Money Management For Teens
Are you wondering how to explain the basics of money management to your teenager? This article covers from 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.
While budgeting might be easy for some, it is typically something that is quite difficult to master. But it is important to make an effort to teach your teenager how to save money smartly and how to use it.
Explaining Ways to Save Money to Your Teen isn’t Hard!
This is the most straightforward way to teach your teen good money management. Firstly, there is no right or wrong age to start teaching your kids about money management. The main reason to explain how to manage their money from a young age is to show your preteen what it’s like to have their own money.
Around the age of 12 is the time when most parents start to give their child pocket money. Try this for about a year and tell them that they can spend it on anything they want. But don’t give them too much; try about $1 to $5 per week. Usually in exchange for this pocket money, your child will have to keep their room tidy or mow the lawn etc.
Remember that you don’t have to pay the pocket money if your child fails to do their chores. Perhaps a better idea is to pay your preteen their pocket money, but not allow them to go ten pin bowling or whatever they enjoy doing – so they will have the money, but no-where to spend it. Sometimes grounding your child will let know that they can’t have one without the other.
What’s the Next Step in Teaching Teens about Money Management?
14 or 15 is a good age to add to a bit more money and responsibility to their weekly allowance. Try this; give your teen their lunch money at the start of the week – this will give them a sense of greater responsibility and learn about budgeting.
If you plan to increase their allowance too, you should make them save about half of it. Whether it’s for Christmas presents, or just general savings; if you set a target for them, your teen will have something to work towards.
You teen’s 16th birthday is a good time to set up an account with their clothing allowance in it for the year. When it comes that time of year and your teen needs to buy some new clothes have them buy the clothes themselves.
When they get home with their new purchase, ask them to update the spreadsheet to the dollar. This way they will be able to see how much of their clothing allowance is left. In no time they will realise paying $40 for a baseball cap is just not worth it!
If you have a look online, you will find many online money management websites that offer money management software at cheap prices. If you invest in a quality money management software program, you will be able set up a budget for your teen.
Finishing Your Teen’s Money Management Crash Course.
Your teen will think they know it all by the time your teen reaches 18. But there is one more step. If they are still getting an allowance, perhaps change to a fortnightly or monthly allowance.
This means that your teen will have to budget for the entire month. They will soon learn to budget for the entire month because if they blow it all in one weekend, they will spend the rest of the month at home.
Have you thought about setting up an online money management account for your teen? Both you and your teen will be able to use this online money management account to monitor spending and keep on track with their budget, quickly and easily.