When it comes to teenagers and money, they need to learn how to handle it. As a parent, it is your job to help teach them financial responsibility so when they make their way out into the real world, they are properly prepared. Websites like Quicken and MyFICO offer some great tools for teaching teens about money and can help get your teen on the road to becoming financially responsible. Below are some helpful tips on how to help your child learn about money and begin introducing him to a solid financial future.
Starting your teen on an allowance for chores done around the house is a great way to invoke responsibility where money is concerned. If you're teen has to earn the money he spends and cannot simply open his hand and pout every time he wants something, it will make him more responsible about what he buys and how he treats his belongings. The allowance should be age appropriate as well as relative to the amount of chores he completes throughout the week. Do not offer a large allowance to a child that does nothing and in the same way, do not offer a small allowance to a child with several responsibilities around the home. Be fair just as an employer would and never pay for work not completed.
Getting a Job
If your teenager shows desire and has the time for an outside job, encourage it. Having to be at work on time, do a meaningful days work, and then earn that paycheck at the end of the week is a great way to teach teens about how to handle their money. Teens who work for their own money actually spend less on junk and begin to appreciate the essence of saving for a rainy day.
Bank Accounts and Debit Cards
Most banks offer student checking accounts and saving accounts that will come with a debit card. This is a great tool for them to begin understanding how to manage their money properly and keep track of their spending. Keep in mind that as a parent your name will be on the checking account as the primary account holder. If you do not assist your child with the management of the account and things go wrong, those charges will be yours to pay.
Create a Real Life Budget
Have your teens create a virtual job that they feel they will be doing in the future as an adult, get a salary summary for that position, and sit down with your teens and discuss taxes, 401k's, insurance, Social Security and other fees that will be taken from their paycheck. With the amount that is left, create a budget with them to show where their money will go with the cost of living. This is a very useful tool for teens who believe they are going to live in a beach house in Malibu.