Summer Job Savings
Posted by Gail | Filed under Kids & Money
Your kid got a summer job. That’s excellent. Your Mini-Me won’t have to sponge off you all summer. Now that Junior has a job, it’s time to have a little chat about what he’ll do with the money. If you don’t talk about it, you can’t expect your young’un to intuitively know how money works.
Save Some: How much does your kid plan to save? For those who are working their first job cutting lawns or delivering newspapers, the Save 10% Rule will be enough. Resist the urge to insist that your child save 50% of their income. Do you save 50% of your income? (I didn’t think so.)
For kids who will be heading off to university shortly, saving for tuition may be top of mind. Have the discussion about a reasonable amount to save to reach their goal. If for example, they want to have $5,000 saved, and they have two summers – 16 weeks – to save, they’ll have to tuck away 5000 ÷ 16 = $312.50 a week. Can’t be done? Then Baby Girl will have to extend how long she’s saving, or find a way to earn more money.
Don’t set the savings bar too high. Sure you’re paying for all your kids’ basics needs right now. But if they’re working hard, they’ll want to enjoy some of the things money can buy. And they should. There’s nothing more de-motivating than not enjoying the fruits of one’s labour. Saving some is important. So is spending some. Which brings us to…
Develop Smart Shopping Skills: Comparison-shopping is key to getting the most for every dollar you earn. So is understanding the concept of relative value: how many hours you have to work to pay for whatever it is you’re thinking of buying. If your kid is determined to get the latest cell phone ($400) and has a job making minimum wage ($10/hr.) then he’ll have to work for 40+ hours (don’t forget to talk about income taxes and sales taxes) to get that phone. Is it worth it?
If you think your kid’s blowing her money on crap, ask her to keep a spending journal showing exactly where her money is going. She may not even realize how much she’s spending on things like snacks and entertainment. This can be a great way to put her spending habits into perspective. Combine that with a little chat about her goals for a double whammy: now she’ll know where she really wants to put her money, and she’ll know where she can cut her spending to get what she really wants.
Some kids are natural born savers. Others, not so much. If you want your child to develop the skills for using their money to their best advantage – instead of it slipping through their fingers like so much sand – it’s time for a talk. Not a heavy-duty lecture. Not a rant. Not a series of rules. A talk: a sharing of ideas and discussion about life, money, and how to have what you really, really want from both.
July 17, 2012 at 7:21 am
My eldest daughter has a pretty good balance between saving and spending. However, when she spends money, it’s on things (essentials) that I’d buy her (ie: undergarments, shoes) and she will not allow me to pay. She’s very independent and a good kid. Not sure where she came from, lol! I have no financial worries for her. It’s the younger one that will bring us challenges!
July 17, 2012 at 7:30 am
Even though my two daughters aren’t working yet (too young), I try to have these chats with them regarding their allowances. So far, so good! Thanks, Gail!
July 17, 2012 at 7:37 am
After all sorts of convincing and cajoling on our part and much legwork and some competition on her part, our 16-year old landed a full-time summer job for students. It’s outdoors landscaping work which is great for being outdoors but I’m concerned it’s not great work experience for what she’ll go on to study at school but overall, we’re all happy that she’s working 40 hours each week. At minimum wage this will take her some time to amass savings.
At her request, she is banking 50% of this money specifically for school and she’s asked us to invest her savings in the RESP we have going for her. I was very impressed with her suggestion!
What she does with the remaining half is up to her and so far it’s been clothes and summer concert tickets. Typical teenage girl stuff!
Our next goal is to have her working part-time during school next year (senior year of high school) and that should help her learn to balance school and work at the same time. And hopefully it’s an employer that she can carry on with during her university term.
It’s not easy for the students out there right now and kudos to all who have landed work this summer.
July 17, 2012 at 9:16 am
This is exactly what I was wondering about. I have two working and one that should be working…
July 17, 2012 at 9:16 am
@andrea
Dont worry about WHAT your daughter is doing for work (well, worry if it was illegal for something) because she will learn valuable transferable skills and good work ethic!
July 17, 2012 at 9:42 am
I agree with Casey – don’t worry what work your son/daughter is doing. They are learning skills and the value of working hard, even if it has nothing to do with their career plans.
July 17, 2012 at 9:52 am
Thanks to Gail my 5 year old and 2.5 year old both get an allowance. Since we think the 2.5 yo is too young to understand money we just put it in her piggy bank. But with T 20% has to be saved (which is $1) and then the rest can be saved for a specific item or to share (sometimes he likes to buy ice cream for his lil sister).
