Table: Conundrums for High-Earning Teens
PROBLEM: Your teenager has money to burn but not a clue about expenses.
SOLUTION: Set some expenses--entertainment, lunches, clothes, etc.--that she must cover out of earnings and allowance.
PROBLEM: A 3% passbook rate doesn't offer much incentive to save.
SOLUTION: Offer a "401(k)," with a 50%-to-75% match when your teen's savings reach a preset goal.
PROBLEM: Your teen sees his bank account as a black hole: Money goes in but never comes out.
SOLUTION: Encourage a short-term savings account for bigger purchases to prove the value of deferred gratification.
PROBLEM: You cringe at the platform boots your teen's about to buy with her baby-sitting cash.
SOLUTION: Apply the "one comment" rule. State your objection clearly and briefly, once. Tell her: "Save the receipt." Then shut up.
PROBLEM: You tell your teen to sink or swim with his expenses--and he sinks.
SOLUTION: Advance him funds for overlooked essentials, with a plan for repayment. But ignore those pleas to underwrite the next ski trip.