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Tips for setting up a teen's clothing allowance

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,
My daughter is 13. She's continually begging me for money for clothes. I want her to be nicely dressed, but we can't afford to jump on every teen fashion trend. The way she sees it every item is "must have" so I don't know where to draw the line. Recently she suggested that I just give her $125 a month to spend on whatever clothing she wants. Is giving her a clothing allowance a good idea? -- Janice

Answer for the CreditCards.com expert

Dear Janice,
Yes, a teen clothing allowance can be a very good idea. Shifting the decision making to your daughter will reduce family friction -- and provide an excellent teaching opportunity.

Let's look at some of the things you can do to make a clothing allowance for your teen a success.

Begin by setting up some rules. What items will she be responsible for? Will she buy shoes? Winter coats? How much will she get? And  how often?

Let her know that she'll be making her own choices. Not only in terms of what to buy, but where to buy it.

You will want to maintain the right to veto any purchase that you feel isn't appropriate for her age. Make that clear from the beginning.

But don't exercise the veto just because you don't like her style choices. Teens have always dressed different from their parents. The goal is to allow her to learn what styles work best for her.

Let her know that you're open to giving advice, but that you won't dictate choices.

The allowance should not be big enough to buy anything she wants. That would actually defeat the purpose of the allowance. You want to force her to decide between what she really wants and what she can live without.

Not surprisingly, your teen's suggestion for a clothing allowance is high. According to U.S. Census Bureau statistics, in 2010 an average mid-income family (with income between $57,000 and $99,000) spent $820 (or $68 per month) on clothing for a 12- to 14-year-old. What she's asking would be above the average for even families with incomes over $99,000.

Offer to help teach your teen how to stretch her clothing allowance. Show her how to shop clearances and at consignment and resale stores. At first she'll probably reject these suggestions. But when she really wants something that's not within her budget, she'll be more open to new shopping tricks.

Suggest, too, that she use technology to find clothing bargains. She could be better at using discount codes than you are. She might also be aware of how many clothing deals can be found online.

Encourage her to create her own style. You won't like some of her experiments. But if she develops her own look, she'll be freed from the current trends.

Expect her to make mistakes. You will be tempted at some point to step in and forbid her to make a bad purchase. Don't do it. First, you'll be breaking your promise that she has control over the money. Second, you'll keep her from learning valuable lessons about money.

One major goal of any teen clothing allowance is to help your children learn how to prioritize their purchases. Help your daughter learn how to tell the difference between wants and needs. She has the opportunity to learn that a winter coat is a need and an expensive party dress is a want.

She'll also have the opportunity to learn that trendy clothes are just that: trendy. And, what's trendy today will be out of style tomorrow. Like milk, trends have an expiration date.

Encourage her to swap clothes with friends. Swaps work especially well if a whole group of friends join in. Offer to help her host a swap-party.

Plan on making periodic adjustments to your teen's clothing allowance. As she gets older you'll want to give her more money, responsibility and freedom. Consider getting her a debit card when she's 16 or 17.

Give her the option of making some money to add to her clothing budget. Some families allow their teens to earn money by doing additional chores at home. Others prefer to encourage teens to look for work outside the home. Working will help her to understand where money comes from.

A teen clothing allowance can be a wonderful tool, and not just to help reduce friction in your family. It can also help your teen learn financial skills that every adult needs.

See related: Tips for teens: Stretch that clothing allowance

For more than 35 years, Gary Foreman has worked to help people get the most for their money. Prior to founding The Dollar Stretcher.com, he was a financial planner and purchasing manager. Gary began The Dollar Stretcher website and newsletters in April 1996. Today the website features more than 6,000 articles on different ways to live better for less. Gary has been interviewed by The Wall Street Journal, The Nightly Business Report, USA Today, Reader's Digest and other newspapers and magazines. Gary answers a question about a budgeting or saving issue from a CreditCards.com reader each week. Send your question to The New Frugal You.

Published: February 21, 2013


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