I was absolutely terrible with our finances when I was in my teens and 20s. In fact, most of my Friday paychecks were blown at the Mall of America leaving me with little to nothing come Saturday. What I know for sure as a part is that I do not want the same for my kids. If I am able to prevent them from any financial slip-ups then I have done my job. With my younger two, it has been easy and I hope they get a firm grasp on money by adulthood. For our teenager however, it has been more of a hustle. Trying to instill in her as much as I can before she flies the coop. If you find yourself in that same boat, I’ve got great tips for setting your teen up for financial success.
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The teen years are tough, there’s no doubt. But, when it comes to guiding your teen through managing their finances, it’s important to remember that you are still in charge. Take full advantage of these last few years while you still have a say. Don’t take advantage of them, take advantage of the time you have left to set them on the right financial track.
Sometimes you might have to get tough and put your foot down. You’ll have to push them to save more or encourage them to postpone a major purchase. It won’t always be easy.
This also means that you’ll have to be patient while they learn and lend a helping hand if they need it. If they work less to study for finals, be willing to help them still get by. They need your compassion and understanding too so they don’t put all the weight on their own shoulders.
Just like you have a say for the next few years, you need to let your teen know that they have a major say in what happens to their money as well.
Nothing makes a teen more frustrated than a parent on a power trip. That’s not what this is about and they should know that.
Sit down with them, listen to what they have to say and be willing to compromise. After all, this is something you want them to continue into adulthood, not tolerate until they are out of the house.
Take the time to sit down with your teen and work out a financial plan together. Let them know the few things that you expect (savings, giving, budgeting) and then work out the solutions together.
What are the major goals for their lives? For us, our daughter wants to travel the world. So, we made sure to set up a travel savings fund for her! Because she won’t be traveling until after she graduates, we chose a premier money market account so her funds will gain more interest. Plus it only requires a $100 minimum to open.
No matter what their life goals, help them set up a financial plan to help them achieve those goals.
Every person, especially teens, should be practicing saving their money. We all know that life throws us curveballs, make sure they have a cushion to fall back on.
A great option for teens is either a traditional checking account through your bank or a high yield account that allows them to gain interest but still make multiple withdrawals and deposits.
Depending on their individual dreams and life goals, they may benefit from multiple savings accounts for both short term and long term savings.
The best way to help a teen manage money is to just sit back and let them do it!
This method may vary from household to household. Some people choose to give their teens cash, while others will allow them to open their own checking account.
If you aren’t sure how to get started, or if your teen should even have a checking account, here is a helpful guide to answer all your questions.
Once you have talked through the different types of accounts you’ll want to open and what each of them offers, it’s important to sit down and create a solid budget that everyone can agree on.
My Fun Sized Budget Bundle is perfect for a teen just starting out. It offers an easy to follow budget plus methods for saving and shopping smart.
Some things to consider for a budget:
Asking your teen to pay their own bills is not asking them to start paying rent as soon as they get their own job. They are most likely only working part time after all and are still kids. So what bills might be good for them to start paying?
Find a few bills to start with that they are fully responsible for. This will help give them ownership and teach them what it’s going to be like in the real world.