My teenage son has no self-control about money

Question

We've got some serious difficulties teaching our 14 years old son how to manage his finances and make him control his spending habits. He doesn't get a weekly allowance, if he wants money he has to earn it by doing chores, mowing the lawn, or sometimes we give him $20 for A+ grade in important exams. It's not that easy for him to get cash.

One would hope that this would teach him the value of money but nope. He spends all he's got pretty much immediately on snacks, lollies and online games. I mean sure, it's his money and he can spend on what he wants but it should be at least remotely sensible.

Also he's got 2 accounts - a spending account and a savings account. We usually give him half the money that he earns on the spending and the other half on the savings. Unfortunately he can transfer money from savings to spending using his banking app and drain the savings account. It costs him $3 for each transfer but that still won't stop him.

For the context we've got 2 older kids too - 18 yrs, 16 yrs along with this 14 yrs old. All of them were brought up the same, same rules about earning through working, yet the older ones have always been quite good with money, even at the age of 14 and before. They managed to build sizeable savings over time, and even started looking into investing. The youngest one on the other hand spends all he gets his hands on in no time.

Yes we can take away his card, remove his online banking access, give him only some cash per week and control his spending that way. But that's not the point.

We would much prefer to teach him how to be responsible and how to resist his impulsive money throwing away. Any ideas how to approach it?

Update: We had a good long chat about it yesterday and it seems that he knows and understands that the way he's spending is wrong but he can't help it doing it anyway. He asked me to remove his savings account from his mobile banking so that he can't access it, and gave me his debit card (voluntarily!) so he's not tempted to use it online. That's a good start.

I'm just a bit worried that this kind of impulsive spending is going to make his life difficult unless he changes his mindset. Locking himself away from the money as we kind of did now isn't a sustainable answer. It boils down to a lack of self-control I guess.

Answer 1

Two crucial questions: What do you provide for him? What are his priorities?

For the first question: I don't mean things that should be given by default. He shouldn't have to pay for food/rent at that age. What I mean are large expenditures for which he'd have to save up money. If you get him a new PS5 for Christmas or new games whenever he asks, he'll never feel a need to save. He gets the nice things that cost a lot without spending his own money. When I was that age, I knew the most expensive thing I'd get was ~$100 for Christmas, so if I wanted something like an Xbox, I had to save up and use my own money. Same for smaller (but still big) purchases like video games, or when I was even younger fancy LEGO sets.

The second question is what are his priorities? You mentioned that he spends money on online games. Taking a stab he might play Free to Play games like Fortnite that don't have an upfront investment (a $60 price tag). Consequently he can play as much as he wants without spending money, but if there's a skin he really wants then he shells out for that. It could be the only thing he prioritizes in life are small ticket items, in which case he won't need to save money.

With those two questions answered, you'll be able to work on a solution. For instance, maybe at this age he needs to start saving for a car. You tell him you'll only pay for half of the car and he has to pay the other half. Or you'll pay for his insurance, but he'll have to buy the car, etc. Figure out his long term investment priorities, then work out how you can encourage him to start budgeting for it, while being fair to him (with relation to what his siblings were given).

Frankly, we want our kids to learn the value of saving, but if he never needs/wants to buy big ticket items, then there's very little you can do to enforce saving currently. He'll have to learn it more once he needs to start paying for things like rent/insurance/phone bill etc.

Answer 2

Learning to manage money isn’t something that happens from not having money, when your needs are met externally. You have to have money, and have control over it, and have the opportunity to mess up some.

Not having an allowance to me is a major mistake. I know the ‘make them work for their money to make them value it’ mentality, but having occasional spurts of money that aren’t consistent is a good way to make people just want to buy treats when it shows up. It’s not how real life works - when you have a job, you get mostly the same amount every few weeks.

Instead, take some of the money you spend on them now, give it to them, but also say they need to buy some of their own things. If you spend $65 on lunches at school a month and $80 on clothes a month, say, give them $160 and say that covers food, clothes, and a bit extra for fun - but that’s all they get.

Let them make choices with it and mess up sometimes - if that means they have torn clothes or eat nothing for lunch for a week, that’s on them (as long as it’s not dangerous or risking their health).

That’s how you learn to manage money - by having a constant stream of it and figuring out how to make it last. Enforced savings works for seven year olds, where you’re just giving them the feeling of saving so they know what it means, but for teenagers it’s just an annoying thing they work around, as you figured out.

Let them mess up while you’re there to provide a safety net, but make sure there are enough consequences they realize it - and not you-provided consequences, but natural ones they realize that come from their own mistakes.

My kids, 11 and 9, have had allowances their whole life (since 3 or so), and have each managed to save up large amounts when they needed it. They both went through phases of buying candy or toys as soon as money is available, but then realized they were happier saving for more important things, and understood the money was always there when they did want something - it wasn’t needed to spend it all every time it came in. They’re not quite old enough to buy their own clothes yet, but they will in a year or so for the older one.