Let’s get one thing straight: Money is a necessity. It’s a need of every human being to survive and live life to the fullest. Some might say that not everything revolves around money, and that may be true. However, we cannot deny that it’s essential to buy our basic needs such as clothes, food, and shelter.
What most people don’t realize is that a person’s ability to handle money starts from home. When a child is well taught about the value of money, he learns to appreciate every little thing he has in life. Plus, a child’s basic knowledge about money plays a fundamental role in managing money during adulthood.
Indeed, you should provide money for your child. But there is always a limit. As a parent, you need to introduce the value of money to your child as well. Doing so can be tricky, especially when your child is a teenager. Don’t get discouraged yet, as we will discuss some tips so you can teach your teens how to value money.
Set Their Bank Accounts
The first step to teaching the value of money is by giving teens the chance to monitor their expenses. And the best way to do that is by setting them up with their respective bank accounts. Ideally, you need to set up two separate accounts; one for savings and one for daily use.
By giving them bank accounts, you can teach them how to monitor their expenses. Let them have access to their accounts so that they can learn on their own, but be sure to have your own access too. A bank account is also a great way to minimize the need to bring cash all the time. Give your teens their debit card, which they can use in buying things they need.
Most parents think that they can save more if they do all the shopping for their kids. This method may work for most people, but it doesn’t teach teens how to handle money. Instead of buying things like clothing, give them a monthly allowance for shopping and recreational activities.
Let your teens know that they need to budget their allowance until they receive the next one. Allowing your child to take responsibility for their own expenses is a great way to teach living on a budget. Giving a limited budget can lead them to prioritize their needs over wants as they don’t have enough money for unimportant things.
Explain How Credits Work
One of the most common mistakes of young individuals these days is relying too much on credit. And if a person doesn’t have the proper knowledge about how credits work, it’s only a matter of time before their reputation gets damaged.
Talk to your teen and explain everything you can about credits, how it works, and how it may affect their future. Highlight the importance of keeping a good credit score. You can also give your teen a brief explanation about loan payment systems that helps people pay up loans in the most suitable ways for them.
Educate Them about Saving Money
Your teen is most likely aware of the importance of saving. But the tricky part here is how you’re going to convince your child to save. You can encourage them to save money by letting them save how much they want to save. Take things slowly.
Once your teens realize that saving money can help them get their dream guitar, shoes, or any expensive thing, they will do it independently. Who knows, they might even save a bigger portion of the money they receive afterward.
Discuss Insurance Basics
If your teen is driving already, it might be an excellent opportunity to start discussing car insurance. Explain to your teen the importance of insurance: to save them from spending their savings on events they’re not prepared for.
Show your child what an insurance policy would look like. Once the teen understands how car insurances work, move on to other types of insurance like home, health, and travel insurance.
Your teenage child may be too young to plan for their retirement, but teaching them how to prepare for it isn’t bad at all. A retirement plan may not be one of your teen’s priorities these days, but it’ll help them look forward to their future.
Understanding how to handle money, how much to save, and investing can significantly impact their lives as adults. The earlier they understand how expensive retirement days can be, the more they’ll strive to work hard for it.
Don’t ever think that your teen will never be ready to learn about money management. They might be a bit young in your eyes, but kids these days are savvy. As a parent, you are responsible for giving them a better life ahead by teaching them how to handle money properly.