iPhone Teenager

I think the message always needs to be “don’t spend money you don’t have.” IMO a credit card needs to be used as a tool and not as a way to get something you can’t afford.

But most of the kids I knew at university used it to keep up with the Jones at university. They had ridiculous credit card debt when they graduated.
 
But most of the kids I knew at university used it to keep up with the Jones at university. They had ridiculous credit card debt when they graduated.
Most likely they’re mirroring what they know and/or haven’t been taught how to manage their money. Or they get caught up in it all and make stupid decisions. I’m not sure what you picked up in my posts but I’m not advocating financing a phone. I’m saying IMO it’s okay to let a kid make a “frivolous” purchase with money they earned and saved.
 
Most likely they’re mirroring what they know and/or haven’t been taught how to manage their money. Or they get caught up in it all and make stupid decisions. I’m not sure what you picked up in my posts but I’m not advocating financing a phone. I’m saying IMO it’s okay to let a kid make a “frivolous” purchase with money they earned and saved.

The whole saving thing is really a grade school thing with an allowance or whatever job you can get before you turn 16. Once you can get a real job, it’s time to get into cash flow management and more sophisticated capital allocation. It’s no longer what are you going to save, but how are you going to save it. If you’re going to spend it, how do you prioritize what you spend it on. If you make a mistake, what’s your backup plan? This isn’t taught in school. It’s up to the individual or their parents to teach them. The the OPs kid is way behind the curve in terms of money management skills and capital allocation.
 
The whole saving thing is really a grade school thing with an allowance or whatever job you can get before you turn 16. Once you can get a real job, it’s time to get into cash flow management and more sophisticated capital allocation. It’s no longer what are you going to save, but how are you going to save it. If you’re going to spend it, how do you prioritize what you spend it on. If you make a mistake, what’s your backup plan? This isn’t taught in school. It’s up to the individual or their parents to teach them. The the OPs kid is way behind the curve in terms of money management skills and capital allocation.
I agree but apparently that hasn’t happened. You have to start somewhere. I’m still not sure how what I’ve said turned into “college kids with massive credit card debt.” You can’t teach kids how to handle money if you won’t let them spend it and they can’t learn from their mistakes if you won’t let them make them. That was my point.
 


I agree but apparently that hasn’t happened. You have to start somewhere. I’m still not sure how what I’ve said turned into “college kids with massive credit card debt.” You can’t teach kids how to handle money if you won’t let them spend it and they can’t learn from their mistakes if you won’t let them make them. That was my point.

You have to let them screw up. However, it gets harder the older they get. And the mistakes get more expensive.

To put this into perspective, my sister ended up filing for bankruptcy because my parents did a terrible job of teaching us finance, and our schooling didn’t touch the topic. I didn’t because I’m super cheap, not because of any better education than my sister.

I do like the cash flow board game as a good learning tool. I discovered it right after the financial crisis.
 
You have to let them screw up. However, it gets harder the older they get. And the mistakes get more expensive.

To put this into perspective, my sister ended up filing for bankruptcy because my parents did a terrible job of teaching us finance, and our schooling didn’t touch the topic. I didn’t because I’m super cheap, not because of any better education than my sister.

I do like the cash flow board game as a good learning tool. I discovered it right after the financial crisis.
Right. And same. Both sets of my parents were/are financial disasters. I learned my lessons there. Some of my siblings did not. I agree fully that a sixteen year old needs to learn how to allocate money but I also think that trying to stop them from possibly making a mistake when it’s relatively safe to do so (they still get fed and provided for) can backfire as well. When they don’t have gas money or can’t go to the movies with their friends because they spent all their money on the latest and greatest hopefully it will lead to better decisions.
 
So you are already paying for the service? If she's paying for the phone, what difference does it matter? As long as she is paying cash and not going down the credit debt death spiral, sounds like it's a sound decision.

FWIW - I'm with you on the 16 yo(mine just turned 17, 14 yo right behind him) spending money like it was on fire. The phone is nothing - it's the clothes, the fancy coffees, and the special diets that drive me crazy. My wife keeps reminding me that in a couple of years I'm going to miss all of this. Well, maybe, maybe not, but I am looking forward to seeing him budget when he goes off to college and that's all we're paying for.
 


So you are already paying for the service? If she's paying for the phone, what difference does it matter? As long as she is paying cash and not going down the credit debt death spiral, sounds like it's a sound decision.

