I’ll never forget the angriest I ever was with my father: the day he taught me how to buy a car.

The day couldn’t have started out any more perfectly: It was Saturday in early May, gorgeous and sunny, and I was so happy my feet barely touched the ground. I was 17, and Dad had surprised me that morning by waking me up to tell me that instead of waiting until August, right before I went off to college, we were going to go buy me a car right then, so I could have fun with it all summer (i.e., practice where he could supervise).

After I tugged on his hair a bit, to make sure he wasn’t an imposter wearing a Dad mask, I was up and dressed and out in 5 five minutes flat, despite the ungodly hour. I had worked at a Capitol Hill internship all senior year and saved half of my income, which were the ground rules. If I did all that, he’d pitch in the rest. I had arrived. I could picture nothing but me zipping off from my high school graduation, free as bird, in my own wheels.

First, we drove farther than I could believe. There were car dealerships everywhere in Washington, D.C., and nearby suburban Maryland. Why were we going to Virginia to purchase a car? In Virginia, tax was 4% instead of the 5% in Maryland and the 8% in Washington, D.C. Lesson Number 1. I was good with that.

Lesson Number 2: Dad wanted me to get a Japanese car for better gas mileage and longevity. I was good with that, too.

We get to the first dealership. I don’t like anything. I saw some boat of a grandpa looking car and was terrified my father would like that one. Nope. He agreed, nothing there worth buying.

We get to the second dealership, nothing in our price range. We drive a million more miles, I’m beginning to have my doubts. Then we get to the third dealership. We both see it at the same time and we both like it: A 1980 Toyota Corrolla (the year was 1983). It’s a cute hatchback, brick colored. Dad said it was within the budget, too. I was thrilled, explaining to the encouraging car salesman how many of my friends could fit in it to go to the beach.

And then….And then, my father, my own flesh and blood, did something that left my jaw hanging open, and when I shut it I refused to speak to him. In such a two-faced way, he approached the dealer, did nothing but complain about the car, and made a lowball offer. The car salesman said no, and my father turned around and walked away. No back and forth, no give and take. And he had the nerve to wink at me on the way out.

He was sitting in the car when I finally stormed over. He motioned for me to get in. As he drove off the lot, he was staring in the rearview mirror, smiling. I turned around to see the car salesman standing in the doorway looking after us.

“The number one rule to a good negotiation is to take your emotions out of it. One look at the car and you were already wagging like a happy puppy. And you let the dealer know it. That’s a losing position. It’s just a car. There are a million others. That’s the only way to approach a deal no matter how you feel.”

We drove to three other dealerships in silence, came home empty handed that evening, and I was heartbroken. My father said we’d try other dealerships the following weekend, there were always more cars, we’d find one. It fell on deaf ears. But, it was the best negotiation lesson I ever learned, even if I didn’t really speak to him for a solid week. It was one week later that the car dealer called and accepted my father’s lowball offer.

By the way: Even then he wouldn’t drive straight over and grab that car. No, we had to go to two more dealers to make sure there wasn’t a better deal around. He never shook my attachment, and I spent the entire morning before we arrived back at the Toyota dealership terrified someone would buy it out from under us. But of course I got the idea and I never forgot it. Now, I’m in the one in my family who winks behind the car salesman’s back on the way out.

So, if you tell your kids that story, add that in 1983 the economy was a heck of a lot stronger than it is now. There were was a much better chance that someone else would buy that car out from under me. Now is a great time to play what I call Dad Hardball in a used car negotiation.

1. Always get a used car checked out thoroughly by an independent mechanic before you agree to anything. Do not sign anything, or hand over any money before you do this. Do not drive it nearby to a mechanic the car dealer or individual recommends (if you buy a car from an ad in the paper, or on eBay).

It sounds like a hassle, but absolutely necessary for a trustworthy assessment. If the seller is hesitant to let you do this, there’s something wrong with the car.

2. Never buy a car that’s been in a front end accident. Most cars are never the same afterward, even if they are repaired by the best mechanics. You could be buying a lot of expensive headaches. The exception to this is if you’re spending a couple of hundred dollars and want a jalopy to last a few weeks, maybe a summer, and it won’t be driven any long distances. But for teaching kids about investing wisely in a safe, lasting car, pass up any front end accident cars.

3. If you’re buying a new car, consider last year’s model, and a corporate demo car at that. A corporate demo car is a new car that has been driven a few hundred miles by car manufacturer executives. They cost less than new cars, but have new car warranties. You can explain to your teen, or college student, about depreciation here, with an example that really hits home. Tell them the moment they’d drive a new car—non corporate demo—off the lot, it would go down in value immediately to be worth the amount of the demo car.

