Why is it that so many parents read everything they can about how to raise “smart” teens, but don’t take an interest in practical parenting tips for raising financially responsible teenagers? While it is important that our children graduate high school with good grades, it’s arguably more important that we raise financially responsible teens. Why? If teens go off to college without a clue about managing money, then the chances of them living a life without financial worry is slim. Therefore, if you are one of the wise parents out there who want their teens to be financially responsible upon graduation read the practical parenting tips listed below.

Make Your Teen Earn Spending Money: One of the biggest financial mistakes parents make with their teenagers is buying them everything. It’s perfectly fine if you want to help your teenagers out financially, but do so in a way where they are earning their money. After all, this is how it is in the real world. Your boss doesn’t just give you money, right? No, you have to do the work first. Therefore, teach your teens this.

You can do this by having your teen do odd jobs around the house, or you can require that they go get a job for their “fun” money. When you make your teen earn his or her spending money, you will not only be teaching them about the “real world,” but you’ll also be teaching them the value of money as well.

Help Your Teen to Bargain Shop: Now that your teens are working for their spending money, they will begin to see how fast money can go. See, it’s no big deal when it’s mom and dad’s money because there’s always more where that came from. However, teens think differently when they had to spend 30 hours a week working for that money. So, this is the perfect opportunity to teach your teens how to look for bargains.

Obviously, most teens want the name brand clothing and high-tech gadgets that all their friends have, but they don’t have to pay as much for them. Hard-working teens will most likely jump on the chance to buy these things cheaper. Therefore, help them locate the best deals by teaching them about internet shopping, eBay and other online auction sites as well as taking them to outlet malls where name-brand clothing is often found cheaper.

Set Up a Checking/Savings Account: There are many more practical parenting tips for raising financially responsible teenagers than the two listed above. One of them is teaching teens how to manage their own checking and savings account. The only way to do this successfully is by actually setting up a checking/savings account for your teen. While it’s important to teach your teens how to write checks, it’s probably going to be more beneficial to teach your teens how to balance their account while using a debit card.

It’s also a good idea to talk to your teen about saving money. Discuss the benefits of saving money and how depositing just $25 a paycheck will help them build a good savings account for the future.

Practice What You Preach: You can’t teach your teen about financial responsibility if you aren’t being financially responsible yourself. Therefore, make sure that you are leading by example – and that your teen is able to see it. Talk to your teen about your finances and how you got where you are.

As parents, it’s our job to follow practical parenting tips that will help our kids become the best they can be. Therefore, try to incorporate the above tips into your parenting style. Your teens may not like it now, but they will be grateful later!

Almost everyone wants to contribute financially to their children’s or grandchildren’s education, according to The Hartford’s fifth annual college savings survey. However, only 64 percent of respondents are aware of tax-efficient ways to save. With many college saving options available, determining which ones are best for you and your family can be confusing.

529 education savings plans are a great option for tax-advantaged savings. A 529 plan allows you to make investments with earnings that are tax-exempt when they are applied toward eligible higher education expenses.

If you are in the process of developing a college savings plan for your children or grandchildren, it’s always a good idea to talk to your financial advisor. If you’re confused about college savings options, particularly about 529 education savings plans you are not alone. The Hartford survey found that 43 percent of parents and grandparents don’t fully understand this investment tool. Before you talk to your advisor, here are the answers to some frequently asked questions about 529 plans.

How much can you contribute to a 529 education savings plan?

Many states allow the account owner to take a state income tax deduction for contributions made to their plan each year. The amount of the deduction varies by state, and if you roll the funds to another 529 plan not sponsored by that state, your deduction may be subject to recapture.

Under federal gift tax rules, you can contribute up to $13,000 per year for each beneficiary of a 529 account without gift tax consequences. You can also make a tax-exempt contribution of $65,000, or $130,000 for married couples, per beneficiary, once every five years. If you treat the gift as being made over five years, and die before the end of the five year period, the portion of the gift allocatable to the period after your death will be included in your estate. Any additional gifts given by you to the same Designated Beneficiary in the five year period will be subject to federal gift tax. You should consult with your tax advisor for more information.

The account owner has complete control over how contributions are invested and when withdrawals are made.

Who can contribute?

Most plans allow anyone, including friends and relatives to contribute. A 529 contribution is a great way to give the gift of education to a friend or relative who is planning on attending college.

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There are so many different aspects involved in teaching teens how to make smart financial decisions, and one of the most important aspects is teaching teens money management. We all know parents who have dedicated their lives to giving their children anything and everything they want. While it is normal for us to want to provide for our children, we shouldn’t just give them everything. If you do, they will not learn the value of money and will make poor financial decisions when they leave your home.

