leaves in the form of paying bills and expenses.
So, what’s the right call? A balanced approach is probably the right one, starting with thinking about your child’s focus. If your child is focused heavily on academics and extracurriculars, don’t push a job on top of that. Consider continuing and raising an allowance, and look for opportunities for larger paid chores at home beyond their normal expected chores. On the other hand, if your child desires independence, a job may be a good move, but strongly limit work hours during the academic year.
For our oldest child, he has expressed some interest in having a summer job, but has said that he prioritizes grades and getting into a good engineering school above spending money. This is an approach we support for him.
Teaching your teenager about credit and personal finance
As teenagers gain more control over their own spending and finances, and as they approach college, the stage begins to be naturally set for their first lessons in credit and personal finance. Establishing good credit early makes it easier for them to make financial moves during and after college, and having good financial habits will serve them throughout life.
Along with that comes a greater need for the basics of personal finance. Things such as having a checking account, paying bills, and doing basic budgeting become possible during the teen years, and under your wing, they become a great learning environment for personal finance. Let’s look at some options.
Adding your teen as an authorized user on your credit card
One good approach is to simply add your teenager as an authorized user to your card. This lets them build credit in a very controlled way and allows you to easily review every purchase they make. This involves trust and setting clear limits on its use so that you don’t wind up with a bunch of unwanted expenses.
- Pros: It’s simple, it gives you good control over their card use if you pay attention and it can improve their credit, provided the card issuer reports credit habits to the credit bureaus.
- Cons: It presents financial risk to you.
Giving your teen their own credit card
If they are at least 18, they can get their own card. Likely, your child would only be eligible for a card with a relatively small credit limit, so to ensure they build good credit, they need to keep a low utilization ratio (only use a small part of their available credit). Heads up that while they are under 21, they have to have their own source of income to get their own credit card, per the CARD Act of 2009.
- Pros: It lets your child explore an additional degree of independence; used smartly, it can help greatly with credit.
- Cons: Your child can damage their credit with excessive debt and late payments.
Signing your teen up for a checking account
A checking account is a good step if your teen has consistent income from a job or some other source and also has consistent bills to pay. It’s easy to sign your child up for an account through a local bank, too.
- Pros: Knowing how to use a checking account is a good fundamental finance skill.
- Cons: It’s not particularly useful if they don’t have consistent income and consistent expenses, so this may only be useful for older teens. Also, a checking account won’t help with credit-building.
Making smart spending choices
One final strategy that has worked extremely well in our household has been frank discussions about spending. While it’s useful to ask whether a purchase makes sense in the heat of the moment, consider a later review of expenses. For example, if your teen is excited to spend money on a particular purchase, let them do so, but then mention that expense a month later and ask if they were still happy with it.
You can even make this systematic if they use a debit card or credit card for their expenses. Sit down and go through each expense, considering which ones feel silly now and which ones still seem like a good idea. Then, teach them how to put an idea for something they want aside on a “gift list,” so that they felt like they took action on the impulse without giving in and spending money on it.
- Pros: Creates money conversations, teaches good strategies for smart spending choices.
- Cons: Can cause pushback, works best with thoughtful reflective teens.
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