4. If possible, pay cash for a car. Try to avoid car loans. But if you must take out a loan, use the opportunity to teach your kid lessons about paying off loans in a timely way, and if possible, to pay them of quicker than the life of the loan. Show them that the faster you pay, the less money you spend in the long run. Use the Amortizing Loans Calculator here to do the match with your kids. This is a good lesson for when they own mortgages and should be building equity in their homes.

You can also find more information in the Saving for a Car section of the GiveMe20.com website.

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As the Secretary of the Board at a private school, of course I’m hearing more and more stories about parents struggling to pay for private school (see Private School Bailout post). But what I’m also starting to hear are creative ways people are coming up with to keep making those private school payments.

It’s inspiring, especially the cases where the teenagers whose education is at stake are proving to be incredibly resourceful. There’s one case so striking that I’m starting to believe we should all set our teenagers to the task of playing treasure chest detective.

Let me explain: The principal at the school where I sit on the Board is an exceptional human being. He took an old Jeep Cherokee in lieu of one student’s tuition, because the math-smart kid was blossoming at the school, after a tough time in a public elementary school. Of course word spread, and the joke on our campus—and it’s a beautiful campus, open fields against a mountain backdrop—is that soon people will be bringing in goats.

So one parent called and said her daughter, 16, had spent the entire weekend in the attic, taking inventory, wondering what she could try to sell on eBay. Her mother didn’t have the heart to stop her; she was so organized and industrious, so mature in her thinking that goods could be liquidated and put to good use.

So the girl finds these gold coins that the mother had all but forgotten about; they had been handed down from grandparents, not wealthy ones. At second glance, and after much prodding from the teenage daughter, the mother called the school. Our principal referred her to another Board member who happens to deal in antiques. One of the gold coins was worth $59,000. And there were several of them. The teenager not only saved her private high school education, but found her college education as well.

This story gives me goose bumps because it’s in the fairy tale realm, but it’s also true. Yet I hesitated telling it to the kids in my life because it could be disappointing to send them on a mission that will never result in such glory.

Still, I couldn’t shake the thought that systemizing what that 16-year-old girl did would be of great benefit to any teenager. First of all, taking inventory of family valuables teaches kids to assess a dollar value for goods— a great skill applicable to so many things, from comparison shopping to being responsible about taking good care of valuables.

Even the act of going online to determine what something is worth by finding comparables that have sold is a great skill. And of course just knowing what things in this world cost, and how quickly they lose value, is important.

Want to teach the kids something? Have them look at what your car cost new, and how much its value dropped to the minute you drove it off the dealership lot. It will help them learn how to spend wisely, assess what they really need versus want in goods and services.

So, I decided to give kids a chance to flex their research muscles while earning a commission. First, they assessed the goods in my house. Then I sent them to my brother’s, and other relatives willing to participate. They were allowed to set up an account on eBay, and they got a commission on whatever they sold.

eBay requires the seller to do a lot of monitoring, so it enforces the lesson of following up and following through on things. Of course the commission keeps them motivated. Teaching them eBay also teaches them how to deal with online transaction settlement, which of course leads to the question of what to do with their commission. I think setting set them up with a reloadable prepaid card is a great idea. In some cases, the stuff they sell on eBay can be paid to their card, and then they can take out cash to pay the seller, keeping a commission. They end up running a business.

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I hate to say what I’m about to say. I really do. I’m not the Benedict Arnold type. I think my close friends would say I’m a loyal friend. But you won’t believe that after you see what I have to say about teaching teens to spend wisely. Still, I have to say what I think works best. Just know I’d much prefer to say, “Do as I say, not as I do,” but that won’t work with a 7-year-old, much less a teenager.

Without further defensive preamble, here are the first two steps, which subscribe to two learning theories: One, we learn most and best from mistakes. Two, kids love nothing more than when parents are wrong.

1. Let your kids interview you about your spending habits. Make it focused and simple. Tell them your budget for discretionary spending money per week (that way you don’t have to reveal too much about your overall financial picture if you don’t want). So, you tell them an amount, and what you think you spend on different things. They should write all this down. Call it the Estimate.

2. Then let them track your habits over one week. Give them all your receipts. Each evening, report to them what you spent. They should write all this down. Call it the Truth.

For the record, my husband outright refused to participate in this teaching project (he’s smarter than you’d think, looking at him). My brother participated. Of course he did. The man still wears corduroy pants he had when we were in our 20s. He denies it, but I remember them! He came out like a stellar example of spending. His Truth was the same as his Estimate. Last time I invite him to participate.

I didn’t do so well. Kids say I’m in denial about more than a few things. How, for example, could I claim that I buy two or three cappuccinos a week when it was at least six. How could I not be aware of something I do every day?

My only choice was to snap back that they should save their money and buy me a cappuccino maker for mother’s day. Last year I got burnt toast and tepid coffee in bed, only after I reminded my family what day it was. Unfair I know, but I’ll swipe the guilt card whenever I can. I’m way outnumbered.

