Sometimes getting your son or daughter to do their chores, let alone saving their allowance or paycheck, can be a difficult task. Below are few tips on how to talk to your teen about money and how to establish good savings habits that will last a lifetime.
- Start early – Take them shopping, discuss how much things cost and help them understand the difference between a “Need ” and a “Want”, generic vs. brand name and buying in season. Then, help them create a budget to put these expenses into perspective.
- Work for It – Encourage them at an early age to get a job and earn their money – whether it’s babysitting the twins next door, life guarding at the local pool or bagging groceries at the grocery store. Your child will appreciate that new tablet or designer handbag more when they have worked hard to attain it.
- Set Goals – From an early age have them set realistic savings goals to acquire their wants – a new baseball glove, smart phone, concert tickets… Then, based on their income they can calculate how long it will take them to save for the expense.
- 50/50 – Got cash? Encourage saving half for a future expense (car, college, prom) and the other half they can spend on summer fun.
- Check it Out – Once they turn 16 encourage them to open a Student Checking Account to help them learn the basics of managing their money. If they have a job, they can even arrange for direct deposit of their paycheck.
Benjamin Franklin once said, “A penny saved, is a penny earned,” taking a few minutes now to introduce your teen to smart savings habits will help put them on the road to financial freedom.
Do you have any tips on how to help teens to manage their money wisely?