This guest post is from Anna Weisend. Anna is a self- employed pastry chef and sugar artist with multiple streams of income, but her favorite job is the one that she doesn’t get paid for: being a mom!

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Regardless of their parent’s income level, every child thinks that money magically comes out of an ATM with a bottomless pit. As a mom with two teenage daughters, I have found that when the moms congregate, this is a popular topic of conversation. My oldest is about to turn 20. She is in college and will be moving out of the dorm and into her own apartment. She is doing fairly well with her personal finances, so I’d like to share the strategies that are working for our family.

I find it impossible to teach my children about money without intertwining it with responsibility and our values. I also find when teaching kids about almost anything, it is best to start early, in small doses and in age-appropriate ways. So, my husband and I made a plan that fit the criteria for our responsibilities, priorities and values. As with everything else in child-rearing, I highly recommend that spouses come to an agreement about this so your children don’t get confused or become manipulators. They are way better at this than you think.

The first thing we taught our children was a financial “No.” As in “No, you may not have something every time we go into a store” and “No, we will not buy one just because so-and-so has one.”  Next, it was letting them pay for something small in the store so they could equate having to pay for things that we needed. Then, it graduated to letting them spend some of their monetary gifts for things that they wanted and opening a savings account with the rest.

When it came to gift giving for Christmas and their birthdays, we kept it modest. We found no good reason for excess. We had witnessed in our social circles that those who were the most indulged were also the most ungrateful and rude. We wanted to make sure that we did not create any sort of entitlement mentality. That was not the kind of child we wanted in our home. We feel it worked. We’ve been told that our children are more grateful than the average kids. That was the goal we were working for.

Chores: To pay, or not to pay

We never gave our children an allowance for chores; we felt that this was just a function of being part of a family. On occasion, however, if one of the girls wanted something special, we would tie it to some extra work above and beyond their regular chore list. This way, they could get a taste of working for something they wanted. It was usually a difficult and unpleasant task to them, so they could weigh if that item was really worth it.

Occasionally, you will get an unexpected opportunity.  When my oldest was 9 years old, she saw something on TV about a charitable organization to which she wanted to contribute. It was her idea to start a business making and selling jewelry. My husband and I invested $15. She sold enough in our neighborhood to repay us and donate $50. She had met her goal and so promptly closed her business. She got to learn about commerce and giving at a level she could understand. This won’t be the case for every kid, but when serendipity throws something in your lap, take advantage!

When they got to middle school, we took their financial education to the next level. At this point, they were given a clothing allowance, and they had to stay within that amount. They got half of it in August before school started and the other half in the spring. While still in middle school, I would go along with them to help guide their choices and show them the ins and outs of sales and coupons. In high school, they were allowed to go without me and shop with their friends, but they still had to stay within the budget. This is when the hardest part came – letting them live with their choices.

And what choices they made!

Our oldest managed well with what she was given, but the younger one had some issues. I practically needed to duct tape my mouth shut when she chose to spend $50 on a pair of sweatpants with the name of the store sewn on the butt. We had given her $150, so this decision, of course, left her with a limited wardrobe. We were strong and didn’t cave when she complained that she only had two pairs of pants (including those awesome sweatpants) to her name. Despite the firestorm in my brain, I kept my comments to myself (well, most of them). Not surprisingly, she did a little better the next time around.

When they started earning money (a job by the age of 16 is mandatory in our house), we required them to put half of the money in an account that was earmarked for college and untouchable. While we thought it was important to teach them about saving, the reason that we only made them put half away was so that they could learn how to spend, too. We felt it was important for them to make mistakes with their money when the purchases weren’t large or critical, and while they still had a safety net. It’s amazing how much a little buyer’s remorse can impact a teen. With employment, they were also required to pay for their cell phone usage, their entertainment costs, and their portion of the car insurance. After all, with privileges comes responsibility.

Additionally, when they were freshmen in high school, we had them sit with us during a bill-paying session to show them just how much our lifestyle cost. They were most impressed with our income, since anything more than minimum wage is impressive at the age of 14. They were subsequently horrified by the price of things like the house payment, the cable bill, the gas bill. They were surprised that we had to – gasp! — pay for someone to haul away our garbage, and perhaps most of all, that there wasn’t much money left at the end of the month. Some of our friends questioned us because they felt we were burdening our kids. First, we only did this once so they could have the big picture. Second, we felt it was good to be honest. It gave them something a little more solid than just the standard “We can’t afford it” response when they wanted something out of the budget. No child was harmed or put upon during this process.

Put it in writing

We found that putting things in writing was a successful way to avoid conflict. We put their monthly charges and responsibilities on paper and had them initial it. This came in handy when they returned and tried to convince us, “That isn’t what you said.” We also used this technique to come up with a document called “The House Rules.”  Due to some pretty hefty and continuous medical expenses, we knew early on we couldn’t pay for college. We made it clear to the girls that this was going to have to be their responsibility. The House Rules outlined what we would and would not pay for once they graduated high school. If they enrolled in college, we would continue to pay for certain things. If they chose not to move on to higher education, then they knew they would be paying us room and board, if they remained at home.

We hoped this would ensure that they are prepared and there are no surprises. We know too many young people whose parents said, “We will help out as much as we can,” and they heard, “We are going to pay for all your college expenses while you sit in the dorm room and party.” It is good to be specific so they are not blindsided. Besides, isn’t it better to under-promise and over-deliver? After all, what child is not going to be overjoyed when Mom and Dad fork over extra money?

With one child through this system and one running for the finish line, it seems to have worked well. It is important to note that God’s ultimate joke on parents is that each child is completely different. This is extremely apparent in our house, and it has been a lesson in patience for us to let each daughter learn at her own speed and address her own unique personality and circumstances. We realize it doesn’t end here, either. Our oldest still consults us and is now getting her first job with a 401((k). We’ll need to continue to pass knowledge on. Hopefully, we will do it well.

Reminder: This is a story from one of your fellow readers. Please be nice. It can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer and is just learning about money like you are. Unduly nasty comments on readers stories will be removed.

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