Embarrassing as it was, the kids learned more from me than from my brother. Way more. And they didn’t feel bad when their Estimate didn’t match up to their Truth—which of course is the next step.

I do strongly recommend doing the first two steps with someone who will not look so good. It’s like when you have a small child and they’re scared to do something: ride a roller coaster, or go to a haunted house. You don’t tell them how easy and great it is. They just feel more inept because of their fear. You tell them there’s no way you’re going, you’re too scared.

3. You interview your kid about their Estimated spending habits. Write it down. The key here is to put away judgment. Don’t comment every time they bring up something you think is a waste. They need to remain open in this exercise. Tell them that no matter how this ends up, you’re going to open a checking account for them, and get them a reloadable student debit card at the end of the week. The point of this and step 4 is to raise awareness. That’s it.

Spending what you say you’re going to spend per week without going over budget is a great skill. How many adults do you know with that skill? It’ll take a few steps to get there. Don’t go too fast on the spending wisely lesson, and don’t load them up with too much. Conditioning always necessitates that each step is completely ingested. Awareness. Just stick to that for now.

4. Track their spending for one week. Write it down and call it the Truth.

5. No matter how they do, open that checking account, get that debit card. Don’t put any energy into how they performed. Awareness. Keep your eye on the ball. You’ll notice that you’ve bonded a bit, too. They’ll see you as more fallible, and their own desires as okay. Remember, if you sneak candy bars or whatever, tell them during your Truth, even it flies in the face of lectures you’ve given before. The more human they see you here, the better. Load their allowance onto the debit card and start them off. The great part about this being step 5 is now they’re used to having their spending tracked. With a reloadable debit card, you go online and can see what they’re spending, line item by line item, just like with a credit card.

6. Up the ante with bonuses. For two months, each week their Truth matches their Estimate, give them 25% extra allowance. Just load it on their card. Now, this has variations and stages. If your kid estimates that he or she will spend their whole allowance, and they do, but they don’t ask you for extra stuff, then their Estimate has matched their Truth and they still get the extra 25%. If their Estimate includes saving some money each week, and they do in fact save it in their Truth, give them a 30% bonus. Tell them the more they save, the bigger bonus they’ll get.

7. After two months, only give them a bonus for saving some money, not just making their Estimate and Truth match up.

What I’ve found about teaching spending this way is that they become aware, love the grown up feeling of the debit card, and get motivated by the bonus money that starts to accumulate in their account. What you don’t have to do, using this method, is get embroiled in control battles about what is and isn’t a good purchase. I hate arguing with my daughter item by item. “How many electronic games can one person really use?” “I can’t believe you’d waste money on another clip-on backpack accessory!”

This method sidesteps control issues, instead of forcing a head-on collision. Please share any methods for wise spending that have worked with your teens!

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Teenagers want a good deal. They have to see cold, hard value to get in the mood for saving. And if they’re in the mood, you’ll have a much easier time teaching them to save wisely.

Creating a teenage money-saving disposition is essential, and tricky, because bad habits form quickly, while good habits are always hard fought. It’s like eating habits. Two-year-olds with a diet full of sugar will not only crave sweet food, but won’t develop a taste for greens. Greens aren’t necessarily natural, as counter-intuitive as that seems. Mother’s milk is very sweet, so kids are inclined to want sweets. You need to develop the taste for greens early so the stronger urge for sugar doesn’t monopolize their desires.

You need to instill saving habits immediately because kids need to develop a taste for saving. The good news is that if teens see what savings can do early on, they will develop a taste for it. That brings me to the savings plan which might make you very unpopular at first, but ultimately sort of cool. Please read all the way to the end before you judge the plan, or you’ll think I’m a wishy-washy hypocrite. I have found this plan works to create very savvy investor teens who know the difference between principal and interest, which one should be spent, and which one should be saved.

1. Insist they take a portion of what they earn and invest it in savings. Don’t just call it savings. Call it an investment in savings. Investment connotes return and they get that instinctively. The key is to make the portion hurt. Make them invest 50% of what they earn in allowance or a side job.

Open a savings account in their name and make the first investment effort short-term: one month, tops. Let them spend whatever they’ve saved after one month. That way they’ve seen what can happen when you let money accumulate—it becomes more money—and what it feels like to go a weekend without spending everything. But then they hit pay dirt so they feel like savings brings reward. Remember, the teenage brain thinks a month is an eternity, and we’re operating on the “gradual exposure creates successful acceptance” theory (my theory for everything).