The one thing we do differently which may or may not be the norm is we have rules that must be followed in order to get the whole amount. Typical stuff like lying, cleaning up, behaving outside, etc. We tell T that he gets an allowance cause he is a big boy now and being a big boy means he has to abide by these rules. He is “docked” when he breaks a rule (any where from .25 to $1 which only happened once when he hit his sister).
He loves Saturday mornings when he gets “paid” and if he is docked we ask him if he remembers why, usually he does and it doesn’t happen again. Now I have my other family members giving allowances too.
July 17, 2012 at 9:59 am
@ Cas I would say the same thing about my kids…the eldest provides for himself the necessities quite nicely…and I like you, am not sure where he gets it from…lol The other 2 … the challenges will be there for sure!!
July 17, 2012 at 11:40 am
Andrea – if anything, those type of labour-intensive jobs are perfect for young students as it is a great reminder of what they might not what to do for a career. I remember my boss once saying that he spent a summer working a very hard labour job and that was extra motivation to go to University and get a degree because he did not want to be doing hard labour like that for the rest of his life!!
Most jobs will teach them great transferable skills so I wouldn’t worry so much about the type of work.
July 17, 2012 at 11:46 am
Our kids were expected to save at least 50% of all of their income while in high school to pay towards university (they both saved more than that). We don’t have a university or college in our city so both kids had to travel out of town for post-secondary education and we expected them to contribute (both came out of college/university with money in their pockets instead of debt).
Sure, we don’t save 100% of our money, but we have costs that kids don’t (rent/mortgage/taxes, food, utilities, insurance). I think letting them spend 50% (or more!) of their income is unrealistic. Do most people have that much disposable income? I doubt it. Get them spending 50% of their income and they’ll think that’s normal. Truly, I think that’s a bad money lesson.
July 17, 2012 at 12:31 pm
@ Andrea (and everyone else who responded to her comments)
I have worked for a company in a role that specifically recruits recent graduates from Universities and the skills we look for can be earned at ANY job. Most employers don’t expect their entry-level, recent grad staff to know everything about the field they are working in. What they do expect is that you know how to show up on time, complete your work, call-in sick (this one seems simple, but we’ve had a few new hires who would simply not show up) and other basic job skills.
Many senior executives also seem to have more respect for students who worked “typical” summer jobs or doing physical labour because that’s what they themselves did when they were young. I’ve also found many recruiters are suspicious of high school and university students who put higher level office jobs on their resumes, since many of those jobs are usually earned by having a parent or other immediate family member at the company and the students rarely gain any real work experience.
It may not be glamorous, but working in landscaping proves your daughter can work hard and consistently perform well, two things that are very important to employers!
(Also, I commend you for encouraging her to work PT while in school, too many students don’t these days and have very poor time management skills once they reach University!)
July 17, 2012 at 12:50 pm
These are all lessons I wish I learned when I was younger and kudos to parents who are teaching their own kids young.
My parents taught me many lessons along the way, unfortunately, financial management was not one of them. Of course you can’t really teach what you don’t know yourself. These days I do my best to try and educate my family so that we can make better decisions as adults.
July 17, 2012 at 2:08 pm
Around when I was 14 or so, I actually started tracking every cent spent. I had a pad of bright paper (one of those ones with a saying and then lines for shopping lists or notes or whatever), and I taped it up on my door frame in my bedroom – anytime I made a purchase, I wrote it down and wrote what it was (i.e. 7/15/99 $4.99 for ice cream at A&P), and also indicated when I got paid and increased my cash (or if I loaned out/gave money to my anyone).
I kept it up throughout high school, not so much in university, but got back down to it (on the computer) after graduating university. I’m much lazier about updating and keep it to once a week or so, but I still do it!
As for jobs, I had plenty: babysitting and video store clerk throughout high school, and then when I came back for summers in university, I worked at a newspaper plant and put the newspapers together (and got a measly bonus of 25 cents an hour for the night shift). It was hell and my goal was to find something better the following year. Then I worked at an arboretum and loved it. I didn’t like how hot the days were, but I certainly enjoyed the work, and always felt like I had accomplished something at the end of the day. I did that work for three years and it certainly hasn’t hindered my ability to find work as a graduate.
July 17, 2012 at 2:45 pm
@tracy h,
i understand your view point. i have read money smart kids by gail and it may be worth a read if you havent. planned spending for kids is things like sports, school supplies or big ticket items. As they grow older it could be thier share of car insurance ect… That is wehre they learn that its not really thiers to do with as they please. sure they can quite sports and chose to sit home and do nothing while we still have bills to be paid, but we have those choses too. i dont need my 300k home, we could live in a 70k trailer. The idea though is that 10% is the minimum.
