Blue Suit Mom

The Family Budget: A Guide to What Teens Should Be Paying For Themselves

Money in pocket - Spending conceptAccording to the U.S. Department of Agriculture, it costs $241,080 to raise a child until the age of 18. If you’re the parent of teenagers, you probably already feel these staggering costs—there are the name-brand clothes, monthly phone bills, entertainment expenses, and if any of them are driving, gas and car insurance. Should you give your kids what they want and risk heading to the poorhouse, or ask them to chip in to offset the costs? Here are some ideas on how to set financial boundaries with your teen.

Social Outings

Just about every teen would rather be out with friends shopping, gaming and socializing. If your kid isn’t aware of how much he spends when he’s out with friends, let him pay for it himself. Suddenly he’ll have a clear understanding of how expense his lifestyle is, and he just may want to set up a budget. Visit for a free and easy-to-use budgeting app.

Cell Phone

Most cell phone providers offer family plans at a discount over what it would cost to fund three or four phones separately. Look at the added expense of including your teenagers on your plan and ask them to cover the cost or pay half. If you don’t have unlimited minutes or data, impose a limit and tell him he will have to foot the bill on any extra expenses. Let him know he will have to replace the phone if it’s lost or broken and pay for any accessories past a standard case.

Car Expenses

Once he’s driving and added to your car insurance, figure out a percentage of the bill your teenager can realistically pay for and ask him to contribute. You could supply enough gas to get to and from school or work, plus a gas stipend for a few social outings. Anything past the allotted gas allowance is your teenager’s responsibility.

It’s up to you whether you’ll cover oil changes, tire rotation and other maintenance costs. Consider making it your teen’s responsibility to take the car to all maintenance appointments, clean it inside and out once a week and regularly transport siblings instead of contributing financially to ongoing maintenance.

You may want to buy your teen a used car outright and asking him to pay back the loan with a low interest rate. This helps your child learn the basics of a loan and how to figure out a monthly payment plan he can afford. If you receive regular payments from a structured settlement or annuity, consider selling future payments for a lump sum of cash now that you can use to help make the purchase. Visit for more information about selling your future payments.

Extra Clothes or Luxuries

Parents should buy their kids a basic wardrobe of school clothes, shoes and jackets. But do you need to pay for their fourth pair of boots or another new dress? Come up with a plan on how many clothes, accessories and luxuries like video games you’re willing to buy. You could also offer a small clothing allowance. Let them know any other extras should be paid for out of their own pocket. Your teenager will start to look at price tags more closely to figure out how badly he really wants those new jeans.

Does taking money from your teenager make you feel a little uneasy? Invest it into a CD or money market account and give the money to him when he graduates or moves out on his own. Visit to learn the basics of investing.

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