One of the most important things that you can do to raise a money smart teen is to begin teaching them about money from an early age. When they are younger they are going to need to have more supervision when it comes to saving and spending money, but it is never too early to start. As they get older you should allow your child to learn from their mistakes rather than doing everything for them or correcting their mistakes. If they want to buy something that costs a large amount of money, and you think it is a piece of junk, allow them to buy the item and learn on their own that it wasn’t worth it. Children and teens usually learn by doing things, and as long as it doesn’t harm them in any way there is nothing wrong with letting them make financial mistakes.
Here are some tips on how to raise a money smart teen.
The best thing that you can do is to start early. Children as young as three years old can understand the concept of money and can start learning to recognize the different types of coins. Kids learn by example and see you paying money for things that you buy at stores, so your best bet is to begin talking to your child about money and how it works when they start asking you to buy things for them.
Give your child an allowance, and give them full control over their allowance. This is a great way to teach your children hands on about the importance of money, how to save it, what they need to spend it on and so forth. If you are going to give your child an allowance, an important thing to do is to give them a set amount on a set day of the week. If they blow their money before the next payday, talk to them about creating a plan to allow them to have money left over at the end of the week.
Another thing that you can do is to start encouraging your child to save some of the money that they are earning, either for long term or short term goals. You can do this by opening up a savings account at a local bank or you can simply have them put it in a piggy bank. The older your child is the more money they should set aside each week, but starting them off early is the best way to get them to save when they are older.
Allow your teens to do extra chores around the house so that they can earn more money. By earning more money they will be able to reach their goals faster and save even more money. But when it comes to assigning extra chores, don’t get those chores confused with responsibilities. Children and teens should not be paid for good grades or keeping their rooms clean, rather extra chores should consist of mowing the lawn, washing the car, etc. Take into consideration the age of the child before you start assigning extra chores.
Teach your child about the most important rule of money. Regardless of everything else, you are the one who earned the money so you should at least get some type of reward from it; how big the reward is depends on how much money you have made.
You should also talk to your children about creating budgets for their money. Talk to them about what they are spending money on, what they are trying to save up for and have them keep track of the progress they are making. If your children have a hard time with budgeting their money, have them write out a weekly expense list; this way they can see where they are spending their money and think of ways to save their money.