Five Tips to Help Your Teen to Manage Their Money

When it comes to the teenager in your life, one of the most important things a parent can do is to teach them how to handle their finances. Here are five tips for your teen to help them manage their money.

Encourage Savings Early & Often

While saving money seems to be simple take a look at how many people go through their life with little to no money to fall back on. Teach them to save by having your teenage open a savings account and make regular deposits. Even if it is only $10 a month, your teen will be developing a pattern of savings that they will use later on in life.

Most banks will have a savings account were there is a low monthly maintenance fee or have the ability to have it waived if automatic deposits are set up. You can also teach team about saving for short or long term goals and how to go about doing it.

Understanding Credit

This is an extremely important money managing tips for your team, especially before they head off to college. Credit card lenders pry on college students by offering them free swag, like shirts and mugs, for each application they open. Before they know it, the college student has five credits cards and each one is maxed out.

Make sure to teach them about a credit score and how it can affect there every day life when they become an adult. One way they can learn more about credit cards is for them to have one before they leave home. A credit card with a low limit can teach them about financial responsibility when it comes to paying it off.

Balancing a Checkbook

Most of the time people rely upon their memory when it comes to how much money they have available to spend. With the advances in technology such as immediate online banking, balancing a checkbook has become a lost art.

The best way to teach your teenager is with a hands-on approach. By having them open a checking account where you bank, not only will they learn how to balance a checkbook, they will become more familiar with a debit card and the various fees banks charge. Make it a point to sit down with your teenager on a weekly basis to make sure they are balancing the checkbook correctly and that they do not have any questions.

Creating a Budget

People usually fall into two categories when it comes to creating a budget. Either it comes naturally while for others it is a major ordeal. By teaching your teenager to conserve their money, they will be better prepared when they have to deal with mortgage and automobile payments to go along with countless other bills.

The best way to teach them about creating a budget is to have them earn a weekly income or an allowance for doing certain chores around the house. No matter how much you give them, this money will help them when it comes to planning and following a budget. If your teenager habitually goes over his budget, teach them how to trim their expenses rather than giving them extra money.

Comparison Shopping

While we are all victims of impulse buying every so often, it is important for teenagers to learn about comparison shopping and understand the latest trend is not always worth the high price tag.

The most important thing you can instill upon them is that with a little bit of time and effort, you can save yourself a few dollars in the process.

Parents want the best for their children and hope to raise them to become successful and responsible adults. These few money managing tips will help set them on the right path to financial freedom.

Resources

http://www.mint.com

http://money.cnn.com/