Teaching teens smart money habits can help them pave a path for financial stability in the adult years. A CBS report stated that experts claimed money lessons would stay with children and teens as they grow older. Some of the simplest lessons about spending money and saving money can impact a teen’s life and set him or her up for success in the future.
1. The ABCs of Budgeting
When you teach your kid about budgeting, you’re helping to prepare them for college and for being on their own. Budgeting is done in very simple steps.
1) Calculate expenses
2) Calculate income
3) Determine how much is left over for spending and saving
2. Responsible Spending
To help a budget work successfully, teaching your teen the importance of wants and needs can help him to see that he’ll be financially sound and more independent with smart spending habits. This lesson is about weighing short-term rewards vs. long-term rewards.
3. Help Your Teen to Discover Budget or Free Entertainment Options
A teen may think he can’t have any fun if he’s not able to spend a lot of money. Learning to have fun on a budget means learning to find things that are enjoyable to do that don’t put a big dent in the pocketbook. Consider showing your teen the many options he or she has for entertainment that are free or low cost.
4. Encourage Your Teen to Be a Giver
Helping teens to understand the value of giving to charity helps them to find value in saving and spending wisely. When teens realize they can contribute to a camp for disabled children or provide a meal for a homeless child in their community, this budding philanthropy is inspirational to them to be good stewards of their finances.
5. Give Them a Part in Grocery Shopping
Taking your youth to the grocery store with a list and a budget is a great way to help him learn to shop for necessities on a budget. Many teens do not understand the cost of food or living expenses, and this is an ideal way to provide a valuable life skill.
6. Open a Savings Account
When money is out of sight, it is more often out of mind. It’s easier to spend money that is quickly accessible, and this makes a saving account an asset. Encourage your teen to put away a percentage of the money he receives from a job or allowances. This is a great lesson to teach youth about planning for the future.
7. Teach Your Teen to Price Compare
Whether it’s shopping for a college or shopping for a new phone, teaching your teen to price compare will help him to realize how far his money can stretch. This is an effective habit to instill that supports good budgeting skills.
8. Reduce the Amount of “Free” Money Your Teen Receives
If a teen rarely must work for his money, it will have little value to him. Encouraging youth to get a job or work for allowance money helps them to feel pride, and it also teaches them they must work for things they want. This habit also reduces patterns of excess spending.
9. Introduce Jar Savings
Jar or personal piggy bank savings is a great addition to an actual savings account. Let your teen know if he puts extra coins or dollars into the jar, they’ll quickly add up. This instills a lesson that even the smallest savings can be helpful. It’s also a great way to show your teen how to save money for Christmas gifts or for going to the movies with friends.
10. Make Your Teen Responsible for Some Bills
Giving your teen the responsibility of paying for his car insurance or his phone bill are excellent ways to set him up for reality and responsibility in the future. If kids have no experience with financial responsibility, it will be more of a struggle for them later in life.
