Many young people are very irresponsible when it comes to financial matters because they were never taught skills that every adult needs in order to succeed in life. If you want to equip your teenagers with those necessary skills, then teach them those skills, even if you have to use tough love. Here are a few suggestions with a well-proven track record:
1 Get your teen a credit card
Get them a credit card (such as a department store or a low-limit VISA or MasterCard) for which they must be 100% responsible. Some people fear to let a teenager have a credit card, but this is an excellent way to start them on the road to financial responsibility. Later on, as they get older, they will be able to get them on their own.
Since this is an event you will not be able to prevent, why not help them to get one while you are still in a position to teach them how to best use them? Credit cards, when used responsibly, are an excellent way to establish credit. They are also a good way to monitor your teenager’s purchases.
2 Tie their allowance to their behavior, good or bad
When they do what they are told on a regular basis, steadily increase their allowance. Reduce or take away this privilege, though, when they continuously
misbehave. Start each teenager on a low allowance but, by all means, give them one. Keep in mind, though, that this is only one of many possible ways to reward (or punish) specific behaviors.
3 Let them pay for everything they want
Other than gifts and daily sustenance, let them pay for everything they want. There is no better way for young people to make a connection between what they get and the cost involved than by letting them feel the pain thereof directly. Too many parents and guardians spoil their wards by providing all kinds of goodies which have simply not been earned.
In life, no one gets anything for free. Why should your kids while they are under your roof? This is yet another reason why you need to give them an allowance (in addition to anything they may earn themselves), so they can start to establish independence.
4 Introduce them to generic brands rather than name brands
Most young people today want name brands but such items are often much more expensive than
generic brands, even though the quality is often the same. If teenagers want to use their own money to buy the more expensive jeans, shoes, sportswear, underwear, etc., let them, but do not give in if you are the one picking up the bill, even if it is a gift.
5 Help them develop a budget and stick to it
At one point or another, every person needs to learn how to set up and stick to budgets. People who do not work with pre-set budgets often overspend, usually after getting used to doing things without a good plan. Some people think that this is a skill that everyone can learn on their own but that is assuming too much, especially in the case of young folks.
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6 Open a bank account for them
And teach them how to monitor and maintain it. Many young people think that money comes from some mysterious magic well about which they do not have to worry. They figure that adults around them should be the ones worrying about such things.
All they have to worry about is getting things and enjoying them. By forcing them to track every penny coming in and out of their own account, though, you will (perhaps painfully) introduce them to that “magic well” they know so little about.
7 Help them get a part time job or get money on their own
You can give them a
job yourself, if you have a business, but make sure that this is separate from their allowance and that. If you become their boss, you treat them the same way you would treat any other employee. There is nothing like a job to teach a human being the value of a dollar, as well as the pride that comes with earning your own way in the world.
8 Help them start working on a career plan, regardless of their age
It is never too early to start thinking about what each person will do with his or her life. If your teenager wants to be an endocrinologist, for example, then she had better start concentrating on and excelling in science courses.
If she wants to be an engineer or a physicist, then she had better start doing better in math; etc. The higher they wish to go, then the better they have to do in school. You need to let your teenagers know these facts as early as possible in their academic endeavors.
9 Teach them how to set time aside for bill paying and for other necessary financial tasks
Young people often see Mom and Dad by their desks making out checks and balancing their check books but how often do adults take the time to teach young people why or how they go about these activities.
Do not expect teenagers to be thrilled to be lectured on these subjects but this is something they need to hear from you. To that end, see to it that they have one or two bills of their own, maybe for a magazine subscription, a book club, etc. Insist that they pay these bills on their own, at first with a little bit of help from you.
10 Teach them by setting a good example
Do you strive to pay your bills on time? Do you put bills in a safe and secure place when they come in or do you just carelessly chuck them aside, perhaps hoping that they will get lost? Young people watch closely what you do or fail to do and the habits you demonstrate are the ones they later imitate. Teach your teenager financial responsibility by first being
financially responsible yourself.
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As you become better organized and more efficient, share the knowledge you pick up as you go along. At first, teenagers will moan and complain in the hope that you will give in and let them instead go play video games. But, if you are persistent, they will learn.
In time, as they begin to see the importance of the task, they will start to do what is necessary, if only so they can hang on to their money. Your ultimate goal is not necessarily to get your kids to love financial tasks but, rather, to help them understand and appreciate the importance thereof.
