Quit arguing about what clothes you'll buy for them

A Teen Clothing Allowance

by Gary Foreman

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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?

The teen years are when parents and their offspring debate about everything, including what clothes the teen 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. It's even possible that you might learn something, too!

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

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

How much to give depends on your family finances and her age. An amount similar to what you had been spending is appropriate.

You'll need to keep in mind seasonal needs (like back-to-school) when you decide on an amount. Discuss those seasonal needs with your daughter. Encourage her to plan ahead (can you say budget?) for them.

Be prepared to change the amount of her clothing allowance as your daughter gets older and if, by chance, you estimated the amount incorrectly.

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 more like the frequency she'll see in paychecks when she starts working.

Next you'll need to work out how she'll get the money. At first, you might just want to give her cash. It's certainly the simplest. 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 in paper and online form.

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Just because she has an allowance doesn't mean that you have no influence. You're still the parent. Set some rules.

You might want to require that she keep a "minimum balance" in her clothing account and that she'd need your permission to drop below the minimum.

You might allow her to keep any excess money she accumulates by the time she leaves home. That will increase her incentive to save.

There will be times when she'll be frustrated because she can't afford the newest trend item. Sympathize with her but don't give in and put extra money in her account.

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 be there. We all know how that turns out.

If she wants to spend more than the allowance, suggest that she add extra money from birthday gifts or from money that she earns.

When she runs out of cash, use it as an opportunity to introduce her to thrift and consignment shops.

Encourage her creativity. Clothes are a way for teens to express their personality. Don't squelch that. It's better to be an encourager. More than one teen has worn something from a thrift store and started a new fashion trend among their friends.

Expect your daughter to watch how you handle your money. If she sees you using good money management skills, she'll be more likely to follow your example. On the other hand, if you're quick to pull out plastic for that "must have" designer blouse, you're probably going to have a struggle.

Look at the whole process as a teaching moment. It's not about whether she runs out of money and can't afford new socks. Chances are that she will. The question is what will she learn from the experience? A clothing allowance can go a long way to preparing her to manage money as an adult.

Gary Foreman

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter. Gary is also available for audio, video or print interviews. For more info see his media page.

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