How to Teach Teens to Budget Money

Posted by Anonymous , 9/4/2007 Tags:TeachTeensBudgetMoney
Post By :
Anonymous
Rate:
Vote

How to Teach Teens to Budget Money

Introduction

Teenagers need to see how money works in the real world, including where it comes from and where it all seems to go.

Instructions

Difficulty: Moderately Easy

Steps

1

Step One

Explain to your teen how checks and credit cards work, and how banks operate. Be sure to mention interest payments and service charges.
2

Step Two

Give your teen a weekly or monthly allowance, unless she has a job and considers herself financially independent.
3

Step Three

Agree on what you will pay for and what the teen will pay for. Consider car insurance, gas, school clothing, fees for extracurricular activities, the phone bill, and so forth.
4

Step Four

Give your teen financial responsibilities that you have both agreed on.
5

Step Five

Teach your teenager how to make a budget. Make a list of the teen's monthly expenses and the dates they must be paid. Sit down with the teen and explain how her income or allowance must be managed to meet the expenses.
6

Step Six

Have your teen open a bank account. Most teenagers are impulsive, so not having cash in hand may keep the spending down.
7

Step Seven

Set goals. Talk about saving for college, cars, entertainment systems, mountain bikes or other big purchases. Make clear what you plan to pay for and what you expect of the teen.

Tips & Warnings

  • Part of teaching a teenager to be financially responsible involves the parent not caving in. If your teen blew all of her money on a new outfit at the beginning of the month and now doesn't have enough left to go to the movies with friends, be sympathetic but don't bail her out.
  • If you have to get your teen out of a financial bind, make arrangements for her to pay you back over a designated period of time.
  • Most teenagers get offers from credit card companies while still in high school and can obtain a credit card without your signature. Putting this kind of buying power in the hands of an impulsive teen can sometimes be disastrous.

Overall Things You'll Need

  • Calculators
  • Credit Cards And Loans
  • Checking Accounts
  • Bank Account
Tools: |