Tips to Help Parents Instill Financial Responsibility in Their Teen
Three ways to help your teen manage their money
- Discuss monetary issues with your teen on a regular basis.
- Demonstrate your family's values and beliefs in regards to money.
- Talk to them about their paycheck and how they plan to use it.
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Show your teen that saving money is important
- Talk to them about their future. Show them the advantages of having money saved when they are ready to go to college or live away from home for the first time.
- Help them plan for emergencies.
- Help them set financial goals.
Encourage your teen to put more money in their savings
- Set guidelines - half of gift money goes in savings.
- Show them how savings can grow over time.
- Set goals and then reward them by putting additional money in their savings account.
Promote good spending habits in your teen
- Be a good role model - monitor your spending habits.
- Give them the opportunity to learn from their mistakes. If they spend all of their money on a new cell phone and don't have enough left to go to a movie with friends, they'll have to miss the movie this time.
Activities that can help your teen learn to manage money responsibly
- They watch you manage expenses, so spend wisely!
- Allow them to make their own purchase decisions.
- Let them be a part of the decision making process for a family purchase.
Allowing teens to have a credit card can teach them responsibility when parents are also involved
- Make sure the card has a low limit and that you have access to the account.
- Monitor the activity on the account to ensure good spending habits.
Tips to show your teen the importance of budgeting
- Make them responsible for some of their own monthly expenses, like car insurance payments.
- Help them set up a budget and compare income to expenses.
- Incorporate savings into their budget.
Help your teen understand money isn't the most important thing in life
- Encourage them to volunteer in the community.
- Teach them to appreciate what they already have and not focus on what they don't.
- Ask them to help out around the house for reasons other than their allowance.
Teens should understand the difference between a want and a need
- Explain basic needs - clothing, food, shelter - are required to survive.
- Explain that wants are designer clothes, fast food, and five star hotels.
- Help them establish a limit on their "wants" spending.
Let your teen handle these activities to build a stronger sense of good money management
- Let them handle their own deposits and withdrawals.
- Let them make their own monetary decision, with your guidance.
- Let them balance their bank account statement.
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