OK, you want your teenager to be more responsible with money. Do you remember when you were a teenager? Have you been responsible with your money? What were some of the things your parents did to teach you how to manage your money better?
In this article, we'll discuss some ways you can teach your teen to be responsible when it comes to money and credit. We'll discuss several options when it comes to credit and cash management for teenagers.
Many of us, even as adults, don't know much about money management. This article can also help you manage your money and credit better as an adult. First, let's talk about goal setting. Why do you need to manage your money? What are you trying to achieve?
The first thing you can introduce to your teen, and maybe do yourself, is to watch where your money goes. How many times have you asked yourself, "Where did I spend all that money?" If you've ever wondered, tracking your money can give you great insight into better managing your budget.
There are workbooks you can buy or you can use a simple notebook. Ask your teen to do this with you so you can both learn together. If you make it a family experience, your teen will be more likely to pay attention and participate because they will also see how you manage your money. It has the added benefit of being able to better manage your money to set a good example.
In this new notebook, you and your teen write down all the expenses. Every time you or they spend money on ANYTHING, it gets recorded. Not in a category that actually paid for money. You'll be able to see this later when creating categories like "Items I Could Do Without".
When you look at workbooks together, switch them. Each of you can mark which expenses the other probably shouldn't pay and how much money you could save if you didn't make those extra expenses.
It's not a bad idea to intentionally make a few mistakes so that your teen can gain confidence in her money management and identify what expenses were unnecessary. You need to understand that the spending habits your teenager will pick up in their teenage years will stay with them for the rest of their lives.
The allowance is fine, but only until they find a job. Never give yourself so much money to get what they want most. Teach them to save their money so they can buy these things. Once they are even part-time, no more contributions. They will respect the money they earn much more than the money you give them.
When your teenager is around 16 and has a job, help them open their own checking account. Teach them how to balance their checkbook. If you've made a workbook with them, it should be easy. You can help them get a prepaid credit card or teach them how to use the debit card that comes with their new checking account responsibly.
Again, if the two of you have been making a notebook and writing down everything you spend money on, managing a debit card will be easy. Also, by continuing the workbook, you'll both learn how to save more money because you'll be more aware of where your money is being wasted.
We all want to help our teenage children and buy them nice things, but as parents we also need to teach them responsibility. Nowhere is this more important than teaching them to be responsible with money and credit.
Buy them the essentials, but let them pay for the extras. This goes for clothes, school supplies, or anything else, especially if your teenager decides they want a better, more expensive version of the items in question. Make them pay extra and they will value their money much more or learn to do without the most expensive item.
If you help them buy a car, offer them dollar for dollar on the car. If you plan to buy a car for them, ask them to be responsible for paying for insurance, gas, and other extras. This will also have the added benefit of teaching them to respect and care for their automobile.
I hope this article gave you some ideas on how to teach your teen about credit and money. To reiterate, remember that what you teach your teens about money and credit now will determine how successful they will be later in life. So take your time and teach them.
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