2. Make the next savings plan three months. Let them spend it all at the end again.

3. Make the next savings plan 6 months, and have them invest in a CD. Do this by calculating what they’d save after six months, front it to them, and have them pay you from their weekly earnings. By the end of this time, they will be adjusted to saving, and it will feel very grown up. When the CD matures, let them spend the interest, but not the principal. Here’s their bonus: You match the interest they earn, which they get to spend. Explain to them that this is what employers often do for long-term savings plans.

4. Next, give them a choice: 1.) They can re-invest in another 6-month CD and continue to save 50% of their earnings. You will again match their interest earnings. Or, 2.) If they invest in a 1-year CD, they have the option to only commit 30% of their future earnings to savings. And with the 1-year commitment, you will triple match their interest earnings.

The idea is here to teach them the basic wealth accumulation habit of spending interest and not principal, and doing so requires long term commitment. Rich people don’t ever dip into principal. That’s what separates them from the rest of us. They live within their means and expect their principal ultimately to give them sustainable, recurring income.

Giving them bonuses for being willing to tie up their principal is worth it. The side benefit is they’ll realize that the key to saving off the top of earnings is that you forget you have it. When you forget you have something, you are willing to let it ride. You never get used to it in your pocket.

And throw them a bone for junk once in a while. Let them override your veto power with their spending money occasionally, even if you think it’s incredibly stupid. If they’re saving well, let them have it. When it comes down to it, I think most of my husband’s discretionary spending is idiotic, but he’s so much more pleasant when he gets his toys.

Okay, I admit it. So am I.

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Have you noticed that the kids in your life whom you most want to veto are the ones you no longer have that much power over? College kids can often be the spendthrifts, while young teenagers have a well developed hoarding instinct.

Maybe it’s because the younger ones don’t drink and don’t have new freedom. They want activity-supported products, hobby products, and collectibles. College kids are more expansive. And when you first have the ability to keep purchases secret, you want to make secret purchases.

Or maybe it’s personality types. And that’s the problem with a blanket rule about veto power. Some kids will be naturally conservative, rarely wanting to spend, so you can speed ahead and work on more advanced lessons with them, like investing their earnings, keeping some liquid, donating some to charity, maybe even investing in a small side business or personal improvement. Check out these Calculators for assessing how much allowance kids should get at what age, and how much interest they can earn with savings from allowance or side jobs. They can help money-oriented kids do a lot of planning, on their own. I’ll be doing blog posts on Saving Wisely and Spending Wisely, so stay tuned for step-by-step lessons for the kids.

But for those of us with more remedial charges, let’s get back to the decision: veto power or no veto power? First let’s look at the cons for veto power, the argument for a kid’s free reign:

1. We all learn most from our mistakes. So, if your kid decides to buy another pound of makeup she doesn’t need, and then can’t afford a concert she wants to go to, she’ll think twice next time. The key here is you don’t cave in to her begging and pleading for the concert to be your treat.

2. They’ve earned the money, either by allowance or a job, so they should have control. If you take away their control, will they be less motivated to get side jobs, or do chores for their allowances? They want to grow up, and squashing their motivation to act independently can also get in the way of them developing problem solving skills.

I’m at a loss for more cons. If you have any, please send them along.

My mind goes right to the pros, the reasons why veto power is key:

1. The mistakes they make don’t teach them anything. What if they waste their money and the lesson never kicks in? I’ve seen a lot of cases where bad money habits form quickly, kids shrug off the opportunity costs, and their attitude is simply that next week there will be more allowance, so no biggie. Maybe they borrow money from their friends for that concert and pay it back with their next allowance.

There is the argument that you don’t need to make every mistake in order to learn something. There are times when “You’re not old enough to make that decision” makes more sense. A classic example is smoking cigarettes. Do they really need to pick up a smoking habit in order to learn that it can kill them? There’s a reason for the “Just Say No” campaigns for drugs. And if your family can’t afford to waste money on any level, then learning from mistakes might be too much of a luxury.

2. Veto power starts a discussion, and the strategic lesson, of what exactly to do with your money instead of wasting it. If it’s built in that your teens can’t buy that age-inappropriate clothing with their money, then what should they do at least becomes part of their thinking. You don’t want to remove yourself so much from the process that you do kids the disfavor of not training them to use money wisely. It’s our responsibility to teach kids that. We can’t judge them for wanting immediate gratification; it’s natural. We can teach them self control over it.

3. Veto power enforces lessons that are about a lot more than money. Money is a resource that can help them acquire things you don’t permit, like clothing you consider too revealing. If you don’t allow your daughter to wear that clothing, but she’s allowed to do anything she wants with her money, you’re sending a mixed signal.

I remember what I did with that mixed signal as a teenager: I kept my jeans with the cool holes in them, which my mother hated, in my backpack, and changed into them when I got to school. My mother worked until 6 p.m., so I was always home before she was and could slip right back of the contraband jeans.

