What will your teenager be doing this summer? Going with you and the family on a long-awaited vacation? Working at a summer job until September? Just hanging out at home because he's not legally old enough to get a job? That's what my son will be doing, but this year, his vacation isn't going to be all play and no work. He's going to learn a very important skill before the summer is over; he's going to learn the basics of managing a check book.
We all tend to go a little crazy as our teens approach adulthood. We worry about getting our teens the best academic education we can, getting them into college or trade school, and of course, keeping them out of trouble in the form of sexually transmitted diseases and unwanted pregnancies. But in the interests of trying to help our kids in these areas, one often gets overlooked. That is the critical arena of money management. It makes little sense to have a high-school graduate who may have scored straight "A's" on all their required subjects but hasn't got a clue how to maintain a check book. Giving a college freshman a credit card, with no education or firm instructions on how it should be handled, is the financial equivalent of giving a loaded gun to a kid who has never had firearms training. In both cases, it is a recipe for disaster.
Where Do You Start?
There are two ways to undertake this project, and the choice you make is up to you. If losing real money is a concern for you, you might want to hold off on taking your son – or daughter – to the bank and opening up a checking account. Until your teen has a firm grasp of how to manage a check book, you can make this more of a "life skills" project instead. Get a three-ring binder for the copies of transaction records and real checks. You can make several blank copies of your checking account register, punch them, and put them in first. Then you can take three of your checks – after voiding them in your own check book – and paste them onto one sheet of paper for copying. Make about ten copies to begin with, since this will give you a total of thirty "checks."
Now what, you may ask. This is where you have to be a little creative. If you have saved any of your teen's past math assignments, you might want to look at the ones dealing with word problems. You remember those; "if John has six apples, and gives two apples to Mary, how many apples does John now have?" You subtract two from six to arrive at four. Basically, this is a word problem too, only this one will be ongoing, just like managing a real check book is. The best part of this project is that there are only two math functions to deal with; addition and subtraction. No multiplication or division required.
After you get the binder set up, you can write out what your teen has to do in terms of making deposits, withdrawals and payments. Again, there are several ways to do this. One may be to have your teen create a "real life" situation, where he's just graduated from college, and found a great job and a new apartment. He's ready to move out. And guess what; you get to play "the boss." Which means you get to decide how much his "salary" is, and what bills he has to pay to maintain that apartment. To make it easier in the beginning, break the salary into two monthly deposits. Some companies have fixed pay dates each month, others pay their employees every other week. Let's go with fixed pay dates for this project.
For many people, their first paycheck is also their first deposit into their checking account. Since this is just an exercise, start with an amount of $1,000. You can write up the first "word problem" as follows: "(teen's name) just received a paycheck for $1,000. Deposit this amount into the register." If he's unsure about how to do this, show him your own check book as an example, but have him write in all the information himself, using $1,000 as assigned. Write separate transactions for paying rent, electric, telephone, cell phone (if desired), and transportation or gas, again writing them as word problems. You get to decide the amounts, and show him one or two of your cancelled checks so he can make the entries onto both the "transaction record" and each "check" himself. Just make sure you don't make the amounts too high. You want him to have a decent amount left over to help him plan his future spending.
Although the book How To Get Out Of Debt, Stay Out of Debt And Live Prosperously by author Jerrold Mundis was written primarily to help people out of the black pit of credit card debt, it is also an excellent tool for helping both teens and adults avoid that trap before they fall in. As someone who has "been there, done that" with debt, it would have saved me years of financial mistakes had I read it much sooner. My copy of the paperback version cost only $6.99 at my local Border's. In Chapter Eight, Mundis gives you the best tool you can get; the spending record. It is broken down into a daily, weekly and monthly list of spending transactions, and the category of each. If you want to help your teen to not only learn to manage a check book, but also to know where his money is going, adding a spending category to each transaction is essential to accomplishing your goal. And this book is your best resource for helping him reach it.
Whether you have your teen create an imaginary situation, or if you just want him to get into the important and useful habit of recording each of his financial transactions into the transaction record and onto a separate check, teaching him how to manage a check book now is vital to his success with money in the future. Without having a solid financial education to start with, the odds of him ending up with huge amounts of credit card debt are much higher. Teens have enough traps in their lives to worry about. Let's keep them out of this one.