WASHINGTON – Here's a summer "enrichment" program that will be really good for your teen: A low-skills, low-pay, grind-it-out summer job.
There's little that's better for introducing responsibility, self-confidence, new friends and some walking around cash. Not to mention appreciation for all of the education you're expecting them to get.
But this year, jobs are in short supply. The Center for Labor Market Studies at Northeastern University is projecting historically low teen employment levels for the summer of 2007.
Here's how to help your kid grab one of the jobs that's out there and make the most of the money he earns.
— Tell him to cast a wide net. It's not just the obvious employers like camps, swimming pools and ice cream stands that hire for the summer, suggests Shawn Boyer of Snagajob.com, an employment site that specializes in hourly jobs. He says he's seeing more teen jobs being listed by nontraditional employers such as banks looking for tellers and merchandising companies looking for workers to restock shelves.
— Encourage pavement pounding. It's often the neatly dressed, polite person who walks in the door at the right moment who gets the summer retail job. Tell your teen to fill out every application he's offered, and to fill it out completely. "That means, if you don't have any work experience, you list your extracurricular activities and leadership positions," says Boyer.
— Hold a paycheck economics class. It's sad, but not uncommon, to find college graduates who don't know the first thing about income tax withholding, FICA and other "surprises" lurking on their pay stub. When your daughter gets her first check, go over it with her. Explain the difference between gross and net and where all the deductions go.
— Let her spend some of the money recklessly. After working all week, she's likely to blow some of her cash paying for text messages, or music, or a too-expensive trendy top you know she won't wear more than three times. That's her prerogative, and it's what's great about earning your own money.
— Make them save some of it. A Roth IRA is one of the best investments teens can make. This year, a working teen can put as much as he earns into a Roth IRA, up to $4,000. That money can sit, untouched, for most of his life and really put him ahead of the grade when he's older. Even without another dime being added, it would compound to over $215,000 tax free, over 50 years. Or, he could pull money out without penalty and use it to cover college costs. Or his first house.
The youth advantage of Roth accounts isn't just in the long-term compounding. Roth contributions are made with after-tax income, but since teen income is rarely high enough to produce much of an income tax burden, it's usually a painless way to make a contribution without having to pay a lot in taxes on the money that's contributed. If you can afford to contribute to your child's Roth (after you've filled your own), you may want to match his contributions to encourage this savings habit.
— Get them a checking account. If they are old enough to be employed, they should be able to have their own checking account. Not every bank will open a checking account for someone under 18, however, so shop around and check with your credit union. If you want to start them off with some training wheels, you can set it up as a joint account, so that your name is on it too. Then you can both go over monthly statements, and use those sessions as teaching opportunities for such subjects as debit card use, balancing checking accounts and the like.
— Explain the costs of employment. You may be providing the car and the insurance and the costly gasoline that enables your kid to work. That's okay. But make sure he has some understanding of how much those items cost. Having a job is great, but it's not free.
Linda Stern is a freelance writer. Any opinions in the column are solely those of Ms. Stern.