Teens and Money: Too Busy to Earn? But Not too Busy to Learn

We want our North Shore teenagers to work in the summer for many reasons—work ethic, sense of accomplishment, money management skills and mostly to keep them from constantly asking us for money.

But not every teen has a schedule that allows for paid employment. From summer school to sports teams, a lot of our children have schedules that aren’t attractive to the pools, beaches, concession stands and camps that hire teenagers. Other teens are interested in pursuing a passion or exploring a career, and while they’re lucky to get an internship at a downtown theater or on a political campaign, it’s providing an experience but not a paycheck.

If your child’s chances of a paying summer job seem slim, you can still make sure he or she learns the lessons a job teaches; you just have to be creative.

The Intern
Sam Rodman, a junior at New Trier, is interested in sports marketing and he worked hard this past summer to land an internship with the WNBA Chicago Sky. His job with the marketing department, meant taking the train downtown each day and incurring all the expenses of a downtown job, without any salary to offset them.

“We made his internship possible with a stipend,” says his mother, Mimi Rodman. “We figured out a weekly amount that would cover the train and lunches out.” She adds that Sam quickly figured out it was much smarter to bring his lunch from home and keep the extra money rather than pay for lunch out every day. For the rest of his spending money, Sam umpired softball games, a flexible summer job he’s kept for several years.

The Volunteer
Two baseball teams—one of them travel—was the problem for another North Shore teen when he looked for a summer job. He found something very part-time, according to his mother, but it was less than six hours a week and unlikely to pay enough to cover his summer spending.

His parents offered him the option to volunteer for a community service organization that needed help and was willing to accommodate his schedule. He did everything from unloading boxes to  helping in the office. He kept track of his hours, but gave his timesheet to his parents not his employer.

“We paid him $10 an hour,” says his mother. “It was a nice round number and it gave him the experience of being in the working world, while still giving back to his community.”

The Babysitter
Ilene Hechtman’s daughter is a high school freshman and babysits, but doesn’t earn enough to cover all of her expenses, so Hechtman found that they were arguing about little items.

“I was getting annoyed about the nickel and diming that was going on. I felt like everywhere we went, she wanted something,” she says.

So Hechtman and her daughter sat down and made a list of everything her daughter would be responsible for: clothes, entertainment, meals out with her friends. Then they added it up and agreed on a monthly amount that Hechtman would deposit in her daughter’s checking account.

Her daughter uses a debit card to make purchases and withdraw money. To make sure the account can’t be overdrawn, the checking account is linked to her daughter’s savings account.

Wendy Schenker, director of marketing for Lake Forest Bank & Trust, frequently talks to parents and teens about money. And she reminds parents that debit cards can be tricky because of the overdraft fees. Teens frequently don’t monitor accounts as closely as we might like them to, and the fees can add up.

A system like Hechtman has set up, with a savings account as a cushion, is one way to ensure your child doesn’t learn the hard way that “overdraft” means out of money.

The Chance to Make Mistakes
Ironically, the best part of watching your child earn and spend money is knowing that he or she will make mistakes and will learn because of them. That’s what adolescence is for, according at Madeline Levine, Ph.D., who writes in The Price of Privilege, “(You want) to provide teenagers with as many opportunities as possible to make their own decisions and learn from the consequences. . . Sometimes the best foot is the one that is stumbled on, providing an opportunity for the child to learn how to regain balance and right himself.”

Hechtman would agree that her daughter’s responsibility and freedom have been positive. Not because her daughter has made many mistakes, but because their system lessens the typical parent/child power struggles.

“Now that it’s her money, she’s much more conscious of what things cost. Suddenly the label isn’t as important,” says Hechtman talking about her daughter’s shopping habits.

Your child may be able to get this experience on his or her own through a traditional summer job, but if that’s not a possibility, you can still make sure your teen has a chance to work, earn money and manage money. Best part, no more “Can I have $20 for the movies?”

Ready to head to the bank?

Setting up the Account
The first place to look when you’re setting up a checking account for a teen is your bank. North Shore Community Bank—and many others—will give a child a free account as long as the parent has an account.

What to Get
Basic checking with a debit card for starters. If your teen has savings, that account should be at the same bank and linked to the checking account. Skip the pricey overdraft protection, but make sure you and your child have online access to regularly check the balance.

Credit or Debit
Consider adding a credit card if your child will be making online purchases. Credit cards protect purchasers from liability and fraud, but debit cards don’t have the same safeguards. Your child can get a credit card with a limited credit line or your can purchase a pre-paid credit card. Talk to your bank officer about the options and pitfalls.

You May Want to Read:

The Teenager's Guide to Money
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The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of
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