As our kids have gotten older and are well into their teens, we have noticed that their money management needs have grown and changed also. They are earning larger amounts of money, saving for larger goals and juggling cash, credit with us and multiple gift cards. Throw in the occasional check from Grandma and the chances of items getting lost, forgotten or spent on impulse grow tremendously. Our teens have moved beyond the piggy bank or simple allowance systems. However, they aren’t ready for credit cards or online banking.
As we watched this evolution of money management, we also noticed another very interesting technique. Our daughter would add together all of her resources to see how much total money she had for available for a savings goal. She was essentially finding her “net worth” by adding her cash, her IOUs, her gift cards and any checks that she had been given. We incorporated this system into MoneyTrail to create a dynamic system of money management for teens.
For example, let’s say Morgan is a teenage girl that is saving for an iPod. She might have several “types” of revenue that she is saving.
- Credit with her parents: This would be the amount of money that Morgan’s parents owe her for odd jobs around the house and/or for allowance. She has been saving for a long time so she now has $80 in credit.
- Cash: Morgan has $28 in her purse.
- Checks: Morgan got a $20 birthday check from Grandma that is still lying on her desk. She hasn't cashed it yet, but doesn’t want to forget about it.
- Gift Cards: Teens get a lot of gift cards these days as presents. In this example, Morgan has a Visa gift card that has a $30 remaining balance that she will use for the iPod.
With a quick glance at her MoneyTrail account, Morgan can see the total amount of her assets ($158) or, in financial terms, she can view her “Net Worth”.