Teens want to do well. But learning to manage money can be a challenge. Especially when they’re faced with tight budget constraints and lots of wants, ranging from the newest iphone to a night out with friends.
Teens also have a harder time saving for some distant future that seems impossibly far away, so convincing them to set aside a portion of their spending money can be difficult. Parents are tasked with the responsibility of teaching their teens about financial responsibility, and offering them the tools to do it. Here are a few suggestions:
1. Be open
A lot of parents make the mistake of being secretive about their money with their children. Instead, talk to your kids about how much you make and your expenses each month. Say, “This is how much we have a month – and we pay for the mortgage, TV, the bills, food – and this is what we have left over at the end.”
2. Get them a credit card
It’s important for teens to have experience handling both virtual money and cash. DECU offers a Student Visa Program, specifically designed to help teens establish good credit habits without the risk of too much debt. And bonus, teens will begin building good credit.
3. Encourage them to make some money
Babysitting, waiting tables at restaurants, summer internships, launching their own lawn care business – it’s all about making their own money and learning to manage their cash. Encourage your teen to explore her options and gain work-related experience.
4. Start the savings habit
College is more and more expensive, and careers are taking longer to build. And though saving for the future can be an abstract concept for teens, parents can involve them in conversations about saving for college to help them start thinking about it.
5. Write down their needs versus wants
Encourage teens to write down their needs and wants on a piece of paper to help them prioritize how to spend their money. That central tenant of budgeting can help them move closer to their goals, whether it’s owning a new pair of trendy sneakers or going out with friends for pizza on Friday night.
6. Let them see your generosity
As a parent, it’s important that your children see the ways you support your community. An offering at church, a donation to a local charity, even providing cans of food during a food drive. This is all a part of learning the power of resources, and how good choices result in positive impacts.
7. Let them make mistakes and pay the price
Some lessons, like investing in an emergency fund in case of a car accident, are difficult to learn until you learn them the hard way. It’s all about having your own skin in the game. Parents need to sometimes step back and let their teens struggle with their own unexpected expenses.
DECU is here to equip your teen for financial responsibility. Talk to one of our Financial Service Representatives about our various products and services, specially designed to promote your teens independence in a safe, educated environment.