One of the most valuable lessons you can teach your teenager is financial responsibility. Some schools across the country have installed financial literacy programs in their curricula, but many have not. Below are nine ways to teach your teenager about money management at home.
1. Start with a game. Websites such as PracticalMoneySkills.com and Learn4Good.com have games that can teach your teenager how to manage money. On Learn4Good.com, games such as “Record Shop Tycoon” or “Burger Restaurant” will teach your teen how to run a business. On PracticalMoneySkills.com, the “Financial Football” game consists of Q&A’s where a correct answer will allow the player to move on the football field.
2. Start a monthly budget. If you allow your teen a monthly allowance, it will teach them how to budget and save when they want something expensive. However, you should be prepared to say no if they spend all of their money in the first week.
3. Pay your teen to save. You should start a savings account for your teen and teach them to put 10 percent of their allowance, paycheck and gift money they receive in the account. You should offer to match their savings amount as an incentive for them to choose to save. It will be good practice if you have your teens do the research themselves to find an account with the lowest fees and highest interest rates.
4. Give them a clothing allowance. Each season or school term, provide your teen with a clothing allowance. Place the budgeted amount on a prepaid debit card to give your teen the power to figure out how to spend their clothing allowance effectively.
5. Take them to thrift shops. Teach your teens to appreciate vintage clothing for both style and savings. Thrift stores can also be great for gifts, books and DVDs.
6. Give them budgeting projects. If you are planning a vacation, ask your teen to research a hotel, travel expenses and activities to do while you are there. You can give them a budget and let them map out the vacation.
7. Encourage them to get a job. Once your teen turns 16 (or the legal working age in your state) encourage them to get a part-time job. Before their first paycheck arrives, help them plan to save a part of their paycheck. You should also help them determine where the rest of the check will go, such as towards car insurance or a cell phone bill.
8. Talk about college financing. As your teen nears high school graduation, talk to them about the average cost of college and your plans and expectations for financing their education.
9. Teach them about identity theft. Warn your teen about the dangers of identity theft when it comes to things such as online shopping. Teach them the importance of safeguarding their Social Security number, name and bank account information.
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