Parenting My Teen

One of the hardest things for parents to do is share the family’s finances with their teenagers. In fact, a lot of parents don’t even talk to their kids about money. While these parents don’t necessarily think their children will learn how to manage money on their own, they don’t feel that their kids need to know how much money is coming into the household every month. They also don’t feel that they need to “burden” their children with how much money is going out every month either.

While you may agree that teens don’t need to know what the family finances are the truth is that this information will help your teens make financially smart decisions in the future. Of course, you can’t just say, “We bring in $4000 a month and spend $3000 a month in bills,” and expect teens to know how to manage money. Instead, you need to let your teens in on how the finances are done within the home.

One of the best ways to do this is to hold a “financial meeting” twice a month…or however often you balance your checkbook and pay bills. It’s important for your teenagers to see how you budget your finances and be involved in this process. When they see how much money you have coming into the household every month versus how much you spend paying bills, they will begin to gain a better understanding of the value of money. Before your teens can make financially smart decisions, they first must understand the value of money. They need to understand how much things cost, how much you bring in and how much goes out. This will help your teens prioritize which items are necessities and which items they can do without.

While many parents feel that this is placing an unnecessary burden on their teens, the truth is that your teens will learn a lot from this. Think of it like this, dealing with finances is something your teens are eventually going to have to do on their own, therefore, it’s not an “unnecessary burden.” Instead, it’s a necessary burden that they need to learn how to handle. What better time to learn then while they are still under your protective supervision?

There are several important things that this process will teach your teens. First, it will teach them the value of money and how to effectively budget it so that they are able to pay for all their monthly necessities. Your teens will learn a lot from seeing you making the decisions of how much money to allocate where…especially when you take the time to explain why you do it that way.

Secondly, they will learn how to prioritize things. For many teens, money is easy to come by. This is because many parents just give it to them. Therefore, by getting your teens involved in the family finances you will be opening their eyes to the real world. They will begin to think about what they spend their money on and whether or not it’s really worth the amount they’re going to pay for it.

Finally, you’re teaching teens how to handle their own finances when they leave home. Many teens go to college and apply for numerous credit cards and get themselves, and their credit scores, into major trouble…all before they turn 20. However, when parents talk to their teens about money and show them how it works before they leave home, they’re less likely to get themselves into financial trouble later in life.

More budgeting and money management tips can be found here!

It’s a well-known fact that one of the biggest challenges that all adults face is how to properly manage money. Unfortunately, money management isn’t something that’s taught in to kids while they’re still in school. Instead, it’s something that many people learn the hard way, or by trial and error. One of the biggest problems that can arise from learning money management skills through trial and error is that your credit score suffers when you make a mistake.

Of course, as parents we don’t want to see our kids suffer harsh consequences of any kind, but especially consequences that arise from poor money management. Therefore, we need to teach them how to manage their money before they leave the house. The earlier you start, the better, but the teenage years are the most important years to teach this. While there are many ways to go about teaching teens about money, one of the best ways is to share with them the mistakes you’ve made along the way.

All children, but especially teens, enjoy hearing about the mistakes that their parents have made throughout their lives. It’s not because they want to laugh at their parents, but because they like to hear, from their parents, that they’ve made mistakes too. When you share some of the mistakes you’ve made regarding money with your kids, they will feel like you can relate to them and how they feel about things. This is why you shouldn’t be afraid to share your financial past with your teens.

When you begin telling your teens about your financial mistakes, you need to be sure to talk to them about the principles you’ve learned from your mistakes. For example, tell your children about the time in college you decided to leave the dorms and rent a house and how you failed to manage your money so your electricity got turned off. Of course, the important principle you learned here was the importance of budgeting your money accordingly. Therefore, you can share this story with your teen and explain to them how from that day forward you began to budget your money starting with your bills and other mandatory expenses first.

You may not realize it now, but all of the talking you do with your teens while they’re still living at home does have an impact on them and their future. Even though your children will have to learn some things the hard way when it comes to money, they will more than likely remember the important lessons you taught them. Many of those “important lessons” will come from your financial mistakes. You will be surprised at the smart financial decisions your teens make when they leave the house because of the principles you taught them through your past financial mistakes.

For more information on helping your teens be financially smart, click here!

One of the most important things parents can do for their teens that will help them make financially smart decisions is teach them how to budget their money. Many parents make the mistake of just giving their teens whatever it is they want. It doesn’t matter if it’s money to go to the movies, buying clothes or even purchasing a car. However, we all know that this isn’t how it works in real life. All that money that is being given out is earned, by you, and must be accounted for somehow. Therefore, teenagers need to be taught how to budget their money if you want them to succeed financially in the future. Below you will find step-by-step instructions for how to teach your teen to budget his or her money.

Calculate Income: The first thing you need to do with your teen is take the time to figure in how much money he brings in on a weekly, bi-weekly or monthly basis. It doesn’t matter if you give your teen an allowance or he works a part-time job, he needs to figure in all the income.

List Expenses: The second thing that you can help your teen with is listing out all of her monthly expenses. The only expenses that need to be written down are those that you require your teen to pay for. For example, if she is responsible for her cell phone bill, car payment, gas and makeup – then those are the expenses that need to be figured into the equation.

Prioritize Expenses: Thirdly, it’s important that your teen understands the importance of prioritizing the expenses. What expenses are not negotiable? This is something that your teen will have to decide. In the example above, the most obvious necessity is a car because the car is what will get your teen to work to pay for her gas, cell phone and makeup.

