3 easy ways to talk to your teen
Teaching kids about money should start early, suggest experts. From the time a child is in elementary school, they should be getting lessons on money management, but experts recommend ramping up the lessons as your children reach their teenage years. Teaching kids about money at a young age is great, but as they enter their teen years, cash is going to become a much more tangible concept, and budgeting will become paramount. After all, they’ll be leaving for college in just a few short years and gifting them with financial knowledge can only help. We have a few ideas about teaching kids about money that might help you open a dialogue with your teen.
Set Them Up with a Bank Account
Getting your teen to understand how quickly money can be depleted is essential, but it’s a lesson that many parents fail to teach. Setting your teen up with a student checking account is one way to do this. Sit your teenager down and discuss how checking accounts work, any fees that are associated with the account, and how they should proceed with using their account. Once you’ve explained the simple rules of the account, take them over to the bank and set up that account with them.
Make sure you have access to this account, and that it is set up to ensure your teen cannot overdraft. Monitor the account on a weekly basis and set up a recurring appointment with your teen to discuss their spending. Online banking makes it easy for you and your teen to see how money is being spent, and how quickly it is depleted from the account.
Help them Set up a Budget with an App
Your teen is a digital native, and thus are likely more comfortable with digital tools than a pen and piece of paper. Research budgeting apps and pick one that you feel your teen will like. You can go through each option and allow your teen to choose one that has a user interface they find most natural. Help them set up a budget, and ensure the app alerts your teen when they’ve gone over the budget in a set category.
Even if your teen isn’t making his or her own money with an after-school job, a budgeting app can still help teach the importance of making money last. Look for an app that allows you to set up budgets for multiple categories like bills, entertainment, and shopping. Each month sit down with your teen to go over their spending and how they can utilize any leftover money for more significant purchases. Having an open dialogue with your teen on budgeting will ensure they ask you questions if they have any.
Discuss the Benefits and Pitfalls of Credit Early
Don’t send your teen out into the world with a lack of credit knowledge. Teens should be made aware of credit cards, how they work, and how they can be dangerous. First, you’ll need to educate your teen on how credit cards work. Once they understand credit, consider sharing news articles about credit cards with them, discuss them openly and help them understand how to utilize credit responsibly. If your child understands credit and how to wield its power, they’ll be less likely to fall victim to the credit mistakes many people make well into their adult lives.
Teaching kids about money might seem like a big undertaking, and it often falls to the wayside as parents deal with more pressing issues. While it's understandable why financial literacy tends to seem unimportant for children, they will grow into adults one day. The best thing you can gift your child with is an understanding of personal finances, so they avoid the financial pitfalls that many young adults stumble into down the road.