It’s summer and your kids are out of school, foot loose and fancy free. If you have teens, they are probably busy spending money hand over fist (whatever that means) and hopefully, many of them are making some or all of the money they are spending. If they aren’t, and YOU are supplying the money they are spending…STOP!!!

Yes, you read that correctly. Stop giving them money to spend frivolously! Kids don’t learn how to create their own money when you’re always giving it to them to spend. I’m not referring to their regular allowance money, however, that you provide for them to buy the things you’ve made them responsible for buying at their age, which is the secret to The Ultimate Allowance.

One of the main points in my Ultimate Allowance Book is that it’s always far easier for kids to spend YOUR money than THEIR money so it’s imperative that you put them in charge of purchasing the things they need as early as possible.

Since I explain exactly how to do this in my book, I move on to talk about what a perfect opportunity the summer provides for instilling a sense of financial responsibility and entrepreneurship in your kids.

Necessity is the Mother of Invention

We’ve all heard this saying, Necessity is the Mother of Invention. Well, if kids aren’t getting extra money for movies, day trips, smoothies, etc. from YOU, they are going to have to create it themselves, or borrow it from others (and if you see this happening, stop it immediately).

The challenge for you is this: if you’re working full time and your kids don’t have the guidance they need to create their own money and manage it well, well, it’s probably not going to happen.

Now there are always a handful of kids who, for whatever reason, get the business bug all by themselves. They see their parents making their own money and have been exposed to it since they were babies or they see a buddy making money on his own or something else spurs them into starting a little business.

Generally, however, they need coaching and guidance to reach this point. One great solution, if you can’t do it yourself, is to find a mentor for your son or daughter. If you can’t be the inspiration and coach, perhaps you have a friend, relative or neighbor who runs his own business who can. If your child is a hard worker, pays attention and is truly interested, business owners are often happy to take on a young intern to show him the ropes.

Kids, Summers and Saving Money

No doubt about it…summers take money. We all know that. Vacations, special events, time with friends, new movies (thanks to Hollywood), new video games, etc. The marketing firms of the world spend months in conference rooms around the globe figuring out how to get money out of your teen’s pocket in the summer.

The questions are:

1) Where is this money coming from?

2) Who’s in charge of managing it?

In terms of where the money is coming from, it’s important to remember what I said earlier, that it’s WAY easier for your kids to spend YOUR money than THEIRS. You know, without a shadow of a doubt, what your kids REALLY want when they are willing to use their own money.

The key is to help them start producing their own money as early as possible. And generally, you do this by encouraging them to start a little business providing a service or selling a product or getting a job (which is the last option since we’re trying to create kids who are independent, not dependent, for the rest of their lives).

The best way to encourage their little entrepreneurial spirits, is to start chatting with them every chance you get about what people are buying and what people are spending their money on…explore various services and products they could promote that would make them money.

Note: it’s not your job to judge what is a good idea or not, so do your best not to say, “That’s a stupid idea…it will never work.” Treat every idea as valid and then help and encourage your child to learn what a good business idea looks like. And remember, if you don’t know, get some help from a friend or neighbor.

In terms of who’s in charge of managing it? Well, that all depends on how old your child is and how what kind of relationship you have with him or her. I’ve always frowned on TELLING a child what he has to do with his money. It’s really critical that, when it comes to learning about money, you develop a trusting, open, inquisitive type relationship with your kids where they can explore the wonderful world of money, learn how to manage it well, begin exploring the how to invest it in assets (beginning with a simple savings account and moving into individual stocks, starting businesses, and maybe even eventually real estate when they’re a little older).

Let’s Talk About Money!

So DO you establish the kind of relationship with your kids where money is an open book? It’s simple. Just start talking to your kids about money with as little of your adult judgments and beliefs thrown in. And you’ll know when you’ve crossed the line when you start to get upset about something. Just back off, take a breath and continue talking without the judgment or belief controlling the conversation.

Don’t TELL your child; ask questions. Don’t lecture; tell stories and get their feedback. Don’t just SHOW your child what to do; let him EXPERIENCE what to do himself.

Set Some Summer Goals

Summer is like any other time in regard to making and managing money. Take time right now to start the conversation. Sit down, play Monopoly. Order and play The Money Game if you can get 6-10 kids (siblings, neighbors, cousins, etc.) together and you have the gumption to learn how to teach it (it’s instructor driven, not a board game) and let them learn experientially.

Let part of the conversation be about setting financial goals. Any type of goal is fine…just set some. Saving goals, purchasing goals, money for vacation spending goals, saving toward a new bike (or first car). Anything that gets them focused on NOT spending their hard earned money.

Avoiding Financial Sunburns

At the end of the summer, you and your children have either spent more than you made, come out even or made more than you spent. If you don’t aim for the latter, you’ll end up with one of the first two. So…just keep an eye on the goal and have a great time learning how to get there, together.