Teaching Teens Financial Responsibility
Most teenagers are oblivious to what it costs to live. Groceries and utilities cost enough alone and that’s not including rent/mortgage, car payments or insurance. The average family’s bills extend even beyond that. Teenagers are so quick to assume that it’s all just magically taken care of and that they can empty out Mom or Dad’s wallet every weekend. Unfortunately it’s not all magically taken care of. The question is how do you get your teenager to be financially responsible? High school leaves our young teenagers just around the corner from what life really is. They need to be prepared for it.
First and foremost just don’t hand out a weekly allowance every Saturday night. They need to have weekly chores such as doing the dishes, taking out the trash, taking care of the animals and cleaning the bathroom to earn this allowance. If they don’t do their chores it needs to be deducted from their allowance. That gives them an idea of how it is in the real world. If you miss work you don’t get paid.
Most teenagers’ only wish is for a car. If you want to teach your teenager responsibility think twice before buying it and giving it to them as a gift. Let them help out. If you are going to purchase the car, let them pay for insurance. Make sure they are the ones that are responsible for paying for the gas and simple maintenance such as oil changes.
The next question is how are kids going to pay these luxuries? Well they can do what most of us did. Get a part time job during the summer and on weekends. Plenty of places look for high school students during the summertime. There are plenty of jobs that give teenagers opportunity and education. Lifeguards teach CPR and other first aid tactics, retail gives them an opportunity to work with money. Sure they’ll be spending a portion of their summer working but I’m sure we’d all like to skip work and head off to the beach.
Working part time also gives them the opportunity to open bank accounts. A checking account will teach them how to manage their funds and a savings account will give them someplace to save unused money and gain interest.
If a teenager doesn’t learn financial responsibility before hitting the real world they are going to be faced with a challenge that will be almost unbeatable. The experience and knowledge of what its like to be financially responsible will prepare them for life. Entice your kids with the benefits of a part time job. Show them how a savings account will earn interest and get them even more money. Remind them that after they have paid the things that need to paid there will be plenty of extra money to spend how they want.
Another tactic that is very helpful to some teens is a prepaid credit card or cell phone. If it’s prepaid it doesn’t have unlimited use and there isn’t interest. If there is only a certain amount on a credit card each month they will have to learn how to manage their finances to make it through the entire month. Give it to them with a set amount of money each month and don’t fill it up, even if it’s spent in one week. Within a month or two they should have it figured out.
Almost every teen has a cell phone these days. A prepaid cell phone will only allow them to use a certain amount of money before the phone stops working. Let them decide how much money they want to put on their phone each month and stay with this set amount. This will prevent outrageous overages on cell phone bills.
The key is teaching them responsibility and at the same time still allowing them to be kids. Don’t be unreasonable with them and expect them to make a car payment every month, pay car insurance, cell phone bills, etc. Allow them to learn before you throw it all at them. Adult responsibilities will come as they become adults.