Under the Median: My Teen Took Over Our Budget!

Six years ago we allowed our teen to take over our family budget! Today, I want to share with you, my readers, how this experiment worked out for us. Did I raise fiscally responsible young adults? Do they understand that "cash is king"? Do they quote Dave Ramsey to their friends? Read on! You'll learn why our children are not allowed to graduate from high school until they have handled our family finances for six months and what they learned from the whole experience. At the end I'll tell you how this impacted the lives of our oldest children.

My husband and I have been using (and sticking to) a written budget for our entire married life - 30 years! We have experienced the peace that comes from living debt-free — including our home — since 1998! In 2012 we decided it was time to make finances and budgeting “real” for our oldest son. He was 16 at the time. We put him in charge of our family finances for six months! That’s right. He took it over “lock, stock, and barrel and I think it was an experience that he will never forget.

If you’d like to get your teens more involved and aware of real-life finances, here are a few tips that helped us.

Give Them Credit

I admit, this has a dual meaning. We homeschool. So, it was natural for us to offer our son high school credit for his foray into the world of finances. But, I also mean, that we need to give our children credit for being mature enough to learn real world, life-long lessons by taking an in-depth look at our family’s money.

I was actually afraid that the whole experience would take away some of my son’s innocence. He would learn just how hard it can be to “make it” on one income. I wanted to be sure that he retained his feeling of security. We don’t want our children to worry that “Mom and Dad won’t have enough money”.

Give Them Advice

Within the first week he was looking at me wide-eyed. "Mom, it looks to me like every penny is accounted for in this budget. Is there any money left over at the end of the month?" Three weeks later he was emoting about the grocery budget, "Mom, is this correct?! We have just $35 left for groceries??!!" I answered his initial inquiry. "No, there is generally no extra money." His second question resulted in him being directed to the row of cookbooks in the basement, where he was instructed to match up recipes with ingredients already available in the house.

To my surprise, rather than becoming overly concerned about money (or the lack thereof), quite the opposite occurred. As the weeks went by he began to give praise to God each time he saw a need being met. He became aware of how much money it took to raise a houseful of boys. We had many conversations about how to save money on every single budget category. He had a blast! He clipped coupons, scoured the ads, and found bargains. He planned the grocery shopping and the menus. He totaled up those numbers and adopted my victory shout. "Yes!!!!! Mom! We made it through the month and there is money to spare!"

Give Them Tools

We began this process by enrolling our son in a six-week money management course, which we attended with him. This gave him a lot of Biblically-based knowledge about money principles in a logical and sequential manner.

We then set out to show him practical examples of how to make your money work for you. On the Crown.org website, I showed our son that if he saved $450 a month, at 5% interest annually, he could purchase a $120,000 home for cash at the end of 15 years. If you multiply $450 by 15 years you get $81,000. That's right! Your total investment: just $81,000. The rest of that $120,000 is earned interest!

Then, we used the tools to see how much interest you would pay on a $120,000 mortgage. The interest on a 15-year, $120, 000 mortgage at 5 percent is about $50,000. Add the principle and you would pay about $170,00 for that same home. For a 30 year mortgage, the interest is nearly $112,000. (or $232,000 total loan repayment!)

Boom! He could immediately see that there is a HUGE difference between paying cash for purchases and taking out a loan! I LOVE on-line calculators to show kids real examples about money. Let them put in their own savings goals and amounts. They’ll begin to understand the importance of delayed gratification and long-term goals. Here's the tool we used to calculate this monetary magic. http://www.crown.org/FindHelp/Personal/Calculators/savingsgoal.aspx.

Give Them the Reins

Let them do it! After the money management class, I opened up our finance books to our son. When a bill came in, he told me how to fill in the check (or make the transaction on-line) and entered the amount in the proper part of our household ledger.

He entered all of our expenses into the ledger, kept track of each category, made a spread sheet at the end of each month showing what we spent in each category and what we averaged thus far for the year. He also made recommendations on what changes we needed to make in each category – if any.

When we began this project, I knew I wanted our son to take on our finances for at least six months so he could see seasonal fluctuations. I also was fairly confident that something unexpected would happen within that time frame — so he would get to see the emergency fund at work. It did! He accidentally hit the garage door while I was teaching him to park in the driveway. 😁 This would be why my husband has taught the lad to drive and not me.

Give Them a Goal

Our son’s final task was to look at the yearly totals in each category and set up the family budget for the following year. A sense of completion is important and the end of the year always seems like a time to take a deep breath and say “thank you” to God for helping us and blessing us.

For his final exam, he produced our “end-of-the-year log”. This document details our net worth, savings for the year, what percentage of our income went to each category, a list of our current short, medium, and long-term goals, and the 2013 Ware Family budget!

Whew! It was a lot of work! He received an "A" in “Consumer Economics”. He learned how to budget and make short, medium, and long-term goals. He discovered the importance of an emergency fund. He is genuinely grateful any time we are able to give him something extra — not a needed item — but just something to bless him because he is our son and we love him.
Money has become a reality to him!

Did our money managing experiment work?

Our oldest son has won several scholarships, has a nearly perfect 4.0 GPA, and is paying his own way through college. He was awarded a full tuition scholarship to a fantastic Christian university! He is a major money saver, lives on a budget, and plans for future goals.

Our second son also had his chance to manage the family budget. This tech-wizard, wonderboy computerized the entire system for me! I love it! He had a blast investigating all the computerized budgeting programs and picking the best of the best. We now use https://www.everydollar.com/ , a FREE monthly budgeting app from Dave Ramsey. My son attended Financial Peace University with us and is known to quote Dave Ramsey to all his friends. Since graduation from high school, he has worked full-time and is highly sought after for his outstanding work ethic and amazing troubleshooting abilities. When credit card offers arrive in the mail he laughs, rips them up, and goes back to plotting his debt-free future.

Go to http://www.daveramsey.com/fpu/home/ictid/classpage/ for a list of classes near you. For Biblically-based money advice, check out http://www.crown.org/ or http://www.daveramsey.com/home/. You’ll find a lot of wonderful budgeting advice there along with charts, articles, and interactive tools.

Your Turn!

Over the years, I've encountered a variety of responses to our experiment in teaching our children how to handle money. Some have said that they really don't want their children to know about the family finances for fear that they will broadcast this knowledge to all of their friends. Admittedly, this is something that I really didn't think about when we had our sons take over our budget. But, then again, being a prolific writer and public speaker, who openly shares about money and budgeting sort of meant that most people already knew the general state of our bank account. So, have you ever allowed your children to see your finances? Would you allow them to take over your budget? Why or why not? I'd truly love to know what you think about this concept. Leave your thoughts in the comments section.