An allowance contract for your teens is not just about the pocket money you (parent) provide to them, it goes beyond that helping you to teach, train and turn your teens to capable financial planners.
To let Your Teen Learn Value: “Value has a value only if its value is valued”, this was once quoted by Bryan Dyson, the former CEO of Coca-Cola in his 30-second speech. And the very quote stands true if you think in the context of the scenario with your Teen. By now your teen is entitled to a pocket money which s/he receives it without fulfilling any obligation or working hard for it. So s/he may not value unless s/he EARNS it.
By being in Allowance Contract, your Teens will LEARN THE VALUE FOR MONEY, since they will have to earn that allowance in exchange of fulfilling an obligation (or your expectation).
To inculcate Saving Habits: One of the conditions in allowance contract for your teenagers will be setting aside a part of the pocket money for “Savings” that they can use in the future for any reasonable purpose or purchase which is not in their reach at present.
What hazards do you avoid with an allowance contract?
Reckless Spending: Think by yourself; would you spend your money impulsively when you know you have earned it so hard? Why just money, anything for which we worked persistently if not painstakingly is not an easy throw away. With an allowance contract you can prevent your teens’ reckless spending that comes along otherwise, with easy and unearned money.
Debts: In today’s world it is easy to borrow and buy credit; even for a teen. Very likely your teen may fall victim to debts like most other youngsters do. According to a survey not so long ago Sallie Mae (NASDAQ: SLM), the leading financial services company in USA, found that more than half (1/2) of college students (teenagers) accrued over $5,000 in credit card debt while in school. Of the 13,000 respondents, one-third (1/3) piled on more than $10,000 in credit card debt while in school.
As parents you would never want your teens to be a part of the above mentioned statistics and an allowance contract for your teen therefore becomes a better way to redirect them towards savings and effective utilization of the money saved when required, avoiding the need to borrow.
Bad Habits: When youngsters are left unsupervised with money, they may catch up bad habits like Drinking and Doping ultimately ending up into squandering money. A Teenager allowance contract instead helps them to control and conquer over this urge of spending by saving the money for meaningful purposes instead of materialistic purchases.
How you can set or customize one for your teen?
It is quite understandable that many of you (parents) might need a help to set up allowance contracts for your teenagers. And you may even find a few ready made and printable templates of such contracts on the internet but this may not necessarily suit your need since they are general specimens and not particularly tailored for your teen. However if you want to create a customized one then consider HomeContrat. Org
Should you have questions or queries? Feel free to write to HomeContract.Org
Jade Robinson has more than 18 years of experience working with Teens and Adolescents. Using his experience, he has developed a system (called Home Contract) that allows parents to easily set up new boundaries and rules with their teens. It is an ideal and effective way to improve a particular habit by implementing a home based parenting contract. More details at HomeContract.Org