The Sink or Swim Money Program : The 6-Step Plan for Teaching Your Teens Financial Responsibility

We instituted this plan with our daughter almost 2 years ago. The difference was dramatic and immediate. We had not originally allowed enough money to cover all of the expenses we were expecting her to cover. The monthly sessions were very emotional for those first couple of months when there just wasn't enough money. We went through the plan and looked at it together and readjusted her salary. Things became much more manageable and less stressful. I used this experience to explain to her that there are people who feel like that every month. That there just isn't enough money to pay for the things they have to pay for. I did NOT do it on purpose to give her that lesson. She has made great strides in financial responsibility. She got a job when she was old enough. She bought a car, pays for her insurance, tag and car related as well as other expenses from her job. She donated over $500 last year to causes that she finds worthy. Has a long and short term savings accounts. Our next step is to work toward investments and teaching her to be responsible with credit before she leaves for college in just over a year. She was starting 10th grade when we started this. We were worried that we might not have enough time. It had taken years for her dad and I to get to the point where we finally "got it" financially speaking. She has come so far, so quickly it sometimes seems we've been doing it much longer than we have. I have read other books on this subject over the years, for some reason this one clicked and I knew it was something we could do. I think one of the best things about it is that it is not about being strict or perfect. It is about finding a balance that works and letting kids figure out how to make choices and live with those choices when those choices do not threaten their safety or security. I am thrilled with the progress we have made in our home with this program. I don't really worry about her future financially. I know things could still happen but at this point I feel certain that she won't make damaging financial mistakes because she didn't know any better.

When I was about five years old, my mother got tired of my complaining about the food she bought for our family. She told me that I would pick out the food for one week, and we would eat whatever I bought. We would use our normal grocery budget. Wow! Was I excited! The basket was soon filled with Cokes, candy, sugared cereal, cookies and potato chips. Naturally, there was no meat, fruit, or vegetables. I was asked if I was sure that's what I wanted. Yup! Well, it was heaven for about three days. Then, we started to run out of food. And I got tired of all of the junk food. My mother took pity on me and made some things out of staples at home. At the end of the week, she asked me if I wanted to to do the shopping for the next week. No way! I told her I would be glad to eat whatever she bought. That experience is a mini-lesson of the sort that Dr. Whitcomb feels that each child should have beginning between ages 10 and 13, depending on the child. Dr. Whitcomb learned the benefits of making money mistakes for himself while he was a boarding student. He was given the money to pay all of his expenses. If he ran out, that was his tough luck! His parents before him had had the same lesson applied in the same way. Most young people eventually start to have these experiences when they live away from home, whether for boarding school, college, or moving away to take a job in another area. Dr. Whitcomb points out that learning the lessons earlier and on a smaller scale is a good idea. The book is built around the idea of establishing a budget for something your child needs to pay for, then giving the money to your child, and learning from the school of hard knocks. He has an elaborate set of contracts, ATM account rules, and tracking mechanisms for making this practical. He suggests picking out an approach that works for you and your child. The book has lots of good advice for how to handle the inevitable crash landings. We did something similar to this with our children, and they soon learned to live on the funds they had . . . or to earn some more. They became ingenious at saving money, and finding better ways to earn it. One child, who had been profligate before it became that child's money, totally turned around. So I think the theory works.I would advise starting earlier than he suggests here. Children can take on responsibility for buying family presents much younger than was described in the book. And you don't need an ATM account to do it. When the age is reached to buy one's own lunches, that's another opportunity to install this approach . . . with a fixed weekly allowance. Chores can be used to generate income for "extras" and that helps other lessons be learned. I also suggest starting with investing younger than is indicated here. I started doing that when I was 12 and greatly benefited from that early exposure. I think you will enjoy the book, although I don't think you will follow it exactly. The best par