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Teaching your teen to manage money and finances is one of the most important life skills that you can implement in them. It is a skill they need to learn now. And a skill that will benefit them for the rest of their lives.
The best time to teach your children about managing money is when they are old enough to “get it”, yet still young enough to be under your care and supervision. This way you can guide them, while still being able to have some control.
The lessons you teach your teen now will prepare them for the real world. You want them to be able to handle money responsibly. Your teen may not realize it now but, this will be one skill that could prevent them from a lifetime of hardships so it is worth the time and effort to do it no matter how they feel about it.
How to Teach Your Teen to Manage Money
Help Your Teen Find a Part-Time Job
The best way to teach your teen the value of money is by making them earn it themselves. Help them find a part-time job, even if it is just a few days a week. Having them earn their own money is by far the easiest way to show them the actual value of it.
When your teen works for their own money, they are far less likely to squander their money. And, you will also be instilling a good work ethic while you teach your teen to manage money.
Create a Budget Together
Teach your teen how to create a budget and manage it. This is a skill that a lot of adults struggle with, so by starting them early, you will set them up for a brighter future.
Sit down with your teen and show them the basics of creating a budget, how to balance it, and how to track expenses. Then let them maintain their own budget, with guidance from you, if need be.
Have Your Teen Open Their Own Savings Account
Have your teen open a savings account of their own. You will still need to go with them to open the account, but it’ll have to be a joint account up until they are 18.
When your teen manages their own savings account, they will feel like they are in charge. This may be one of the first times they feel like they are the boss; most teens will do their best not to “screw it up”.
Let your teen pick a savings goal to work toward, most teens will probably pick a car as their first savings goal. Work with them to determine the monthly amount needed to save to reach their goal.
Teaching your child to save when they are working toward something they really, really want should be pretty easy. But, if they do not stick with the savings plan, they don’t get the car. Plain and simple.
Teach Responsibility of Paying Bills
In addition to saving, your teen should be given the responsibility of paying at least one bill. You can have them pay their portion of the family’s smartphone plan or something to that effect.
Make sure you stay on top of them when it comes to paying their bill. If they do not have the money to make payment on the due date or are consistently late, you should consider giving them a taste of what would happen in real life.
What would happen to you if you didn’t pay your cell phone plan on time? Your bill will increase due to late fees, or you would get your service disconnected.
If your teen loses their cell phone privilege due to not holding up there end of the deal; I can pretty much guarantee you that it won’t happen again.
Teach your teen how to manage money, have a good work ethic, save money, and pay bills is one of the best ways to prepare them for the real world. By learning these skills, you will surely help them to avoid costly lessons when they are out on their own.
Do you have any tips that you have used to teach your teen to manage money? Please leave a comment to share it with us!!
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It’s *so* important to start teaching kids money principles at a young age. Far too many people are thrown into managing their finances during or after college, without any sort of formal guidance from parents, school, or anyone (but the media). This is a great idea to start working on these topics while your child is still at home and a teenager!
Thanks Brad!! Teaching them early will save them from learning the hard way later on down the road.