When my 13-year-old son, Joe, said: "You never spend any money on me", I had a sense of déjà vu. I had the audacity at about 14 to accuse my mum of not spending the whole of her child benefit on my sister and me, so she thrust the full £20 my way each month and refused to spend any more. I soon learnt my error.
So I set Joe a challenge. I asked him to write down everything we had spent on him over the past year, month by month. He added it all up and divided it by 12, making £200 a month. He opened a bank account and I transferred in that much each month. He now has to buy everything from underwear and school uniform to his treasured cricket bat and match fees. He has had an annual "pay rise" and in 18 months, he has gone bust only twice.
I've made it sound easy. But logic, facts, evidence – these have no place in teenage brains. Joe's first attempt at compiling a list of what we spent on him was as fictional as the Lehman Brothers' balance sheet. Most of the liabilities run up by the Bank of Mum and Dad did not appear.
Through what felt like Monty Python's "what have the Romans ever done for us?" sketch, Joe begrudgingly added items to the list. It took days to complete. He would get grumpy and skulk off, returning the next day after school to add more. By January 2009 we had agreed to pay him £200 a month.
Then he needed a bank account that would give a teenager a bank card – I didn't want him walking the streets of Deptford and Catford with pockets full of cash. He had already had his mobile phone stolen from him on a bus in daylight. NatWest was the first bank I could find that offered a kids' account that included a solo card – meaning they cannot go overdrawn. The bank says it has now upgraded that to a Visa card but retained the no-overdraft settings.
I expected Joe to go bust in – as finance people say – Q1 (the first three months). But no. He became a mean, penny-pinching hoarder. Spending fell to the bare minimum he could get away with. When we eventually threw away his hole-riddled underwear and insisted he bought some new, he went to Sports World and picked up a pack of five for a few quid.
Having worked out the expenditure by month, he knew that he had to save in the winter for the cricket outgoings in the summer. And he did just that. In fact it wasn't until the end of the summer holidays, when he went to buy his school uniform, that he first ran out of cash.
He was forced to raid the building society account he had had for years, which had been topped up every now and then with money from grandparents. But of course, when you are a teenager, it's never your fault. "Because it was a Bank Holiday, the money hadn't come into my account," Joe says. "I had to get the money out of my building society account. But then I paid it back afterwards."
All discipline then slipped away. Fashion, if that's what it's called, took over. Joe bought more hoodies than even David Cameron could hug. And we soon learned communication between parents and teens is fraught. If you tell them something, they fight you, and if you drop hints, they don't get them. So nothing we could say or do to express our surprise at how often he returned with shopping had any effect. He was also raiding the building society account.
"I bought myself a new cricket bat using savings. I got £175 from my bank account and the rest – it cost £250 – from my savings account," Joe says. "It was winter and I was buying lots of clothes, not realising I should have been saving for the summer. I would get money out of the savings account. If it was a large amount I'd pay it back, but if it was just £10 I wouldn't. You don't notice it at the time but it all adds up."
Cricket was the saviour. Joe was asked to attend training for the London Schools regional side – 12 weeks of Saturday night indoor nets at the Oval. But he needed £120 for the training and he didn't have it. "I had to ask if I could pay £10 every week instead," remembers Joe. He took his building society card with him the first week in case they insisted on payment up front and he had to find a cashpoint sharpish.
By Christmas, Joe realised that proving how "little" we spent on him had resulted in him not having enough to live on. It was time for pay negotiations. I accepted his first demand (£10 a month extra) and he immediately realised he should have asked for more. Only then did we get started on how negotiations work.
His £30 increase lasted only two months. Joe got a girlfriend and, despite our warnings that he was spending too much on the phone, he ran up a mobile phone bill of more than £500 in two weeks – luckily I looked up the bill on the Vodafone website before the end of the month. One call was for nearly four hours and cost more than £70. When he split up with her some months later Joe famously said: "We ran out of things to say to each other." That line itself almost made it worth us stumping up for a chunk of that phone bill. Joe emptied his now depleted savings account and is paying back the rest though a reduced allowance.
Despite it all, Joe would still rather be paid this way. "The best thing is you don't have to ask for your parents' blessing about what you buy. And I can buy stuff without having to carry cash – my friends have to go home and get cash. But you don't always realise how much you are spending. £10 every now and then soon adds up to £60. I now check my balance at the cashpoint, which I didn't do before, and I look at my statements.
"I've learnt not to spend money on unnecessary things. When you get a chance, save it, because then when you really want something you'll have the money to buy it. I'm much better now. I know I'm going to get into another tricky situation but it's better to learn about it now and then it won't happen again when I'm older."
How to fund your teenager
* Peter White, who runs youthmoney.com, a website devoted to helping young people understand financial matters, says: "The Bank of Mum and Dad is both an invaluable support and a potential barrier to responsibility and financial independence. Teenagers whose parents regularly bale them out of debt problems will take longer to learn. Much financial education misses the point because it assumes individuals act rationally and according to their own medium- and long-term interests. They don't. In real life, a lot of spending is done in groups, influenced by peer pressure, and is impulsive and intuitive."
He suggests that most adults have a secret budget for "completely daft expenditure that I didn't want or need but seemed a brilliant idea at the time". Kids are rarely allowed that. Sometimes kids overly worrying about debt can be an even worse problem.
* Maxine Norris of NatWest's Moneysense says children's ability to manage money, how much they handle and where it comes from, varies hugely. Even understanding a bank statement – and that transactions are sometimes delayed and don't appear – can be an issue.
* Useful resources include the Consumer Financial Education Body, which has a Money Made Clear website, ind.pn/bEgo7D.
* Teachers can get help from the Personal Finance Education Group, via a programme called Learning Money Matters: ind.pn/c0hW5w.Reuse content