FWIW - I'm with you on the 16 yo(mine just turned 17, 14 yo right behind him) spending money like it was on fire. The phone is nothing - it's the clothes, the fancy coffees, and the special diets that drive me crazy. My wife keeps reminding me that in a couple of years I'm going to miss all of this. Well, maybe, maybe not, but I am looking forward to seeing him budget when he goes off to college and that's all we're paying for.

They’ll get credit cards in their own name. You won’t be able to monitor their usage. However, when they run into trouble, you’ll hear them begging for a bail out. I saw this happen so many times. Be ready for it.
 
Technically, you aren't buying her the phone. You are giving her a $100 Christmas gift to use toward it, why not let her pay monthly? She can easily afford that payment when she gets a job.
One thing I wouldn't do is let a teen pay monthly for something like that. Once they have the item, it can quickly become a monthly issue to get them to follow through with payment. I wouldn't be interested in potentially dealing with that over and over.
 
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One thing I wouldn't do is let a teen pay monthly for something like that. Once they have the item, it can quickly become a monthly issue to get them to follow through with payment. I wouldn't be interested in potentially dealing with that over and over.

That shouldn’t be a problem. If you can’t collect from your own kid, then how do you expect credit card companies in the future to be able to collect?
 
Random thoughts:

- I think having teens save up for luxury items is a great idea; it's easy to spend Mom's money, whereas it's harder when you realize, "I worked XXX number of hours for this money. Do I really want to hand it over for a single item?" I used to do similar things with my kids; for example, if they needed jeans or shoes, I'd say, "I'm willing to pay X amount. If you want a more expensive brand, you pay the difference."

- I'd talk to her about phone insurance. As an adult, I'd never spend money on single-item insurance (also, as an adult, I could absorb the loss), but consider how devastated she'd be if she worked for 6 months, then broke the iPhone after a week. Insurance should be her choice, but walk her through the pros-and-cons.

- At the same time, you have to tread carefully with a working teen. Take it from a teacher, I've seen jobs work well for teens: teach them responsibility, the value of a dollar, etc. And just as often I've seen jobs go badly for teens: I've seen kids who allowed the job to eclipse their schoolwork. And I've seen kids who decide that "they're grown" because they're providing their own spending money /now they don't need to do things at home, school. And I've seen kids build up crazy spending habits because they have their own money; establishing a save-some /spend-some rule would be wise. Lay down some laws about the job. How many hours per week will you allow? How late on school nights? Discuss how school is still her #1 job. Even if she's working, you're still the big boss. My girls -- especially when they were teens -- always did better when I spelled out my expectations. I'd consider a family contract before you allow her to get a job -- spell out those expectations.

- I agree with an above poster that 16 is too young to make payments on something. Cash on the barrel head ... or no deal. The whole point is teaching about saving. Don't allow shortcuts.

- Phones are -- by an astronomical amount -- the #1 status symbol among teens today. Phones are "more important" to teens than clothes, cars, or anything else. I'm not surprised a 16-year old is hankering for the phone that carries the most status. Sure, some posters here explained their preferences for this-or-that phone, but I doubt a 16-year old has thought beyond, "It's cool".

- Think through this potentially problematic item: If she buys the phone, can you still take it away as a punishment? (Or would that even be your punishment of choice?) Are you still paying the monthly service bill?
 
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You can take away the functionality of a phone if you are paying the bill; you can turn off any number on the account if you are the account holder.
Do that and the only communication it will be capable of is calling 9-1-1 or app texting using wifi. No data, which will be truly painful for the average teen.

We recently did have this battle with one of my kids, and DH insisted on letting her buy it with her saved funds. I felt that it was simply too expensive an item for a kid her age to own (she is 12), but I lost that fight. I did lay down some extra rules, though: she was allowed to purchase it only if she also bought a warranty, and agreed to keep it in a weatherproof Otterbox case at all times.

Not that there is any fear of this if a 16yo is buying it, but don't buy a 6 series; they are no longer supported, and the 7's are not far behind on Apple's planned obsolescence guillotine. 8's are the minimum worth investing in at this time.

Oh, and as to this ...
That shouldn’t be a problem. If you can’t collect from your own kid, then how do you expect credit card companies in the future to be able to collect?
The answer is, the CC company reps don't have to live in the same house with her. They can harass until the cows come home and be as nasty as they want to be without having to suffer any personal blowback from it. A parent, otoh, will not want to end up living in the middle of a full-on standoff with an irresponsible kid who will not fulfill a promise.
 
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Thanks for all the responses. Lots to think about. No she would not pay monthly for the phone. Only cash. I agree it is a status symbol among teenagers too. I agree she would need IPhone 8 or higher. We will see how the dominoes fall and I will update this post.
 

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