I think like a lot of answers, the truth probably lies in the middle. We need to give kids enough rope to either learn to swing or hang themselves. Even if we keep veto power, I think we shouldn’t wield it before they’ve done anything wrong. Teach them how to save and spend their money responsibly, give them a checking account and a debit card to keep track of what they’re spending, thereby creating the awareness that translates into personal responsibility.

Give that lesson immediately. Then see what happens. If they spend on something you don’t approve of, make them take it back to the store. Have another discussion about wise spending and also spending in accordance to whatever your house rules are.

One aspect of any approach I think is necessary—and please chime in with disagreements, because it’s a heated issue—is to set up no expectation of privacy with their debit account. Debit cards give us an opportunity to monitor without asking invasive questions and putting kids on the spot. We just go online and look at their spending, line item by line item.

Even if you don’t believe in any veto power at all, be careful before you turn over all power and grant them privacy for their checking accounts. You may regret it. And if you set up the account with the password in your possession as a given, then you haven’t betrayed anything.

Just a training thought: It’s not that you don’t trust them, it’s just that you don’t trust their lack of experience. It’s like learning to drive. The driving teacher sits in passenger, letting the kid drive. But those driver’s ed cars always have a set of breaks on the passenger side.

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Getting your teenager an internship is an entirely different strategy than prodding your college student into the pre-work world. And as far as I’m concerned, it’s never too soon. If you can find them one, do it! It’s great on a college application.

The key difference between a teen internship and a college one is that the teen one doesn’t need to be pertinent to their goals in life in order to be valuable. This is a good thing, considering that teenagers have goals like beating their Wii high score, seeing how many hours in a row they can go without doing anything, or reading one of the Twilight book series from front to back without sleeping.

It also opens up the internship world to include absolutely everything, which makes it easier to find them one. And it doesn’t have to interrupt a summer job because the internship can be part-time.

If they do happen to land a full-time internship, and therefore it does preclude them getting a summer paid job, don’t miss out on teaching them money management. If you can afford to, give them a substantially bigger allowance so they will have incentive to take the internship. I will be posting spending wisely and saving wisely blogs next week.

If you can’t afford to, and your teen is responsible for saving money for college, then definitely make the internship part-time, or reduce it to an internship-like experience by having them volunteer for something. The key to a teen internship is that it is like an apprenticeship: they will learn a trade, an industry and a skill. The person who gives them the opportunity must have a need, and in exchange for that need filled, will be willing to tell your kid’s school that your kid has experienced something educational.

To get them an internship, try these 10 things. And before you set out to try them, add this word to your thinking: apprenticeship. That’s what many teen internships amount to, and when you approach people, they may be more open if they see the experience as having an apprentice.

1. Hit up every friend you have to see if they need free help this summer. With the economy the way it is, there are a lot of overworked offices around—employees laid off and remaining ones doing double time, double jobs. It’s a great time to get your teen in there to help.

2. Send teens to area job fairs. This is especially good for 16 year olds. Look for them now. Closer to summer is too late. Just Google job fairs in your area.

3. Talk to local government—everyone from town council to the mayor’s and governor’s offices.

4. Talk to local newspapers. Publishing has been hit hard by lay-offs and they need free help. A teenager can learn a lot at a newspaper. They may even join their school newspaper next fall after experiencing one in the summer.

5. Talk to local agricultural programs: Community Sustained Agricultural (CSAs) programs, organic farms, research projects at universities that run in summer.

6. Talk to your local library. They may be most open to teenagers, and will hear of other community educational programs.

7. Talk to local photographers. Photography interests a lot of teens, and in this Internet age, photography/videography skills are always a plus.

8. Talk to local tech companies. Tech companies often have more means than others, and room for computer-literate kids, which includes most teens. Put those texting and game-playing skills to work!

9. Talk to local Film Festivals. Film Festivals are everywhere and rely on volunteerism. Kids will have a natural interest and they’ll learn how hard fund-raising is.

10. Talk to local artists, writers, architects, and law offices. (These may also be your friends you hit up.) They often need assistance and can’t afford it, especially in this economy. They will be very willing to teach an art form in exchange for help. If your kid likes and is good at research, this is an especially good avenue.

Once your kid gets an internship of some kind—an apprenticeship—call their school. See if the experience can apply for some kind of credit. The school where I’m Secretary of the Board of Trustees has a work-study program for seniors for part of the year. Kids can often earn credit or extra credit for good apprenticeships/internships.

Make sure to speak with the college guidance counselor at the school. They make great advocates and allies for encouraging students in this direction, as well as working with community members to create an internship out of an assistant situation. They’re also creative about finagling ways for your kid to get credit for the experience. Talk to them even before you set out to help your kid get an internship.

If your kid does well in school, ask for recommendations from teachers to hand to internship prospects. They may even have advice about whom to ask in the community. Better yet, have your kid ask them. It’s great experience for them to advocate for themselves.

