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Managing your fashion-forward teen's clothing allowance

Setting an allowance can teach a teen valuable budgeting lessons

By Gary Foreman

The New Frugal You
New Frugal You columnist Gary Foreman
Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website and newsletters. He writes "New Frugal You," a weekly Q&A column about frugal living, for CreditCards.com

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Question for the CreditCards.com expert

Dear New Frugal You,
Our daughter will become a teenager in a few short months. I'm considering giving her a clothing allowance. Lately we seem to argue about every clothing purchase. I'm thinking that an allowance might be a good way to teach her about money. What do you think? -- Kelsey 

Answer for the CreditCards.com expert Dear Kelsey,
Parents and their offspring debate everything during the teen years, including what clothes the child needs and how much those clothes should cost.

You're considering one of the best tools to resolve the debate. A clothing allowance can also help teach your teen about handling money. You might learn something, too.

The mechanics aren't that difficult. Decide which items your daughter will be responsible for buying and how often you'll give her money to buy those items. Determine the size of her clothing allowance and how you'll actually give her the money.

Get her input before you make a decision on which clothing items she will be responsible for buying. You might want to start with undergarments or something simple. Then, as she gets older and has more experience, add other items such as tops and skirts. Ideally, she'll be buying her entire wardrobe by the time she leaves home.

How much to give her depends on your family finances and her age. An amount similar to what you had been spending before is appropriate. You'll need to keep in mind seasonal needs (such as back-to-school) when you decide on an amount. Discuss those seasonal needs with your daughter. Encourage her to plan ahead and budget for them.

Be prepared to change the amount of her clothing allowance. This will be important as your daughter gets older because her clothing will be more expensive as she grows up. Preparing in advance can also help you adjust for any incorrect allowance estimates.  

I'd suggest that you give her the clothing allowance once or twice a month, for two reasons. First, the amount that she'll get is smaller, so there's less opportunity to make a high dollar mistake. Second, it's similar to the frequency of the paychecks she will receive when she starts working.

Next, you'll need to work out how she'll get the money. The simplest way is to give her cash. She can keep a wallet specifically for her clothing money. When she wants to go clothing shopping she'll take the wallet along. As she gets older you should set her up with a checking account and debit card. Use the opportunity to teach her how to read an account statement.

Just because she has an allowance doesn't mean that you have no influence. You're still the parent. Set some rules. Require that she keep a minimum balance in her clothing account and that she would need your permission to drop below the minimum. Allow her to keep any excess money she accumulates by the time she leaves home. That will increase her incentive to save. She will get frustrated at times because she can't afford the newest trendy item. Sympathize with her, but don't give in and put extra money in her account. If she wants to spend more than the allowance, suggest that she add extra money from birthday gifts or from money that she earns.

As an adult she'll have other similar experiences -- probably more expensive ones. Mom won't be there to help out, but her credit card will. We all know how that turns out.

See related: Clothing allowances for teens: making it work, How to set children's allowances

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Published: July 20, 2013


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