Turn Your Teen's Allowance into Profit Sharing
Parents are always looking for ways to justify the allowance they pay their kids. Sure, it’s usually tied to a list of chores that may or may not get done. Why not make your kids partners in the family budget, and give them a valuable lesson in financial responsibility at the same time? First, you need to make the budget a family affair. With everyone seated around the table, construct a budget for family expenditures including food, entertainment, travel, clothing, allowance, personal expenses, home maintenance, etc. Then, point out the items in which the kids can have an impact in their ability to save on expenses.
At the end of the month, if the family realizes a surplus, a percent of the excess cash flow can be paid out as a bonus. To really drive the point home, a budget loss could result in a reduction in allowance (although some parents may think that too harsh). You will soon find your teens shopping at cheaper clothing stores, buying generic brands, cutting back on car rides, and turning off the lights at night.