Online Money Management For Teens
While budgeting might be second nature to some, it is usually something quite difficult to master. In saying this, it is important to try and teach your teenager how to save money and how to spend their money smartly.
This article explains the basics of teenage money management. This covers the introduction of money into your child’s life and having little responsibility for that money (i.e. pocket money), to having full responsibility for their money and purchases.
This is probably the easiest way to explain and to teach money management to teenagers.
Teaching Teens Ways to Save Money isn’t as Easy as You Think!
Firstly, there is no perfect age to start teaching your kids about money management. It is commonly advised that at around the age of 12, you give your child pocket money for about a year to spend on anything they want. Don’t give them too much; try anywhere from $1 to $5 per week. Tell them that they can spend it on whatever they want. Usually in exchange for the pocket money, your child will have to do the dishes or keep their room tidy etc.
The main reason to do this is to show your child what it feels like to have their own money.
You don’t have to pay out if your child fails to keep their room tidy. But perhaps a better idea is to pay the pocket money to your child, but take away the activity in which they’d usually spend that money. For example, don’t let them spend their money going to the movies or ten pin bowling. This way, they will have the money, but no-where to spend it!
Didn’t your parents seem to ground you all the time?!
So, What Happens Next?
When your teenager reaches 14 or 15, it is an idea to add to a bit more money (and responsibility) to their weekly allowance. You could give them their lunch money at the beginning of each week – this giving them a sense of greater responsibility. As well as giving them their lunch money, if you plan to increase their allowance too, you should make them save about half of it. Whether it’s for a family vacation, or even general savings, if you set a target, it will give your teens something to work towards and they will learn a few ways to save money.
When your teen reaches their 16th birthday perhaps set up a special account with their clothing allowance for the year. There are heaps of online money management websites that sell money management software. Using a good money management software program, you will be able set up a spreadsheet with the yearly budget.
When your teen needs to buy some new clothes, have them request the approximate amount and have them buy the clothes themselves. Once they return home with their new purchase, get them to update the spreadsheet to the dollar.
In no time they should realise that paying $200 for a pair or shoes or jeans is not worth it!
The Final Step For Your Teen’s Money Management.
When your teen reaches 17 or 18, they will think they know it all. If you are still giving them an allowance, switch to a fortnightly or monthly allowance. This will mean that they have to budget for the entire month. If they blow it all in one weekend, they will have to spend the rest of the month at home. They will soon learn to budget for the entire month! Why not set up an online money management account for them? Your teen will then be able to use this online money management account to monitor their spending, quickly and easily.