Do Your Teens Know Enough About Money?
We want good things for our kids; as parents we want them to do better than we did. That means we need to teach them how to manage their money. Young kids think money grows on trees, so they ask for things and don’t understand that you have to have money to buy them. I remember one mom telling me that her one child asked for a specific toy and when she said she did not have money to buy it, her child told her to go to the bank and ask for more. If it were only that simple.
Your teens need to know how to save and spend money before they go to college because while they are in college they will be bombarded with all sorts of tempting credit card offers. I remember many kids I went to college with getting two or three credit cards. This turned out to be a travesty for most of them because they became hopelessly in debt. You need to help your teen be aware of such temptations and help them cultivate resources to resist. Have them plan financial goals and then have share with their peers. By doing this, they are putting peer pressure to a good use. Encourage them to also post their goals on Facebook or a similar site. This peer pressure will encourage them to stick to their goals
Most teens have smartphones these days. I am sure you are tired of your teen being on there all the time without using it in a productive way. Why not help them choose an app that will help them follow a budget and track their spending habits? It should be an app that allows them to track their money and warn them if they are spending too much.
When kids are young they want to have fun and they do not realize that you can have fun without spending a lot of money. Teach them how to live modestly. Set a good example by not wasting money on parties or vacations you can’t afford. Show them how you can be happy living in a small home. Tell them how you survived living in a small one bedroom apartment when you were in college. Try to share how much fun that was. Encourage them to have fun without spending a ton of money.
Don't give your kids money for a car or vacation, let them know you'll help them. If they are saving for a car you could match what they are saving. This way they will understand the importance of saving up for big purchases. Matching their savings is a good way to encourage them how to save and the importance of saving.
Most kids in college don’t know what a credit score is, while at the same time they are in the process of establishing one. It's important that your teen know what a credit score is. Good credit scores mean savings in their future. It will lower their mortgage rate as well as other things like insurance. Tell the kids to pay bills on time and stay on top of credit scores by checking on a regular basis.
If you take the time to teach your teens these basics of finance they will be much better off in the future. They will be able to afford the things in their lives that mean something to them.