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It may sound odd, but bear with me here. Get your kid a credit card—a bona fide credit union Visa or Mastercard you’re probably going to have to co-sign. It won’t work just to put them on yours. The point is to help them establish credit so one day they’ll move out of your house and into a mortgage of their own. Keep your eye on the ball. Make sure to get them a rewards card.

What about that little potential disaster, where they could ruin their credit forever if they run up bills you can’t pay? Before you join my husband in thinking I need serious psychiatric help for coming up with this idea, just hear me out:

Get a credit card with a very low limit, so even if the kids royally screw up, betray your trust, and buy a Wii with the card in the first five minutes they’re alone at the mall, it can’t harm you too much. With credit issuers pulling purse strings tight these days, it will be easier to get a low limit card anyway. Seriously, get a limit amount like $250.

Which brings me to the method of training them about what that credit card limit means:

If your kid lives at home (a teen or a college student), put them in charge of grocery shopping. If they live elsewhere, they can do their grocery shopping on the card.

If the card limit is low enough, it will make it a challenge to buy groceries, which is of course the point. Your kid won’t be able to say they tried but the bill was more so they spent more. They’ll have to rifle through items at the checkout counter and put things back, until they get the hang of it.

If you normally pay for your college students’ groceries (they live off campus, they’re not on the food plan, you supplement anyway), then you’re just paying the credit card company instead of handing out money, all the while establishing credit, which is getting harder and harder to establish. What an early advantage for your kids

If you are not comfortable starting out with a credit card, get a reloadable student debit card. Every kid is different, and maybe yours just isn’t ready to be trusted with a credit card, even with strict boundaries. If not, put training wheels on that Visa-logo card. Make it a reloadable student debit card

This card won’t establish credit for them, but consider it the prerequisite training class for the co-signed credit card. It’s great for teens, too, because you can load their allowance on it.

You simply go online, log in to their account, and load money onto the card. So, if your kid is a spendthrift, send them to the grocery store with just $20 loaded, and a list of a few items. Expose them to responsibility gradually.

Gradual exposure is a great phrase to remember for any new experience, and money management is no exception. The reloadable student debit card works anywhere a Visa debit or credit card works, and it’s better than cash because you can monitor what they’re spending. Just go online, their purchases appear the same way credit card line items do.

When you see good behavior, reward the kid with a co-signed rewards credit card. And tell them all about what they will be able to earn with that credit card.

Incentives for both the credit card and reloadable debit card kids. For kids who live at home, give them a grocery list of must-haves, and tell them once they have bought all the requirements, they can get whatever they want with the rest of the budget. Send kids together if you have more than one, and give them enough extra money to get less than what they want. They’ll have to negotiate and compromise which extras to get.

Send them to a different grocery store each time in the beginning, so they see the difference in prices. Comparison shopping experiences are a great way to teach value, and make people think twice. And for items that kids use, like food, they’ll remember the prices, especially when they find a good deal.

Their reward will be points they accumulate on their reward cards. Maybe they’ll get free stuff, an airline discount. Do make sure it’s a rewards card. You have to be careful here, though. Reward cards reward people for spending more. You want them to find the best deals at the grocery store, get the most for their money.

So hedge your bet. First and foremost, their reward should be cash: Say you give them a $250 limit to do the grocery shopping. If they comparison shop, really find deals, they might have $20 left over. If they do, let them either buy junk food or keep it. Make their first goal to get a commission on the job.

Let them learn that reward points are rewarded for what you need to spend and no more.

Remember, they used to teach grocery shopping in the 1950s in high school home economics class. The kids can handle it. At first, you may eat some disgusting food when they buy the wrong things, but you’ll live, and you can always exchange it when they’re not home.

This concept can become expansive, too, as they become responsible. You can add other acceptable merchants to their list: school for tuition, or rent— all those expenses that can be put to use helping them establish credit. They will also see credit as a convenience and system to earn rewards, not a vehicle for buying more than they can afford per month. They should own and operate a credit card without revolving credit. That’s the habit to establish.

After a while, let them pay the credit card bill every month, either by auto-payment from their checking account, or if you’re daring, by letting them write checks. The trick will be to see if they remember to do it before incurring a finance charge. If they do well with it—never incurring a finance charge—you can reward them with something to go with their frequent flier miles: a ski or beach trip.

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This is always a tricky question. After I advise my students, and they’ve left my office, their new decision awkwardly in their minds, a piece of paper with a contact or two jotted down, I often feel like calling after them: “Or you could….”

This year, this economy, even more college tuition hikes staring them in the face for fall semester, I feel downright guilty touting the high-brow virtue of internships. Maybe I should be sneaking a call to their parents and asking how they’d like me to play it. (Not a bad idea.)

