Teaching Teens About Money
Teenagers learn by gradually taking on more and more responsibility. For many parents, this involves giving their children a limited amount of control over financial decisions. According to recent figures released by Teen Research Unlimited, teens aged 12 to 19 spent an average of $91 per week. This weekly spending figure includes both teens’ own money and the cash they receive as gifts and allowances.
Another effective tool is to get them involved in the car buying process. Discuss what the car can be used for, who is responsible for gas, maintenance, etc. Show them how auto insurance works, including how much the premiums increase when they start driving or it they are involved in an accident or traffic violation.
Get your teenagers involved with your day-to-day personal finance decisions. Have them help you with the grocery list and show them how to shop smart by comparing prices and using coupons. Let them sit with you while you pay bills to show them how quickly monthly obligations add up, such as utilities, phone bills, the mortgage and insurance.
Encourage teens to save their money toward a major purchase, even offering to match their savings with an additional 50 cents per dollar saved. This is a great way to teach them the relationship between building a savings account and the positive rewards that follow.
Finally, experts from Money Management International point out that it is important to show teens how credit cards work. Too often, young adults who are issued their first credit card perceive it as “free money,” and find themselves in debt. Make them understand that the dollars they charge today will cost a lot more if they are not paid off consistently on a monthly basis. For more ideas on how to teach your kids about money, visit www.MoneyManagement.org.