The other day, I went to the mall to use my coupon at Bath and Body Works and I saw a group of 13 to 16 year old teens carrying 4-5 shopping bags each from either Victoria Secret, Sephora, Hollister and Fashion 21!
Wow...is TN the new Orange County where teens' pockets are loaded with shopping money? As I turned right towards the food court ..surprise, surprise....another group of wannabe NYC Prep teens, and this time with bags after bags from Banana Republic, Guess and American Eagle! Wow...is TN the new oil money or are these girls just wasting some serious money?
So far, we are fortunate that our attempt to live below our means is embraced by our teens. The girls have earned serious cash from Dr. D hubby's gifts, chores and perks ...and yes...we also drag them to the mall so they can hang out and spend their stash. However, the concept of keeping their money in the bank and placing cash in tin cans seems to be more attractive to them.
Do they ever shop? Of course..but one pattern I notice is if it goes beyond $15, they will ask approval from us before they proceed to the cash register. So you may wonder ...what are we feeding them that they have this mindset of holding on to their wealth? Here's what:
1. PAY FOR SALARY: When other parents call it allowance, Dr D and I call it "salary". Similar to an employee getting a paycheck on a monthly basis, we set up a system where we pay a fixed amount each month based on standard chores (i.e. cleaning their room, garbage, swiffer duties). This concept taught them that money is earned through hard work and dedication and like normal employees, same rules apply - -no work, no pay!
2. PAY FOR BONUS: When others will call it free shopping money, we call it "bonus". Bonus equates to excellent job performance! We pay for bonus based on grades reflected in the quarterly report card. An "A" is worth $5, "B" is $3 and C "don't even bother explaining". Their job at this age is to study, therefore if they exceeded performance on the job required ..they will get a bonus.The good side, they are motivated to aim for higher grades and be
focused on getting their parents bankrupt every quarter as everybody
are straight A's.
3. JUST CELEBRATE: When others will wait for a birthday/christmas for a surprise, our habit of purchasing their gadgets is staggered throughout the year. New computer, new Ipods, new shoes, new guitar, new amplifier etc etc. - -no one knows what the UPS guy is bringing today. The problem is, if you ask them what they want for Christmas - -they will constantly say "Nothing".
4. PAY PER SERVICE: When others will ask for help on task, we "pay for services" on small task beyond their regular chores. $5/car on carwash, $1/shirt to help mom on ironing , $15 - $20 to help dad on weed-wacker. Never ask "who wants to help me?" ...as everybody will be fighting to be the one to do it! The good thing: They learn how to haggle and negotiate on pricing. Great skills!
5. EXPLAIN BENEFIT OF LONG TERM SAVINGS: After each girl had their first $100 earning, a savings account was immediately opened. We explained the concept of compounding and long term savings and how saving money today can help them tomorrow. So far we have been consistent with our visits to the bank on a quarterly basis, where 50-70% of amount they earned are deposited to their account. The continuous reminder on credit and debit is also apparent as we let them balance their account in every transaction. The good thing: They tend to be more focused on setting long term goals (and A in Accounting class).
6. SET SHOPPING SCHEDULES: There are three shop till you drop periods that we follow: School shopping with daddy, winter clearance and early summer shopping with mom. Planning is imperative if they want all their personal paraphernalia charged to Dad/Mom's credit card...so they really make sure to fill their shopping carts. The good thing: They don't have the shopping urge when they are in the mall as the idea of making mom/dad bankrupt again is more fun than wasting their own money.
7. EXTEND MONEY'S WORTH: We exposed them to researching online and gather more information as to where to find deals to stretch their dollar. On some items, we make them wait for additional 2-3 weeks before the actual purchase in the event that the item will be place on sale or on clearance.
Simple tactics on how we teach teens the value of money: EMPHASIZE the importance of money, SHOW them how to save money, REPEATEDLY tell them why to save money , GUIDE them where to earn money and FIND ways together to save money!
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