7 money management tips for teens.
If you haven’t done so yet, anytime is the perfect time to talk to your teenage son or daughter about proper money management. It may seem like a serious (or boring) topic, but they need to learn how to shape their money habits the right way.
Helping your teenager start their journey to becoming financially responsible means teaching and guiding them how to earn and spend and how to save money. Proper money management for teens also means training your son or daughter to understand the responsibilities that come with borrowing money and repaying it.
Starting your teens’ money management training in their most curious and adventurous years is one of the best ways to prepare them to become financially responsible. Once they learn the value of earning, spending and saving money to start their high-interest savings account, they will slowly develop money management skills that can make them financially stable throughout their lifetime.
Here are some tips to help you start your teenager’s money management journey
Money management tips for your teen
Be a good role model
Your son or daughter looks at you as their role model, so you should be a good one. Practice responsible money management and make good financial decisions. Some simple ways to do this include creating a visually appealing family budget, focusing on what you need over what you want, organizing and paying bills on time, saving a portion of your hard-earned money, and avoiding impulse/unnecessary purchases.
Open a bank account for them
Your teenager should start learning money management while still living with you. The ideal way to start is by opening a bank account for them. It can be a savings or checking account; it’s your (and their) choice. What’s important is that your teenager will learn how to make a deposit and withdraw money, make debit charges, and write checks, among others.
A bank account will also help them become familiar and comfortable with common and popular financial tools (savings and checking accounts) and introduce them to financial institutions.
Teach your teen the importance of living within your means
One of the major reasons some people fall behind in their payments and bury themselves in financial debt is spending more than they can afford. Make your teenager understand why buying things that are too expensive or aren’t within your financial reach is not a good practice. Share real-life experiences and stories with them so they will have examples that they can easily relate to. Make them realize why following trends or buying what their friends have will not help them achieve their money management goals.
Guide your teen in creating a monthly budget
A monthly budget will teach your son or daughter how to control their expenses and allot their available funds to the most important expenses. Budgeting also allows them to compare their monthly expenses with their income and identify which costs they need to cut down.
Let them know that the purpose of their monthly budget is to ensure that they spend on the essentials first and pay off bills before using their money on anything else (including saving). They need to learn how to stick to their budget.
Teach your teen how to build a credit history
While your teenager is still living with you, help them create their credit history. You don’t have to give them their own credit card, just add them as an extension or authorized user of your credit card. Be sure to monitor their buying activity. Once your credit file is available, show the details to your teen and explain the concept and value of credit scores. Then let them know what their credit score is; share tips on how they can pull it up if it is low and maintain a high rating.
Do not forget to talk to your teen about debts and what can happen to them if they are not mindful of their spending; if they do not pay their debts on time.
Teach them to leverage the power of technology
Several apps and games can help your teenager learn how to save money, spend wisely, and even invest. These high-tech tools can serve as their supplementary money management learning activities.
Use money management apps
You’ll find a lot of money management applications that can help your son or daughter set their budget and monitor their spending and income. Using an app instead of a spreadsheet or a list written on paper will be more fun and interesting for your teenager. You can choose from several apps online; just be sure to use one that allows budgeting, expenses tracking, and saving. Some apps come with a reward system when your teen reaches their weekly goal.
Follow the tips enumerated above and help your teenager start their money management journey.
Samantha Green is the Content Marketing Strategist for BusyKid, the first and only chore and allowance platform where kids can earn, save, share, spend, and invest their allowance. A mom of two, she enjoys spending time with her kids and reading books to them.