|
|
Teaching Your Teen Good Money
Management
by Jennifer Tarzian
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.
For more information about credit, go to
http://creditcards.youngparentsmagazine.com. Jennifer also has a lot
of information at
http://www.youngparentsmagazine.com for parents. Chris McElroy has
been an advocate for consumer rights on the Internet since 1995 and also
runs a missing children’s organization at
http://www.kidsearchnetwork.org.
|
|
