Things You Will Need
Experience handing debt and money
Step 1Allow teenagers to handle money on a regular basis. Teaching a teenager about money is critical to their future as a person who will be responsible for bills! Allow the teen to handle money even if it is a small amount given each week. Let the teen have the choice of saving or wasting the cash.
Step 2Offer the teen a deal that can interest him or her in saving money. One way to teach teens about money is to interest them in saving money. For example: If you give $5.00 to your teen each week state that you will match each dollar saved up to the amount you are comfortable with. So if the teen saves $2.00 you will match the $2.00 with the understanding that the money may not be removed for savings unless they are willing to forfeit what you have deposited.
Step 3Let your teen incur debt. A simple way to do this is allow them to order something small, such as a magazine subscription or a premium TV channel. The teen must then pay for this with their funds. No funds? The subscription or channel is canceled. Teens that see what little they get for their cash may not be too quick to spend it in the future.
Step 4Allow your teen to use layaway. A good way to teach a teen about money is by using layaway. The teen must make the weekly payment before getting the prized item. This is especially useful when your teen would like an item you are not willing to pay for, and does encourage frugal shopping.
Step 5Introduce prepaid credit cards to your teen. An easy way to teach a teen about money is with prepaid cards. The prepaid cards as well as gift cards can be a great budgeting tool for teaching teenagers about money. There is no way the teen can spend more than is on the card, so the risk is removed. This is another method that can teach one to be frugal.
Step 6Teach teens about money by allowing them to have a limited credit card. If you have an older teen who is away at school or on the road with their car you may want them to have a credit card. Teens will learn about money easily if they have a credit card with a small limit that is only for gas and or an emergency. These things happen to all of us and a credit card can be a protection when it does. You may be interested to know there are credit cards available that can be linked to you so that you can control how it is used and where it is used.
If you teach your teens about money they will have the right idea about how things should be. If you don't teach your kids about money they may learn from irresponsible friends and spend their adult life making wrong decisions.
Tips & WarningsYou know your teen better than anyone. If you feel they will not do what is correct with money exercise caution. You are trying to teach them a skill, not enable them to spend what they do not have.