When I was a teenager, like most I spent every cent I had. I probably did not learn about money and the importance of saving until I left home and had numerous responsibilities of my own. Teaching your kids about money is an important factor to instil if you want them to be grown-ups who are money savvy. You may think your teenagers won’t listen to you but there are some ways you can help teach them to become financially independent and money conscious.
Talk about money
I think this is one of the biggest mistakes people make-they don’t talk about money with their kids. Many people think that money is an awkward subject, but by being open and honest your kids will be able to see the realities of having or not having money.
Part of this is leading by example. Despite what you think, kids take notice of everything that goes on around them. The way you run your household, spend your money, bank accounts you use- the list goes on and all set examples for your children. If you are an impulse buyer or carefree with your money you are teaching your kids that it is ok to be like that too.
Help your kids construct a plan
Using a budget may put some teenagers off but if you use a different phrase such as a spending plan their interest might peak a bit more. Help them construct a simple outline of monthly earnings and expenses. They can list big ticketed items they might want and you can help them find ways to achieve that.
At this point you need to really be distinguishing between needs and wants-something they might not have fully grasped yet. Also if you don’t have a budget for your household start one, again it is about being an example.
Scale back your funding
Most kids earn an allowance. You need to set strict guidelines on what they need to do to get this which will teach them about the values of hard work. Start giving them more responsibilities that they need to pay for such as phone bills and friends’ birthday presents.
If they want some expensive item like a new iPhone, do not buy it but help them work towards buying it themselves. You may here have options they can utilise like matching dollars, which gives them an incentive to reach the goal.
Let them get a job
When I was at school I heard a lot of people tell me their parents did not want them to work so they could focus on study. Having a job or not is not going to change how much effort they put in at school. If anything it will teach them about working life and give them an income that they can use to save. It also will help them gain employment after school as most employers are wary of taking on someone with no experience. Even if it is holiday work that can always be useful.
Set up an account
Setting up an account for your teenagers under their name starts to give them more responsibility. It also allows you to explore different account options and educate them on how to use them. You can start introducing concepts of interest, fees, charges and other options make them more financially aware.
Set up a mock investment
This can be a great way to start teaching teenagers about investments and the share market. I have no clue how it all works but I wish I had some knowledge about it earlier on. This could be as simple as reading the newspapers for certain stocks to using online software and sites which allow you to invest in a mock stock exchange.