Teaching Teens About Money

Too many teenagers are not taught the importance of spending and saving. These are critical parts of forming a healthy attitude towards money as they grow into adults. Here are some tips for parents to help develop good spending habits for their teens:

Teach them the difference between a want and a need. Too many teens develop an entitlement mentality. They see certain friends wearing designer clothes or using expensive cell phones and quickly conclude that they need the same.

Teens should be encouraged to earn and spend some of their own money. Part-time jobs such as babysitting, cutting lawns, or stocking shelves will help teach teens the benefits of having a good work ethic. With hard work comes reward. How exciting it is to buy a new video game or new pair of jeans after saving up some of their hard earned money.

Don’t feel guilty about not giving them everything they want. Young people in general tend to have short memories. They may be upset for an hour or a day, but they’ll recover. As a parent, teach your teen that money must be used wisely. There are many expenses that the family has that are high priority, and having to say no does not mean that the parents don’t love their child.

Encourage your teen to be charitable. The concept of helping others and giving to the needy is an important part of citizenship. Your teen will feel great above themselves when, in lieu of a night at the movies, they decide to make a donation to a local food pantry. Money is very powerful. Sharing your resources with others is a wonderful way to build esteem and maturity.

Don’t impose all of your likes and dislikes on your child. Your taste in music is probably very different than your son or daughter’s, but that doesn't mean it's wrong for your teen to buy songs off I-Tunes or at the store. Let your teen develop their own likes and dislikes while encouraging them to budget for the things they want.

Understand that teens want to keep up with the newest technology. Be excited that there is a new generation of tech-savvy kids, but teach them that things like computers, I-Phones,laptops, computer games, etc. come with a cost.

Teach them what credit and borrowing means. If your teen wants a $100 cell phone, offer to lend him/her the money, with the condition that they will repay you a total of $105 (maybe $15 per month). Any missed payments will mean that no further loans will be made until payments are resumed. Too many teens don’t understand the obligations involved with borrowing money. “Buy now pay later” is a great marketing tool, but not so great when teaching kids how to manage money.