When parents see their children growing up, using cell phones and asking for money to go shopping with their friends, they tend to get a little nervous. It will ease your mind to teach your children how to save money on everyday purchases and the basics for living a financially successful life.
Here are a few simple ways you can help your teen on the way to sound financial independence starting today.
One thing to teach teens is to shop around for the best prices. If your teen is going to the movies, tell him or her to shop around and go to the movie theater that costs 50-cents less or go only to the matinee showings. When they go out to buy a new pair of jeans, give them $50 and tell them they can keep the change. They will realize that if they buy jeans for less money, they will have more money left over to do other things. When purchasing food items, buy generic products which have similar quality at a much better price. Take your children to the grocery store and show them that they can look at the price per ounce to make sure they are getting their money’s worth.
Give your child chores to do around the house so he or she understands about earning allowance money. The best way to teach your teen about money with an allowance is to give them all the money they will receive from you as a part of the allowance and no more. Make it so they don’t expect you to cover costs when/if they spend all the allowance money. This will help prepare for that mindset as adults.
Figure out how much money your child will realistically need for clothes, shoes, books, food (including lunch money at school), sports gear, entertainment, etc. If he or she wants something that isn’t affordable in the long term, your child will have to save up in order to make that purchase. This will teach patience and how to give up items he or she really doesn’t care about in order to afford what’s more important.
If your teen is getting an allowance, or has a job, encourage him or her to save 10%. A good rule to follow in the real world is to save a minimum of 10% of our income, and this will give your teen a head start. Ensure that your child knows that by putting money in a savings account, interest will accumulate on the own money.
Teach your children that credit cards should not be used to pay for things they can’t afford. Credit cards should only be used to boost your credit score by purchasing small items and paying the credit card off right away without having accruing any interest.
Get them a secured credit card to start. This will help them practice having a card without the possibility of running up a large amount of debt.
Make conscious financial decisions in front of your teen, and explain your reasoning aloud so they see why you spent certain ways. Show them the rewards you get by having good credit and savings. If the car breaks, for example, you can explain to them how nice it is to know you have the money saved up to deal with it and how horrible it would be if you didn’t.
If you teach your kids how to use money ahead of time and have them utilize their knowledge before they move out, you won’t be pulling your hair out after you ship them off to college, always worrying that they’ll make unwise financial decisions.
[author] [author_info]About the Author
Gus Samuels is a father of two teenagers and a personal finance consultant. He works with companies offering consumers a credit card for bad credit situations they may have temporarily experienced, and helps them eliminate debt and improve their credit scores.