Start a Ledger: Once you have the different expenses that your teen requires, it’s time to help him start his own ledger. This can be done either online or with an “old fashioned” ledger book. You need to show your teen how to create different pages for each expense. For example, most teens will need the following pages: Car payment, Insurance, Gas, Cell Phone, Entertainment, Out to Eat and Miscellaneous. Of course, this will vary from teen to teen. While your teen may not see the importance of separating Entertainment, Out to Eat and Miscellaneous – it’s important that they do. This is because it will make your teen much more aware of how much money they spend on food, going to the movies, clothes, etc… Part of budgeting is becoming aware of exactly where your money goes each month.

Keep the Ledger Balanced: Finally, you need to stress the importance of keeping the ledger balanced with the bank. After all, this is the reason for creating a budget – learning proper money management so that your teen always has enough money for necessities and doesn’t get overdrawn. For the first month or two, you will want to help your teen remember to record each and every time he spends money in his ledger. Then, at the end of the month it’s a good idea to sit down with your teen and review his progress. Help him make sure his records match the bank’s records and that he’s balanced. This is not something you should have to do every month, but to make sure your teen understands it, it’s good to do it for the first two or three months.

Protect your child from graduating “book smart but money dumb” – help them avoid debt, financial stress and paycheck-to-paycheck living. Give your child the gift of MoneySmarts – for a lifetime of financial Intelligence, Independence, Security and Success!

Allowing your teen to get a part-time job in high school is a tough decision. For some parents, it is a financial necessity. For others, it is a sacrifice that takes the teen out of the house much too often. For most, however, it is more a question of whether or not the teen will get any value from the job or if working early in life takes away from the enjoyment of youth.

The decision you make should be partly dependent on what your teen wants and needs, but that should not be the only concern. Before you let your teen work, there are certain things you should consider:

How good are your teen’s grades? Is he or she responsible with homework? Can your teen manage his or her schedule well enough to add work and still get everything done that is required? Can he or she find work that will be flexible with the school schedule or extracurricular activities in which your teen participates?

Responsibility
Has your teen demonstrated responsibility by following house rules? A job requires your teen to be responsible for adhering to a schedule, using teamwork, and showing up even when he or she would rather be with friends. Does your teen have the self-discipline to work? Is your teen capable of getting himself or herself out of bed in the morning without you having to help? If their work schedule is simply something else you will be responsible for keeping track of, you may want to reconsider. Before allowing your teen to work, you should talk to them about all the things they may encounter. Your teen needs to have good  hygiene and maintain a professional appearance (it is even ok to make your teen responsible for doing his or her own laundry to keep a uniform clean).

Your teen should be able to handle criticism well and tolerate constructive criticism. Does your teen get along well with others?  Most employment for teens is in retail, requiring them to work with
other teens and adults as well as provide customer service.

Purpose
Why does your teen want a paycheck? Does he or she have specific goals in mind? Can you help them develop a plan so that they can save some of the money they earn? While allowing your teen to work while in school can be a difficult and personal choice, and the job may affect your entire family because the schedule will throw off things like family dinner times, working can help your teen develop a sense of responsibility and maturity.

Your teen’s job can also teach him or her valuable skills that will be useful later in life. It can also help your teen’s self-esteem and give him or her a sense of control over his or her own life.  Having a job and maintaining a good grade point average can provide your teen with a competitive edge when applying to college as well.

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The majority of parents want to raise their children in a way that will prepare them for life in the real world. As all adults know, money is the foundation of living a comfortable life. Then, why is it that parents who want to raise kids to be responsible adults don’t think about the importance of teaching them about money? Kids go to school and learn about history, math, science and a host of other things, but they don’t go through a financial class that prepares them for managing money. No, this is left for parents to do. So, how does one raise a financially responsible teenager?

The first step is to talk to your teen about money. Don’t be afraid to share details with them about your finances. All kids, and especially teenagers, need to understand how money works and the importance of managing it correctly. Parents can start talking to their kids about money before they become teenagers, but it is something that is an absolute must for those who want to raise financially responsible teenagers.

The best way for teenagers to learn the value of money is to learn by trial and error. This is why encouraging teens to get a part-time job is a great idea. By working a part-time job, even if it only is in the summer, teenagers will learn to appreciate the connection between work and money. Now, to help teens learn to manage their money wisely, parents need to start requiring their teens to pay for some of their own things.

Nothing will be accomplished if your teenager is working part-time, but is able to spend his money on whatever he wants because you are providing him with all his necessities such as a cell phone, car, gas, clothing, etc. Now, that doesn’t mean everything has to be turned over to your teen. For example, if you prefer to pay for your teen’s car payment and insurance then you could considering making him pay for the gas money. Also, it’s a great idea to set a budget of how much you are willing to spend on your teen’s clothing each year and don’t go over it. When the limit is reached, your teen will have to start buying clothing with his money.

By taking simple steps like those listed above, you will be showing your teen how to manage money through real life lessons. It’s possible that your teen will make mistakes. For instance, he buys some clothes he really wants and then realizes he doesn’t have enough money for gas to go out on the weekend. Well, then the solution is he doesn’t go out. Yes, it will be hard to not hand over some extra cash to your teen so he can have a nice weekend, but by refusing to do so you are showing him the importance of managing money. It is better that your teenager learns these lessons while he’s still under your protective care than when he’s off to college and gets evicted from his apartment due to lack of money management skills.

Raising financially responsible teenagers is not a simple thing to do, but it is possible. And, when parents take the time to teach their kids about money and how to manage it properly, they are teaching them important lessons that will follow them for their entire life. When you successfully raise a financially responsible teenager, you will be able to rest much easier when he leaves for college and enters the real world. And, that’s the ultimate goal!

Protect your child from graduating “book smart but money dumb” – help them avoid debt, financial stress and paycheck-to-paycheck living. Give your child the gift of MoneySmarts – for a lifetime of financial Intelligence, Independence, Security and Success!