Let’s face it. basic money knowledge for young people is often limited to spending, not saving. As a parent, you can have a strong role in teaching them. Money Management for teenagers doesn’t have to be difficult. You can provide shelter, food, and clothing all while teaching them financial literacy. We can educate our teens on how to make wise decisions when it comes to money.
In this brief guide, you will be presented with several small tips that will pay off in a big way in the life of your child as they grow older.
Money Management for Teenagers
- The first step to ensuring financial literacy is to set your teenager up with both a checking account and a saving account. The checking account should be designated as the account for daily spending and the savings account should be designated as the account for accumulating cash intended for the future.
- The next step is to provide your teenager with ownership over their spending. Instead of simply providing your child with money when they need things, provide them with a large amount and inform them that they are “in-charge”. If the teen fails to meet all of their financial obligations and does not stick to a budget, avoid the urge to provide them with more money. When a teen has money, they need to realize that it is designed for a purpose. If they learn this, they will resist the urge to make impulsive purchases. The teenager will start to learn that they must handle their financial obligations before indulging into their “wants”. This may be a difficult step and it may be a step that must be taken more than once; however, the rewards that will be reaped by the lesson associated with this step will prove to be exceptionally valuable to your child’s financial livelihood as they grow into adulthood.
- When teaching money management for teenagers, you should encourage a mindset for savings. When they receive money – whether from a job, an allowance, or as a gift – you should push for them to pay themselves first. That means, they should put away a percentage into their savings and a percentage in their checking account. You should then provide them with ways to make their money grow into more money.
Kids today are accustomed to immediate gratification. It is no wonder given the expanse of the internet and the electronic devices that are currently at their disposal.
Unfortunately, if they carry that mindset over to their money, their financial future is absolutely doomed.
If they grow into adults that are not familiar with money management, the economy will eventually suffer. As a parent, it is imperative that you educate your child on proper techniques for handling their money.
If you take the little steps in this guide, it will result in a big difference.