4 containers such as mason jars and some way of labelling each container.
Many teenagers—in fact many adults—do not have a good sense as to how they use their money. Young people often think almost entirely about “spending money” and not much time about its other uses. It is important for young people to start to learn about where their money is going so that they can take more control over how they use it and manage it better. It is also important to know about the different uses of money—and think about the importance of each—and how they can better control the use of their money over the years to come.
- Talk with your child about what they did with their money over the last month. Do they remember? Do they know how much money they spent—or what they spent it on?
- You can present the following as a “challenge” to them—“How good are they at knowing how they use their money?” Ask them to name the major “categories” of things they spend their money on—and write those on a list.
- Ask them to then guess what percentage of their money they spend on each of those categories. Ask them if they think they are currently using their money the way they really want to.
- Tell them that many, if not most, people do not really know where their money goes—therefore they often don’t manage it well. Talk about how it is wise to “track” expenses and spending to know where your money is going. This can help avoid problems—and also help make sure you use your money as you really want to.
- You can then talk about the four main uses of money.
- See the “Four Bank System” that can be found at http://www.themint.org/parents/4-bank-system.html. Talk with your child about whether they would like to try something like this. If so, you can either try the activity as described or create your own variation. Your child may want to run this, or a similar experiment over the next few months, using a system to take better control over how they use their money.
- At the end of the time period, talk about the contents of each container and the decisions your child has made about how to use his or her money.
- If possible, you could consider a financial reward to them for accomplishing this task and they could decide into which container that reward would go.
FOLLOW UP IDEAS:
- You could help your daughter or son decide how they would invest the money found in the investment container and they could decide what they would do with the money in the giving bank.