If you are a parent with teenagers you know how expensive they can be. In fact, many teenagers start working just so they can afford the extra things they want that Mom and Dad are no longer willing to pay for. This concept is actually not a bad idea, except for the fact that many teenagers have no idea how to properly manage their money once they start working. They tend to think that they have all of this extra money to blow on things that they want. The good news is that if you are a parent of a working teen, there are things you can do to teach your teen how to properly use their money. If you started teaching them the importance of money from early on, your job is that much easier, but even if you are just starting now there are ways to help your teen become more responsible with their money.
Here are some tips to help teach your working teen how to properly use their money.
You can teach your children about paying bills by using their paycheck as an example. In this lesson you should sit down with your teen and go over their first paycheck with them. You should make sure that they understand where the money for taxes and stuff is going and make sure they understand their entire paycheck. Then allow them to write out a list of bills that need to get paid out of their paycheck. This will give them a better idea about paying bills and what the most important bills or luxuries are to them. They will get a more realistic picture of what little money is left over for luxuries.
Another thing that you can do is tell your teen that they need to divide their income into different parts, such as spending, and short and long-term savings. By choosing the amounts that they want to set aside for these categories, your children will learn personal finance discipline. Keep the allocated funds separate to ensure that savings are not spent: long-term savings in an investment fund, short-term savings in a bank or fund, and spending in a jar, piggy bank or wallet.
Another thing that you should do is to sit down as a family with your teenager and tell them what you expect them to do with their money. For example, if you want your teenager to set aside a certain amount, you need to tell them how much they need to set aside, and you can also offer to match this amount to help pay for college. Basically what you are going to do here is create a budget with your teenager so that they can better manage their money. But a good thing to keep in mind is to let your teenager create their own budget; this way they are learning how important a budget is.
An important thing that you can do to help your teen use their money properly is to set a good example. Teens, like other children, learn a lot from watching what their parents are doing. If you are wasting money buying video games or movies, then there is a higher chance that your teen is going to end up doing it as well. Because they see you doing it they think that is the right thing to do. The same thing holds true for saving your money. Your best bet in teaching your teen to use their money properly is to show them how by setting a good example.