Our daughter needs a bailout from the bank of mom and dad. How can we help her and at the same time teach her the value of money? VICKY REYNAL responds

We have been giving our 16-year-old daughter a weekly allowance since she was seven.

We told her in advance that she would have to spend her own money on the prom, but we would be happy to cover the cost of the dress and the entrance fee. Everything else (transportation, hair, makeup) would have to be included in her budget.

However, she hasn’t and now says that if we don’t give her an extra £100, we’ll have to drive her to the prom (which she really doesn’t want) instead of riding in the shared limo with all her friends. What should we do?

CDW, by email

First of all, I think it’s great that you’ve been paying your daughter an allowance from a young age, as it’s a great way to teach kids valuable money management skills. The difficult balance and trade-offs between saving and spending, the discipline of resisting indulging her every whim, saving for a bigger purchase in the future, or even learning to spend and enjoy money. These aren’t innate skills, and having money from a young age helps us safely experiment with these options.

Your daughter didn’t budget or save enough to reach a goal she had set. Now, you need to find the right balance between helping her learn something from this experience and also empathizing with the fact that she’s only at the beginning of a journey and can’t be expected to get it right from the start.

Therefore, a firm and resounding “no” will not serve as a lesson. It will only make him angry with you.

A compassionate, unconditional “yes” may just teach your child that no matter what he or she does with the money, the “bank of mom and dad” is an unlimited resource and that getting it wrong has no consequences.

We need to find a middle ground. But it’s not just about giving him half the money and asking him to find ways to get the other half. It’s about creating a space where they can (hopefully together) reflect and find solutions. There are two key points to focus on.

1. What went wrong?

If she made a budget (something you hopefully encouraged her to do when you talked about setting this goal), did she get anything wrong? Maybe she miscalculated or didn’t do the research to properly budget for each item. Did she leave any room for unexpected expenses in her budget?

Is it that despite your budget, you failed to save and were unable to resist other impulses in the last month or two that hurt you financially?

Or is it that despite budgeting and saving, her friends have a bigger budget and want to go all out with transportation, something she didn’t anticipate and was a last-minute change of plans? If that’s the case, you might want to ask her how she managed it: did she tell her friends she didn’t think she could afford the limo? Did she try to suggest a cheaper alternative option?

It can be very difficult, but as a parent, you can have a conversation with her that will help her deal with countless future situations where she might find herself under peer pressure to overspend. You can acknowledge that it’s hard to be the one to say, “I can’t afford this,” but that if she doesn’t learn to do that, she may end up frequently going over budget and stressing about money.

The point is that instead of “blaming” her for her mistakes, you can help her figure out where she went wrong and what she could have done differently to prevent this from happening.

2. How to fix it

You can be honest and tell her that if you fix it and give her the £100, she won’t have learned anything from the whole thing. You want to help her figure it out and find a solution to her financial problem.

Brainstorm with her – what could she commit to to earn £100? Are there some items she wants to sell on Vinted/eBay to raise the money? Can she do a small job that would allow her to raise that amount? Or maybe there’s a recurring cost she wants to cut over the next few months (a membership?) or a reduction in allowance she’s willing to accept, in exchange for a £100 advance?

The solution is less relevant than the brainstorming process, because you are teaching her to think creatively, not to get stuck in despair and feel like a failure, but to get down to business and think of solutions. You are also teaching her that she can turn to you and that there are other ways to help her than giving her money and bailing her out of financial trouble.

3. Facing rejection

It would be totally age-appropriate for a teenage girl to not want to talk to you about this. “Just give me the money please, I don’t need a lecture” might be part of the repertoire you’re faced with in response to your efforts. However, try not to give up on your effort to give her tools instead of the easy rescue she’s asking for. It may seem like you’re damaging the relationship by not giving her what she wants, but you’re actually doing what’s best for her and, in the long run, your relationship. It will help you raise a daughter who isn’t overly dependent on you, but knows she can count on you for help, no matter what the problem is, financial or not.