I remember the thrill of being a teenager and having my first job. I loved being able to spend money on clothes, food and whatever else my heart desired. Unfortunately my heart desired lots of things and I never saved any money! This is something that I have always struggled with. Now that I have 2 teen daughters, I’m hoping to impart some saving and budgeting wisdom to them so they don’t have this same struggle as they get older.
Budgeting is something everyone should learn when they reach an age where they can understand the concept of money. It is very easy to spend more money than planned if there is no budget in place. By teaching your teen the concepts of budgeting, you will help them to learn how to avoid overspending and how to make their money stretch. Both of these are valuable lessons that will come in handy during adulthood.
The first lesson in budgeting is to teach your teen how to document both income and expenses. If you have a household budget, share it with your kids. Be specific about where your money goes. Not only will this help them understand all that they need to think about and plan for as they get older, but it will also help them to realize that money is finite…not infinite as they so often seem to think. Also, make sure that they understand that necessary expenses such as mortgages or rent, food, utilities and car insurance get priority over the newest gadget on the market. Once the necessary expenses have been taken care of, a stipend of the balance can be put into a savings account for a rainy day and then the wants can be addressed. Better yet, teach them to save before spending. If your teenager is looking for ways to make money, make sure to check out these Creative Jobs for Teens.
My oldest daughter is using the 52 Week Savings Challenge. She uses the printable to check off her contributions each week. If that’s a little too ambitious for your teen, consider the 365 Day Saving Challenge! Both of these are printables and are a fun way to track progress.
If you fall into the category of living paycheck to paycheck, like many Americans do, this is a good time to teach your teen how to make your money stretch. Tips such as using coupons to cut the costs of food and clothing, or buying second-hand items, go a long way in establishing healthy spending habits in your teens. These habits will carry over into adulthood if taught properly.
Teaching your teens about credit is also extremely important. Credit is valuable and most people do not realize how valuable it truly is until it is tarnished. Avoid credit cards as they tend to have very high interest rates, even if the minimum payment is low. Be sure to teach your teen that it takes years to build up good credit and only a few months to destroy it completely. Without credit it can be hard to rent an apartment, buy a car or a house. Teach your teen two valuable credit lessons: use credit only when necessary and do not extend yourself beyond what you can afford to pay. These two lessons in themselves will create a good credit history for your teenager leading the way into adulthood.
Teaching your teen how to budget and manage money properly does not have to be a nail-biting experience. If you find that your own budgeting technique could use a bit of work, why not share that experience with your teen? It is beneficial for your teen to learn from your struggles before they experience their own. Most of all, budgeting and being responsible with money is a life lesson that typically gets carried through to adulthood and your teen needs all the help they can get.