There are always tradeoffs, even in a thriving economy. But for this year in particular my advice to students is divided like this (There are variations on this for younger teenagers as well. I’ll do a separate blog post for them.):

If you are paying for college yourself, and you need the money: Go for the highest paying job you can in the summer, sock away as money as you can. Use this Savings Calculator to see how much money you’ll save by September. The idea is if you can avoid working during the school year, it’s best. That way, during the school year you can pursue student clubs, extracurricular activities, Fall and Spring internships that will expose you to your fields of interest, and supplement your resumes when you graduate.

Also, in summer, there’s always time to volunteer in some capacity that can enhance a resume and test out a field of interest, to see if it’s something you really want to pursue. Even if your college kid volunteers instead of officially interns for a Political Interest Research Group (PIRG), for instance, it is a memorable, life-changing experience.

Volunteerism is important, too, for perspective. Sometimes a good paycheck is so intoxicating to kids, they get completely money focused, and they don’t think about the long-term implications of devoting themselves to menial labor. All they want to do is work for money. But they need to really understand that what looks like a lot of money now won’t in five years. If they volunteer in an environment that’s more of an investment in their intellectual and professional future, they’ll be exposed to seeing longer term payoffs—which is a great money lesson, of course.

PIRGS, incidentally, exist in every state and have some of the most valuable internship programs in the country. Your kid will lean about grassroots democracy, political canvassing, how a Congressional Bill works, what issues are important to the state, who the political players are, how laws are made, and how purse strings are pulled. Talk about teaching kids valuable lessons about money at an unpaid job.

PIRGS are my number one recommendation for students, even if they’re not going into journalism, political science, or law. Intelligent citizenship creates thinking that is applicable to every career.

The best part: PIRGS always need volunteers. So even if your kid must work year round, encourage them to volunteer for a PIRG, to get the same richness of experience and boost to the resume. I’ve had students tell me that their work for a PIRG changed their thinking, opened their eyes to interests they never knew they had, incited passion about issues they didn’t know mattered.

If you are going to be a freshman or sophomore in the fall: Even if your college kid doesn’t need the money to pay for college, this is a great summer for these ages to have a paid summer job. First of all, internships are harder to get for kids entering college, or even soon-to-be sophomores, especially if the kids are trying to get those internships through their universities.

Most universities give priority to juniors and seniors because they need to prep them for the job market and they’re running out of time. Many students don’t think about internships and valuable volunteerism until well into their junior year. (Big mistake.)

For freshman and sophomores, this summer is a great time to learn the value of earning money and what to do with that money. Job fairs are happening all over the country. Just Google job fair to find out where, and look at local university postings. Have your kid check them out. Sometimes there are paying jobs at university job fair events that are as high caliber as internships. Definitely have them start looking for a job now.

Whatever the job, encourage the kids to start a savings program with a portion of their earnings. If they aren’t paying for their college education, then introduce mid-term savings vehicles: CDs and bonds, for example. Remind them when they do graduate they’re going to want cars, apartments, vacations, more material goods than they imagine. Socking away money now is something they’ll be happy about later. It teaches them envisioning and planning, very important money management skill.

To show them how their money will grow in different savings vehicles, use the same Savings Calculator I mentioned above. You can key in different interest rates to show accumulation over time. I’ll also do a blog post on learning what interest rates mean, and how interest is calculated, so kids can understand what the deal is, and how it’s determined.

And, of course, encourage them to volunteer somewhere, particularly if they think they’re interested in a field but aren’t sure if they’re cut out for it. For instance, many kids who think they want to study medicine spend some time in a hospital and change their minds. If your kid has a set goal already, try to help them get exposed to the environment they’re interested in on a volunteer basis.

Volunteering at freshman and sophomore age can sometimes translate into internships the following summer.

If you are going to be a junior, senior in the fall: If you can at all afford to, focus on an internship, especially if you have never had one.

Try not to let your kids wait until they’re seniors for their first internship. It’s very competitive, and often when students apply for internships, it takes a semester or two to land one.

Also, once a student is a junior, their coursework is of course major-focused. What if they decide, after a summer internship related to their field of study, that they don’t like that path? Better to know before the fall semester.

If you are going to be a freshman or sophomore and REALLY know what you want to study: Often in the fields of science, law, and medicine, kids know early. If this is the case, and they can afford it, definitely try for an internship in that field, or simply volunteer. First of all, these fields are intensely competitive, so the more experience you have, the better.

But more important: Your kid needs to make sure he or she is cut out for the field. I know too many students—and adults—who ended up in careers because by the time they realized they didn’t necessarily like what they were doing they had a degree and a first job in that field.

It’s not a tragedy if that happens. It’s why many people go to graduate school. But testing waters, and learning about who you are, versus what you think you should be, is perhaps the greatest life lesson a college age kid could hope to get.

