Teaching Your Teen Good Money Management

Teaching Your Teen Good Money Management

Okay,​ you want your teenager to​ be more responsible with money. Do you remember when you were a​ teenager? Did you act responsibly with your money? What were some of​ the​ things your parents did to​ teach you about handling your money better?

In this article we​ will discuss some of​ the​ ways you can teach your teen to​ be responsible when it​ comes to​ both money and credit. we​ will discuss several options in​ regards to​ credit and cash management for teenagers.

Many of​ us,​ even as​ adults,​ don’t really know a​ lot about money management. This article may also help you as​ an​ adult manage your money and credit better. First let’s discuss goal setting. Why do you need to​ manage your money? What are you trying to​ accomplish?

The first thing you can introduce your teen to​ and maybe even yourself to​ do,​ is​ tracking where your money goes. How many times have you asked,​ “Where did I spend all that money?” if​ you have ever asked that then tracking your money can give you great insight into managing your budget better.

There are workbooks you can buy or​ you can use a​ simple notebook. Have your teen do this with you so you can both learn together. if​ you make it​ a​ family experience,​ your teen is​ more likely to​ pay attention and participate,​ because they will get to​ see how you manage your money too. it​ has the​ extra benefit of​ making you manage your money better to​ set a​ good example.

In this new workbook you and your teen write down every expense. Every time you or​ they spend money on​ ANYTHING,​ it​ gets written down. Not in​ a​ category,​ what was actually paid for with the​ money. You will be able to​ review this later when building categories like,​ “Items I could have done without.”

When you review your workbooks together,​ trade them. Each of​ you can mark what expenses the​ other probably should not have paid out and how much money you could each have saved if​ you didn’t make those extra expenditures.

It isn’t a​ bad idea for you to​ make a​ couple of​ mistakes on​ purpose so your teen gains confidence that they can handle their money and identify what expenditures were not necessary. You need to​ understand that the​ spending habits your teenager acquires in​ their teens will stay with them for the​ rest of​ their life.

An allowance is​ okay,​ but just until they get a​ job. Never make the​ allowance enough to​ get the​ things they want most. Make them learn to​ save their money up to​ buy those things. Once they do have even a​ part-time job,​ no more allowance. They will respect the​ money they earn a​ lot 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 have been doing the​ workbook with them,​ this 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​ you two have been doing your workbook and marking down everything you spend money on,​ managing a​ debit card will be easy. Also by continuing to​ do the​ workbook,​ you will both learn how to​ save more money because you will be more aware of​ where your money gets wasted.

We all want to​ help our teens and we​ want to​ buy them nice things,​ but as​ parents we​ also need to​ teach them responsibility. Nowhere is​ that more important than teaching them to​ be responsible with money and credit.

Buy them the​ necessities,​ but make them pay for the​ extras. That applies to​ clothing,​ school supplies,​ or​ anything else,​ especially where your teenager decides they want the​ better,​ more expensive version of​ the​ items in​ question. Let them pay for the​ extras and they will appreciate their money much more or​ will learn to​ do without the​ most expensive item.

If you help them with the​ purchase of​ a​ car,​ offer to​ match them dollar for dollar toward the​ car. if​ you do plan to​ buy the​ car for them,​ make them responsible for the​ payment of​ the​ insurance,​ gas,​ and other extras. That will also have the​ added benefit of​ teaching them to​ respect and take care of​ their automobile.

I hope this article has given you some ideas about how to​ teach your teen how to​ handle credit and money. Just to​ repeat one thing,​ remember that what you teach your teen about money and credit now will determine how successful they will be later in​ life. So take the​ time to​ teach them.

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