As your kids grow older, it will become essential that they learn how to properly manage their money. There are a lot of financial pitfalls the younger generation might be trapped by without the proper guidance, so it's up to their elders to set them on the right path early. If your children are fast approaching maturity and you haven't had these difficult but important conversations about money, here are five tips to help teens learn financial responsibility.
Start a Bank Account
One of the most fundamental steps to financial independence is a bank account. Whether you've been saving your child's money in your account, a "kiddy" account, or they've just been carrying all their cash on them this whole time, it's a smart idea to get them a proper checking and savings account set up. On the most basic level, this gives them a place to securely store their money that's all their own and readies them for future employment opportunities. Beyond that, though, it's also a great way to introduce concepts like interest and the differences between account types, plus things like CDs they may look into getting at some point.
Contribute to a College Fund
The price of education continues to increase, so it's never too early to start saving. As college approaches, though, it's not a bad idea to have your child help with the contributions themselves. Saving for college not only gets them invested in their future education but sets an example to follow for future retirement funds and the like. There's also the simple fact that more people contributing to their college fund means more money to attend with and fewer loans to take out, both of which are good things.
Most people already have a basic grasp of how to put together a rudimentary budget, but it's well worth it to sit down with your child and teach them the way to create a real budget. These kinds of things that seem obvious to us now are often what teens struggle with the most. Helping them to learn how to prioritize spending and saving in a formal way instills good financial management habits early on, habits that will help them immensely once they set out on their own.
Get Involved in Making Money
Making money for themselves is something of a rite of passage for most teenagers. Raking leaves and mowing the lawn isn't going to last forever, so it's important that they one day go out and get a job for themselves. While giving them the independence to find a job is a good thing, there's nothing saying you can't help out. Getting involved in your child's job search can be a great help to them on several levels, one of them being the reassurance that they're on the right path. Maybe you even have some tricks of your own to share if they happen to get a job somewhere you've worked before.
Be a Role Model
Perhaps most important of all in teaching financial responsibility to your child is setting a good example for them to follow. Children naturally look to their parents on how to navigate the world, a fact that holds true even as they get older. In order for the lessons you're trying to teach them about managing money, saving and spending responsibly, and keeping a good work ethic to stick, you'll have to practice what you preach. If you've been irresponsible at times in the past, let this be the motivation you need to clean up your act.
It's not always easy to teach your kids about properly managing their money. Try out these five tips for setting them up for financial responsibility to make that job a little easier and their futures a bit brighter.