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Tax time is the perfect time to be thinking about starting a Subchapter S Corporation. You’ll be in the mindset to see how different next year can be. And it could be the greatest lesson you teach your over-18 kid in this economy, while boosting their college application or resume.

A Subchapter S Corporation is a small, privately owned business with fewer than 100 shareholders and employees. So if you have more than one kid, and they’re over 18, have the whole family become officers in the business. You can find a way to include underage teens, too, especially if they’re 16, legal working age. You can hire them.

Here’s the gist of an S Corporation: They do not pay any income taxes. And they pay profit taxes at a lower rate than your personal income tax. Instead of income taxes, the corporation’s income, or losses, are divided among, and passed to, its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.

So, in bad recession years where you have losses in your investments, your income is shrinking, and you are truly operating in the red, your business takes a loss, you don’t pay out salaries, and therefore you have no personal salary. No salary, no tax.

The best part about an S Corporation is that you take your freelance or side business seriously. A big part of success is the mindset. If what you’re working at is just a side thing in your mind, you’ll never make it grow. And that’s an important lesson to teach kids: If you focus on something, legitimize it, put energy into it, you can grow it into something greater than you imagined. They’ll learn control over their financial lives—that they don’t have to always be at someone else’s mercy.

Here’s what the advantages are, to see if it’s the right move for you and your family:

1. Requirements. There are of course requirements for S Corporation, and here are two websites that can give you all the specifications, including getting the corporation filed:

IRS website for S Corporations
LegalZoom.com, which has all the forms you need.

It’s not expensive. You can often do everything for under $200. Each state has a different fee, but it doesn’t vary that much.

2. Get your kids in the mindset of an entrepreneur, and let them tout what they learn. You can not only teach your kids how a business runs, what stock certificates are, and how money that flows through a business functions, but you can get your kids in the mindset of thinking like an entrepreneur. Kids are wellsprings of ideas, and they share them if they think there’s a chance they’ll be put to use.

Whether or not they have an entrepreneurial life path, it is the post-modern recession skill. In the 1930s, out of work scientists who knew how to be brick layers had a recession skill. Starting a business is the 2009 version of that. Needs change during a recession, and when there are new needs, there are new businesses to be started. It’s good to know how to start a business if you need to. And they may find it suits them. Don’t just give your kids an allowance. Give them a corporate salary and a title.

Whether they add their title and responsibilities to a resume, or a college application, they’ll get a great response. A college application essay about being a part of a startup S Corporation will get the attention of college admissions directors. It’s competitive out there for universities, as you know, and this is a unique stand-out activity and job. What better way for kids to show initiative and a sense of personal responsibility?

They will love their corporate job. I think it’s the general rule of work: When you feel like you have stake in something, you’re more devoted.

3. You can start an S Corporation for any kind of business, and it protects you from liability. I have one, and wouldn’t live without it as a writer. If someone sued me for something I wrote, they could only attack the assets I own under the corporation, which is nothing. They can’t touch my house, my car, any of my personal assets.

Take this thinking to other sorts of businesses. Let’s say you start a business upgrading homes for energy efficiency. (See my March 24th post.) Say you burst a pipe in someone’s house and they want to come after you for damages. They can’t touch any of your personal assets. You start a business bank account, get a business credit card, keep only the amount of money you need to operate in that account, and that’s all they can file a claim against. You pay the rest in salary to yourself, and your kids, and no one can touch that. The liability lesson is so great for kids. It teaches them about consequences and preparing yourself for them.

4. Deductions. Your house is your corporate headquarters. You can deduct the space you use as office space on your taxes. Now, there are very strict requirements. For instance, you can’t use a room that has a closet in it as an office. The IRS doesn’t want people writing off bedrooms. But you count the square footage of what you’re using as office space, and it’s fair game. There are other deductions. If you’re using your car for work, you can write off gas, maintenance, repairs, the works.

Have the kids be an active part of assessing deductions. This can be their corporate job. They can be the Chief Financial Officer. And if you have more than one kid of age, you can have a Chief Operating Officer, too, and they can share the assessing lesson.

5. Investments that lower gross revenue. Get in that tax time lesson: Before you pay salaries in an S Corporation, the corporation can invest in the equivalent of a 401K, called a Simplified Employee Pension Individual Retirement Account (SEP IRA). Each SEP IRA needs to be in a corporate officer’s name, because once it is in their account, it is personal income, so if they cash out it is taxable. For some reason, you do need to be 21 for a SEP IRA, even though it doesn’t make sense to me. You’re allowed to be 18 and start an S Corp. In any case, you can teach the kids the concept by starting a joint SEP IRA under your name.

Please share your stories about family business start-ups that include the kids. I’d love to know what worked what didn’t.

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