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Ask Dave

Teens And Checkbooks

Suzanne has a 15-year-old daughter, and she's been on commission for years. She just got her first checking account. What bills should Suzanne assign her to pay on her own?

QUESTION: Suzanne in Los Angeles has a 15-year-old daughter, and she’s been on commission for years. She participates in a lot of extracurricular activities, so Suzanne has discouraged her from a part-time job. She just got her first checking account. What bills should Suzanne assign her to pay on her own?

ANSWER: This is exactly what we did with our kids. I think you’re very wise. I think it’s a great idea. What I would do is just test her competency. This is a bright kid, and her mind moves a thousand miles an hour along with her body. She’s just into everything. You want her to slow down enough to do the details and be competent with what you’ve given her so far. The next step is for her to balance the checkbook with you looking over her shoulder. The next thing I want you to do is to stand over her shoulder and watch her do it several months, and then I want her to do it and come get you and show you that she’s done it. Her balance should match yours and the bank.

As soon as she gives you a comfort level with her competency, I want you to start taking the clothing budget and putting it in her account. I had the weirdest thing happen with our girls. When I took the money that we had allocated for their clothes and I put it in their checking accounts, they started shopping at Old Navy instead of Gap. It’s amazing when they see that money is finite and that there are actual dollars associated with these purchases and that it’s going to run out. It’s amazing how they make different value choices.

If you’ll do this very carefully, I will tell you this. I had one daughter go from high school all the way through high school and all the way through college and never bounced a check—and never called me for money while she was in college. The allocated amount monthly for college was enough. She lived on that. The second one was the same thing. She did bounce a check or two at the start. We fixed that. I made her go apologize to the banker. My son is a math nerd like I am, and so he just thoroughly enjoyed the whole process. He’s in college now, and he calls me up and tells me something that’s going on with the checking account. It’s just a level of competency. Just like driving a car, you don’t send them from Los Angeles to Florida the first week after they get their license. You let them go to the corner market and back. The more they exhibit confidence, the more you release them—the longer a rope you give them to run with. I think what you’re doing is exactly the way to train a child.