Teaching Your Teenager About Financial Responsibility
Posted on: 2 June 2016
When it comes to being the parent of a teenager, there's plenty of things to worry about. From social networking and texting to hanging out with the wrong crowd, parents certainly have their hands full. One of the most important things your teenager should learn about is how to manage their own finances at an early age. The sooner they start, the better off they'll be when it comes time to live on their own and deal with things like credit scores and paying bills. Here are a few tips to help you teach your teen the ins and outs of financial responsibility.
Give Them A Checking Account
It's a good idea to sign your teenager up for a checking account as soon as you think they're ready. This small step will help them learn more about balancing a checkbook early and how to keep track of their incoming and outgoing money. You can opt to sign them up for a joint account with you or assign them their own. Either way, having their own checks and checking account will teach them about how to be responsible with their money in a tangible, hands-on way.
Encourage Savings
Saving money is never easy, even as an adult. But if teenagers start saving now, they'll get used to the concept of putting some money away for a rainy day or for their future. Your teenager can do this either by setting up a separate savings account with the bank, such as Juniata Valley Bank, or by having you put their money away somewhere they cannot gain access to it. As time goes on, they'll watch their money grow and it's a good lesson about how just a small bit of money put away can really add up. This is a good way to prepare them for the concept of saving for retirement and planning for emergencies.
Draft A Budget
Whether your teen loves to spend money on clothes, fast food, or music, they'll quickly see how fast that money disappears every week or month. Sit down with your teenager and have them draft up a budget that shows how much money they have coming and where it's going. Writing this information down is a good visual tool to show teens exactly how easy it is to spend money quickly if you're not paying attention. Even if they don't have bills yet, writing up a budget can teach teenagers how to better track their income versus expenses, which is a vital tool they will need to use well into adulthood.
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