Practical Ways to Teach Teenagers to Manage Money

Without the aid of a computer-driven device, can your teenager make the correct change when accepting payment for goods? Can they stay within or create a workable budget, or save money? Judging by the number of adults who have no skill in these areas, the answer is probably not.

Money managing skills begin at home. Let me restate that. Money managing skills begin at home and the earlier the better. Both the task and responsibility fall directly onto the shoulders of parents to have a plan in place to educate and guide their children in the skill and art of managing money.

What are some practical ways to teach teenagers to manage money

Teaching teenagers how to manage money is an important step in preparing them for financial independence and stability as adults.

Lead by example: This is a no-brainer. Demonstrate good money management habits yourself, such as budgeting, saving, and avoiding unnecessary debt. You can teach what you don’t understand yourself, so put some effort into learning the basics, at least.

Start with a budget: Teach your teenager how to create a budget and stick to it. This can include setting financial goals and tracking their spending. Have set times to review how the budget is working and be adaptable, tweaking the budget when necessary.

Encourage saving: Teach your teenager the importance of saving and help them set up a savings account. Encourage them to put a portion of their income into savings regularly. Teach them to set reasonable goals in this area. Offer incentives when those goals are achieved. For example, You may add 10% to the amount saved in the last 6 months. If your child added $100 to their savings account in the last 6 months, you increase it by 10% or $10.00.

Teach about credit and debt: Explain the dangers of credit card debt and the importance of paying bills on time. Help your teenager understand the difference between needs and wants and encourage them to prioritize their spending. Teach them the long-term consequences of bad credit and how it will affect their purchasing power in the future.

Discuss the value of work: Teach your child that work and money are tools that if handled well, will lead to better life options. Encourage your teenager to work part-time or participate in paid internships or volunteer opportunities. This can help them understand the value of money and the importance of earning it. You may make rules about specific items your child wants to obtain. Make those items only attainable with money they’ve earned themselves. This teaches them to be patient and persistent when planning for expenditures.

Provide financial resources: Show them examples and how to find resources. Make financial educational materials available to your teenager, such as books, online resources, and classes.

Talk openly and regularly: Arrange some brainstorming sessions with your child. Encourage open and ongoing conversations about money and finances. Ask about their financial questions and concerns and offer guidance and support as needed.

By teaching teenagers these skills, you can help them develop a strong foundation for financial success and independence. Not to mention the peace of mind you as a parent will achieve when they become proficient money managers.