Entering high school and looking to prepare our teens for a world outside our home can feel like a daunting and intimidating task. But with a little thought and preparation we are all equipped to handle the task. One of the really important things we are doing and plan to do in our house is helping our teens to make smart money choices.
Helping Teens Make Smart Money Choices
Money management and money sense can and should be started early with our kids. This can be as simple as helping them to save a certain amount of their allowance, money they have worked for or even money they are gifted.
While we don’t pay for chores in our house, our kids have had the opportunity to earn money through things like caring for a neighbor’s dog, mowing a neighbor’s lawn, babysitting, pet sitting, and now our teen has a job coaching at the gym where she herself does gymnastics.
Here are some of the ways you can help your teens make smart money choices:
Agree on a Set Divided Amount
Talk about money with your kids and the types of things they can do with their money. Talk about saving, investing, spending, etc. Agree on a certain amounts (maybe percentages) of money and what they will do with it. Our teen daughter has always had to set aside money for her cell phone bill. So when she was making $20 a week, 50% was set aside to pay that. Then 10% was but in savings, and the other 40% was hers to spend.
Open a Bank Account for Them
My teen and I went to the back together to open up accounts for her. We made the choice to make these accounts joint so that I could easily oversee and help her manage them. Having at least a savings account allows your teen to put away money, keep a ledger, and save for their future.
My teen has a checking account with a debit card where her paycheck is directly deposited. Then she has a savings account where she transfers the agreed upon savings amount from each paycheck.
The Wait On It Policy
When your teen wants to purchase something, have them wait on it. Maybe a few days, a week. It can be easy to want to run out and spend spend spend but we have found with our teen that if she sits on it a bit she realizes maybe she doesn’t want or need the item that badly or that maybe her money is better saved or spend elsewhere.
Keep Close Tabs
Keep open communication with your teen. Check on their accounts and talk about their choices. For instance our teen was spending money on fancy drinks or food while she was on the college campus. While each one didn’t add up to that much, when we pointed out that she had spent more than $80 in one month, she realized how large an impact that was making on that amount she had for both saving and spending on other things.