I agree though that if what they are saving for is very expensive (like gail mentioned above and as you mentioned that there are no local schools) they need to make some adjustments either saving more or working longer.
I am a stay at home mom (hubby’s military and gone alot) and we are looking to retier when i am 44 and right now that means that any spare money we have is saving, tax return is savings. Since our kids are 2 and 3 and are a pain to take anywhere over night, no vacation and that money is in savings. we are saving for thier school too and when you add it up, we are saving almost 25% of our money in total.
What it really comes down to is 1)what the goal for saving is and how much it will cost and 2)personal circumstance. When i work summers, i had to save 50% too, thats what needed to be done so we do it.
July 17, 2012 at 3:16 pm
It’s important to “squirrel” away your savings! I want that image for a screen saver!
BTW- I just reached another milestone in my savings thanks to Gail’s tips. I now have as much in assets as I previously had in debt! It took me a year and a half of aggressively saving more and spending less and its finally um…paying off! On my quest to save I just made my first batch of homemade deodorant and its refreshing! I did get some amount of skeptical scrutiny in the check out line when I was purchasing the ingredients…And I will say I was skeptical myself! The coconut oil is an investment but I hardly made a dent in the jar with one batch of the recipe producing a full tube and a half of deodorant. I recycled my old deodorant tube so not only am I using an all natural product but recycling and saving money all at once! Here is the recipe for any of you DIY adventurers: http://exconsumer.com/diy-homemade-coconut-oil-deodorant/
July 17, 2012 at 3:59 pm
@ Brooke, thanks for posting that link! I an trying to make more things my self as I am trying to get away from chemicals and petrolium derived products and this is the first homemade deoderant recipes I have seen.
Regarding todays post, my son is still too young for this, he’s 7 months. However we will definitely be giving him a “wage” (we live on a farm), that he will have to use to purchase somethings himself, as well as savings. My husband I both paid our own way through school, and while we have set up an RESP we still think he should contribute to his own schooling too.
July 17, 2012 at 9:08 pm
@Cas
I know you worry about the job your kid has, but no worries. The most important thing is to get something to start on her resume.
When I was in college, I was a cashier in a grocery store. Gosh that I hated that job. Every shift was a pain. But I really don’t like to change job often, and it paid the bills, so I kept it for a year. One of the interns in my stats class was doing a study on how work is affecting your studies. I took a few minutes of my time to answer his questions. He was so surprised when I said that my job was helping me in my education. I told him I hated that job so bad, that there was NO WAY I wanted to do that all my life! Obviously, this part time job was taking away time in my weekly schedule, but was a benefit for my motivation.
When I moved cities to go to University, I applied for a couple of office jobs, since I was “a little” fed up of customer service jobs. I had no experience what so ever in the field, but I got a job in the payroll services of a huge company. The manager was looking for someone as a student for the summer. The job wasn’t complicated, so she didn’t care about the experience in the field, but she wanted to make sure that I would stay for the entire summer. Since I kept my student jobs at least a year, she said it was the best resume she had for the position! Even if it was a summer position, I managed to have renewals and to stay there for a little more than 2 years.
My point is just that every experience you have builds your resume. The field doesn’t really matter, the most important thing is to learn to be a good employee. The rest will follow
July 21, 2012 at 1:04 pm
[...] Summer Job Savings [...]
July 21, 2012 at 2:20 pm
The rule my parents used was that if you made under minimum wage (like a paper route) you could do whatever you wanted with the money, but once you made minimum wage you had to put two thirds away for university. Given that we didn’t have to cover rent, food, and basic clothing costs having a third of our income available for play money was actually a much higher percentage than I have now as an adult.
As far as a high school job, it teaches all kinds of really important skills that are helpful when you go live alone. I worked at Wendy’s for 5 years, you learn to get along with your coworkers, even if you have nothing in common and come from very different social groups. You learn how to communicate with people with heavy accents or even no English abilities at all. In fast food you learn a lot about cleanliness – restaurants need to be very clean every night or you get rodents and bugs in. At Wendy’s in particular a lot of the food is made right on-site, so you get a feel for what makes a good salad, how to slice vegetables, how much trouble you can get in if you try to serve undercooked meat. You would be amazed how many people get to university and have no idea how to cook well enough to keep themselves fed without eating out every day.