Teaching your teen to be responsible with money can be a challenge. Most of the parents I talk are frustrated because they do not feel that their teens understand the value of money – or how hard it is to earn.
You can teach your teen to be responsible with money, though, by taking a very simple approach: let them have some, let them choose how to spend and save it, and help them understand banking choices. Given the economic crises that continue to happen, this is a skill that can serve your teen throughout life.
Purchasing Power
The first way to help your teen understand how to be smart with money is to talk to them about the value of what they purchase. Take them shopping with you when they are young. Let them help you determine what is a good buy and what is not. Show them how to shop by comparing the price per unit instead of just the total price. Help them recognize marketing ploys that are intended to part them from their cash.
Give your teens an allowance or let them earn money doing chores, odd jobs, or having a part time job. Teach them to save a portion of what you give them and let them spend some. Allow them to make decisions about what they spend, even bad decisions. They will learn quickly what buyer s remorse feels like and become more selective with what they buy.
Teen Checking and Savings Accounts
Your bank should offer some sort of free checking or savings account or student checking or savings account that you can help you teen open. Having a bank account is one of the best ways to help arm your teen with the money knowledge he or she needs to get through life. Help your teen learn how to balance the bank statement, and teach him or her about the different kinds of accounts there are available. Even if your teen only adds $25 a month to a savings account, they can have $300 plus interest at the end of a year.
Teens and Credit
While credit rules continue to change, college age teens are heavily marketed by credit card companies and often get way over their head with debt. As well, teens often must take loans in order to fund their education, particularly in the Canada and the U.S. Help your teen develop good money habits and establish a good credit rating with a credit card. Teach them to use the credit card but pay it off each month. Help them shop for the right credit card with the best interest rate and terms to give them habits that will serve them well throughout life.
Your teen will benefit from having spending and saving, so the more exposure you can give them to things like grocery shopping, decision making with large purchases, and banking will provide them with the necessary skills to manage effectively throughout life. Start talking to your teen about money early – it is an investment that will pay huge dividends.
Author Resource:
Norbert Georget is an accomplished professional speaker, teen motivator and author of the book, No-Nonsense Parenting For Today’s Teenager – How To Feel Like A Good Parent Even When Your Teenager Hates You. To learn more go to http://www.parentingtodaysteenager.com/home2book.html
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