Teaching teens money management isn’t extremely difficult, but it will involve a little willpower on your part as a parent. While it may be hard at first, it will get easier so don’t give up. Just remember that in the long run, you’ll be helping your teen substantially. Below are a few tips to help you teach your teens the value of money.

Allowance: If you choose to give your teen an allowance, it shouldn’t be just given. You should base your teen’s allowance on the chores he or she does around the house each week. What this does is teach your teen that money isn’t just given, but earned.

Encourage Your Teen to Get a Job: One of the best ways for teens to really learn the value of money is by getting an actual job. Once your teen has a part-time job, then drop the allowance. Your teen needs to understand the correlation between hours worked and money made. This is something that will help him in the long run.

Don’t Pay for Everything: It is reasonable for parents to take their teens shopping for clothes at the beginning of the school year. However, you need to set a budget for what you’re going to spend on your teen and don’t go over it. Then, once the initial school shopping is done, it’s wise for you to make your teen pay for extra articles of clothing she wants throughout the year. This will teach her to prioritize her wants, save money accordingly and pay attention to how much things cost. This principle can be applied to more than just clothing by the way. For example, your teen is capable of saving money to go to the movies, out to eat with a friend, buy makeup and much more.

Attach Responsibility to the Car: Many parents buy their children a car when they turn 16 and don’t require them to pay a dime for, not only the car, but the insurance and gas money as well. There are a couple things you can do when it comes time to purchase a car for your teen. One of the cool things many parents are doing is bargaining with their teens starting when they’re 13 or so. They tell them they’ll match whatever money they have saved up for a car to help them buy a car when they are able to drive. What this does is teaches your teens that the type of car they get depends on how hard they save their money. Other parents buy the car, but require their teens to pay for the insurance and gas. Whatever you do, make sure your teens have some responsibility involving their car.

If you’re looking for great information on ways to fully understand your teen, you can get it right now…any time of the day, any day of the week. Real Life Guidance to Understanding Your Teen is available for easy and instant download to your computer.

I know the title sounds bad, but before you stop reading think about how prominent credit cards are in our society today. Not only are they prominent, but they are easily attainable for college students to get. There are a couple of facts you need to mull over real quick.

• One Third of High School Seniors Have a Credit Card. Okay, so they have their parents’ credit card, right? In some cases, but in about half of these cases the cards are in the student’s name.
• Most College Students Have Credit Cards. Nellie Mae, a student loan maker reported that close to 80% of college students have and use credit cards. In addition to this, the average credit card balance carried by these students is over $3,000.
• Bankruptcy has Went Up in Young Adults. Recent studies have shown that the number of young adults aged 25 and younger filing for bankruptcy is now higher than 5%.

Those are pretty startling statistics and they all revolve around credit cards. Therefore, if you want your teens to make financially smart decisions when they go off to college you need to teach them about credit cards and how they should use them. If you don’t, your teen may contribute to the rising bankruptcy filings in young adults. So, how are you supposed to teach your teens about credit cards?

1. Talk about Credit Cards. The first thing you need to do is talk to your teens about credit cards and the long-term consequences they can have if used poorly. When you talk to your teen about credit cards, don’t just talk about the bad stuff, but also include some of the good things credit cards have to offer. For example, they will help your FICO score rise when used appropriately and they can also be good to have in case an emergency happens unexpectedly.
2. Show Teens How You Use Them. If you own a credit card, then don’t be afraid to show your teens how you handle them. One of the best ways to use a credit card is to use it like a check. What I mean by that is once you swipe the credit card, immediately subtract it from your checkbook. This will ensure that you have the money in your account to pay the bill at the end of the month. If you are having a difficult time managing your credit cards then talk to your teens about that so they can see first-hand how credit card usage can get out-of-control. This is also the perfect time to change the way you use them so your teens can see the correct way to use them.
3. Start with a Debit Card. Debit cards are practically like credit cards in regards to how they work. You take it out, swipe it and take your items home. How they differ is in the fact that they don’t allow the user to carry a balance and charge interest against it. They also take the money out of your teen’s account immediately. So, these are like credit cards with training wheels. Your teen will learn how they work, but will have to immediately take the swiped balance out of his checking account so he doesn’t get overdrawn.
4. Prepaid Credit Cards. Many teens are happy with debit cards and don’t push the credit card issue, but if your teen insists on a credit card before going to college, suggest using a prepaid credit card.

More help is available here to help you teach your teen how to be financially smart.