Teaching Teens About Money

Setting a good example is crucial to teaching your teen’s good money management.

But, if your finances are out of order, how are you to expect that your teens will have theirs in order?  However, If this is you; you can absolutely learn together.  And it is never too late or early to learn. And teaching teens about money is very important. 

However, it is important to start as early as you can, to teach your children about money management.  

A young child can learn how to earn a dollar by doing their chores or even their daily activities without complaining.  And there are mixed opinions on weather a fixed allowance or an earned amount is in order. However, the age of the child will dictate what is appropriate in most circumstances. Meanwhile, this money needs money management. 

Because What is taught early and often will stick with a child into their older years.

My 4 year old granddaughter has a star chart where she can work daily to get all of her stars and at the end of the week she receives the prize that she has picked as a goal. Most importantly, the goal helps her to be focused on the little things that she is required to do throughout the day to earn her prize. However, they are really no more than trinkets but she is thrilled to earn them.

“Teaching teens about money” is the third article in the series about preparing to your teen for college. 

Firstly, is a post titled “Should you pay for your child’s college”. And secondly, the post is titled “Preparing your teen for college”. Each article touches the other but is also a standalone post.  Above all, I hope you will read them.

5 Areas of Focus For Teaching Teens About Money:

1.   Teach them how to follow a simple budget.

2.   Create a plan with them on how to earn their money.

3.   Open a bank account and show them how to use it.

4.   Model how to track expenses and how to spend wisely.

5.   Teach them to give at an early age.

 

If you need to brush-up on your budgeting 101, read this article by Ramseysolutions on how to do a zero-based budget. And I have included in this post a printable break down on how to implement the budget. Press the pin below and while you are at it, Pin the picture to your Pinterest Boards. <—

Most importantly, getting a job will teach teens firsthand about money and taxes.

And it will also give them opportunity to learn budgeting and how to track their money.

They will have to plan for transportation and gas to get there, or plan to take the bus or carpool.  But, no matter which option, each involves money for transportation. Because this is a great place to start, teach them how to track their expenses and how to plan wisely.

If you fail to plan, you plan to fail.

Open their first bank account – It is important to their learning process that the account is in their name. However, you can be on the account as a signer, but not on the actual account. Identity theft is unfortunately too common and you would be wise to keep your finances separate. 

And there are also credit concerns to think about. 

Being a co-owner of the account would also tempt you to add money to the account for them.  Because if you are constantly bailing them out, you are not teaching them about money management. Teach them how to balance their account, keep track of spending and learn how to save.

“Teach them about having long-term savings goals. At this age, all they can probably talk about is getting a car. If they want one, they can pay for it. Work with them on creating a plan for their money: what they need to buy a car and what they need to save. Early exposure to goal setting helps to give them patience and vision, two things they’ll need in life.” – Dave Ramsey

A simple budget sheet will show your teen what they spend their money on.  We know oh too well how money can slip through someone’s fingers.

Here are a few things most teens spend their money on.

They may have to pay for their own smart-phone and apps are an added expense above the cost of the phone.

Starbucks coffee and McDonalds French fries

Going to the mall, and buying makeup.

Subsequently, school dances and dating can cost a small fortune if they want to go “all-out”.  The cost of a quick fast food meal, a couple of movie tickets and popcorn, snacks, and beverages is an arm and a leg these days. Really! Let’s not even mention concert tickets.

Every teen boy dreams of cars and car stuff. And this can be expensive too.

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Although, my boys were into video games and had to have the newest consoles. Since I was fitting the bill, they may have acquired consoles but they certainly were not new. Because the local thrift store had both machine and games too.

 

Perhaps your girls may be into online spending. 

 

   Because, there are so many cute things out there that ONLY COST …

No one can teach teens about money management better than Dave Ramsey.

And he has designed a course just for teens. It is a self-paced course with modules and is recommended for middle school and high school students.  And I think I will invest in this course for myself. I believe it is listed at $49 currently. But that can change any time.

Here is an opportunity I believe I will take.

Dave Ramsey has bundled a few of his greatest courses and named it, the “Foundation Self Study Bundle”, where you and you’re teen can earn a “debt free degree”. And, he has also written a book called 7 baby steps. You can find both at Ramseysolutions.com. However, I am not an affiliate but would be if he offered that connection.

 

I have designed a workbook to help you understand and implement the zero-based budget.

We know we can’t teach something we are not fully aware of.  Please make as many copies as you need for your family.

Please add any comments that you have below and feel free to give us all some tips about teaching teens about money.