Tools for Short Term and Long Term Goals
Are you concerned about your teenager’s ability to manage money wisely? Today’s financial landscape is more complicated and risky than that of previous generations. However, there are ways to empower your teen to make smart money choices now, as well as provide skills that will help them become more independent adults.
Why Teach Money Management?
- Not saving money for emergencies or major expenses.
- Not understanding how to plan and stick to a budget.
- Inability to secure a mortgage and buy a home.
- Not having enough money later in life to retire.
- Getting sucked into the black hole of credit card debt.
Teens need to learn and practice how to manage their money early to avoid missteps that will follow them throughout their working lives.
Start with a Checking and Savings Account
Use a Debit Card to Teach How to Spend Wisely
Advise Your Teen on Creating a Budget
- Teach them to track their spending for a month, which is easy to do with online banking tools
- Show them how to divide their expenditures into groups (food, clothing, entertainment, etc.)
- Help them determine how much money they actually need to meet their expenses
Set Financial Goals with your Teen
- Plan a trip or student exchange program
- Choose to make a major purchase, such as their first car
- Pay for college
Encouraging your teen to have these discussions gives them a better understanding of how money works and an appreciation for the fact that items have a cost to them – and they’re worth planning for.