Teaching your teens good money habits now will lay the groundwork for their financial future.
Let your teenagers be involved in the family budget, encourage them to open a bank account and expect them to take on some financial responsibilities.
Stress the importance of education and hard work
Children should learn the basics of saving and spending money from a very young age. By the time they become teens, they should understand the value of a good education and the importance of hard work to their financial future. Part of your role as a parent is to continue to stress these values and ethics during their impressionable teenage years. As they strive for independence, their judgment may sometimes not be the best, but you need to prepare them for the “real world” by building a foundation for future financial stability.
Open bank accounts
Allow your teenager to open both a checking and a savings account. These can be opened as joint accounts with you so you can keep track of your teen’s expenses and savings. If your child is working, agree to a percentage of his/her earnings that will be placed in savings from each check. Talk to your child about banking fees — especially overdraft charges.
Make a deal
If your teen is saving up for a used car or another high-priced purchase, make a deal that if he/she saves half the money by a certain date, you will put up the rest of the money. You can give this money as a gift or set terms your teen will pay you back over time. Teens can also learn responsibility by paying for their own gas money and car insurance.
Give your teen responsibility
Teens generally have three main sources of income — family allowances, earnings from part-time or seasonal jobs and gifts received from relatives. Whatever the source of their money, teens should have to pay for their “extras” from their own income. Of course, you will still pay for their necessities and some gifts. However, your teens should save up for big purchases, pay their own cell phone bills and be responsible for extra entertainment expenses.
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Be a thrifty shopper
Don’t expect your teen to be smart about money if you are frivolous yourself. Set a good example by being thrifty with your own money. Establish a monthly family budget and stick to it. Allow your teen to help with the shopping and budgeting decisions. Buy used clothing, furniture and other items whenever you can — it’s cheaper and eco-friendly. Use your credit cards wisely, and pay cash whenever you can.