Learning how to manage money is an important step for any teen. Kids with learning and attention issues may face special challenges. That’s particularly true if they struggle with math, organization or writing.
Knowing what skills your child will need is the first step to helping her. Being aware of potential obstacles is also key. Bear in mind how your child learns best. You can help her apply strategies she’s already figured out for schoolwork to money management.
Tracking Income and Spending
The most basic rule of money management: Don’t spend more than you earn. So you have to know how much you spend and how much you earn.
Here’s an approach your teen can follow. If she has trouble with math, she may want to use a calculator or work on a computer spreadsheet. And if writing is an issue, it may help to use a computer with speech recognition software.
- Track income. Ask your teen to record the amount of money she earns every day for a month. This can include her allowance, money from babysitting or wages from a part-time job. If she has a job that pays an hourly wage, help her figure out her take-home (after-tax) pay.
- Track spending. During that month, ask her to note what she spends each day, too. This includes money for clothes, movies and apps. It also includes weekly and monthly costs she might be responsible for, like gas money and car insurance.
- Subtract spending from income. At the end of the month, have her subtract the total amount she spent from her total income. If she’s earning more than she spends—great. Otherwise, she’ll need to look back at her expenses to decide where she can cut back in the next month.
Setting and Sticking to a Budget
Many kids have trouble spending less than they earn. Kids with impulsivity issues may be especially tempted to overspend. One way to reduce the risk: Help your teen create a system.
Every month, help your teen figure out what her expenses will be, and mark an envelope for each one. She might have envelopes for gas money, choir dues and college savings, for example.
After those are done, she might add a few more envelopes for things she wants. These could include a birthday present for her boyfriend, for example, or a trip to the amusement park.
Help your teen identify which envelopes she must have money for—like transportation to school. And help her figure out which she can take money out of if she runs low elsewhere.
Next, have her count out the money she’ll earn that month. (If it’s not practical for her to use the real money, she can use Monopoly money.) Ask her to put as much money as she’ll need in each of the envelopes.
If there’s any money left over, she can create a savings envelope. And if she’s short, she’ll have to reconsider some of her “fun” envelopes. As the month progresses, she can take money out of each envelope as she spends it. Then, at the end of the month, she’ll know where she under- and overestimated.
“Learning how to save over time is essential to your teen’s financial future.”
Having the envelopes physically in front of her can make spending and saving feel more real to your teen. That’s especially true for kids whose primary learning strength is something other than reading.
Working Toward a Savings Goal
Learning how to save over time is essential to your teen’s financial future. Help her come up with a worthwhile goal to save for. That could be a computer, a car or a summer trip with friends.
Next, help her set a time frame and figure out how much she’ll need to save each month to reach her goal. If she has organization issues or tends to be impulsive, you can help her set aside that money once a month, maybe in a special account.
Whether she sets aside $5 a month or $100, the process will help her learn how to plan and save. And having a payoff down the line can provide real incentive to stay on track.
Setting Up a Bank Account
As an adult, your child will need to manage her own checking account. To get her started, choose a bank that offers free checking accounts and free or low-fee ATM transactions. Go to the bank together and ask a staff member to explain to your teen how the account works.
Learning to handle a checking account may be a challenge. That’s especially true for a kid who has trouble with organization, math or writing. But let your child know that having an account can actually make managing money easier. And there are workarounds for every issue.
Most banks have online tools and apps that can take the writing (and the math) out of balancing a checkbook. And many have phone numbers you can dial to hear your deposits and withdrawals read aloud by a computer.
The bank may also have options for automatic payments. And most offer linked savings accounts, which can help your child be sure that her bills get paid and her saving stays on track.
Managing money is a skill your teen needs to start living independently. She’ll use what you help her learn now for the rest of her life.