Bringing up children can be both rewarding and frustrating at the same time. Naturally, as a parent, you want your child to evolve into a mature, well-mannered, financially independent young adult. Someone who will make you proud!
You’ve probably put a lot of thought into the kind of education your child is going to get and the activities they will take part in. But have you thought about their education when it comes to finances? If your child is a teenager, it’s even more important to help them get onto the path to financial independence as they might be just starting to manage money in a small way. However, many teenagers know barely anything about managing finances. So, as a parent, the sooner you start teaching them about money, the better.
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Teens might find it difficult to conceptualise the idea of saving up for a goal somewhere in the distant future. Moreover, convincing them that they should put a portion of their pocket money aside as savings might be a bit of a task. Nevertheless, it’s worth the effort as it could save them, in the future, from things like Credit Card debt and will help them understand the importance of building up a nest egg and an emergency fund.
Additional Reading: How To Build An Emergency Fund
If you don’t know where to start, here are a few tips that will help you identify the best way to introduce your teenager to money and help them get off to a good beginning.
Don’t be secretive about the family finances
As a parent, you may not want your teenage child to concern themselves with the house finances. They have a lot on their minds, as it is, with school and friends, after all. But if you think about it, if your child understands how much income is coming in and what the expenses are, they’ll be able to better understand what you can and cannot afford and why. They’ll be less likely to ask for expensive gadgets and toys if they know that you can’t afford them. Even if you can afford them and choose not to spend on them, it’s important to explain to your child that you are saving up for something bigger.
Open a bank account for your teenager
Having a bank account in their own name, will give your child a sense of independence. Moreover, they will learn the intricacies of managing a bank account, how to use an ATM/Debit Card and they will be able to track transactions on their account on their own. There’s nothing like doing it by yourself if you really want to learn how something works. With a bit of guidance from you, the parent, your teenager will have just the right amount of freedom when it comes to money matters and it will help them on their journey to financial independence.
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Encourage them to earn and save
A teenager is old enough to take on some degree off responsibility, so encourage them to take up small jobs and earn a little for themselves. If they’re comfortable with animals, they could try dog walking or pet sitting for the neighbours or even babysitting. They could even run errands in their free time and earn a bit through that. What’s important here, though, is to encourage them to save a part of what they’ve earned, rather than blow it all up on a new toy or snacks.
Additional Reading: 7 Tips For Teenagers To Make Money
Is that a need or a want?
Just like for adults, teenagers should be taught to differentiate between needs and wants. Writing them down can help your child prioritise and work towards saving for a particular goal. It will help them identify what’s more important – a new pair of shoes or a video game? And help them understand which one to work towards getting first.
Help your teen identify their goals
As a youngster, it’s not always easy to come up with specific goals for yourself. As a parent, you can help your child understand that instead of saying that their goal is to have fun or to have a good life, they should be a little more specific about what it is that will enable these broad goals. Going out for a movie with friends or saving up for a bicycle, for example, are more specific goals and easier to work towards.
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Now that you have some idea about how to help your teenager get started with managing their finances, how about taking a look at your own? Are you managing your debt well? You can find out by checking your Credit Score. On BankBazaar, you can do this in just a few minutes and the best part is that it’s absolutely free! Hit the button below to find out your score now.