This is a collaborative post on Personal Finance by Greg and Marina.
If your children have entered their late teens, they might be searching for their first part-time jobs to earn some money while they study. Even if they aren’t keen on heading to work, getting their very first job is an important milestone in their lives.
Encouraging your teens to start working, even if it’s only for a few hours a week, can be a great way to get them thinking more about money. As a late teen, money has probably been at the back of their minds.
Most teens don’t have any major payments to make. They don’t pay rent or bills and their parents buy their groceries for them. This is totally normal but it means that most teens have absolutely no idea about money and savings.
In today’s day and age, it’s important to have savings. They act as a safety net in case you get an unexpected rise in your utility bills or your car breaks down.
For many parents, it’s difficult knowing where to start when it comes to teaching their kids about money. We’ve rounded up the best tips for all of the parents out there to help with this so that you can help your kids become smarter with their money.
Help Your Teenager To Open Their Own Bank Account
The first step to teaching your older kids about money is helping them to open up their very own bank account. They’ll, when your teens get their first job, they’ll need somewhere for their hard-earned money to go.
One of the best types of bank accounts to open up for teens is a youth account. They are created specifically for young adults to help them spend, save, and invest their money.
The Fidelity Youth account is offering an amazing $50 bonus to teens who activate a new account with them. Within 10 days of the account being activated, Fidelity will deposit $50 into their account.
Once your teens have their own bank account, they can watch their savings increase. It’s a great opportunity for them to learn about the importance of managing money based on income and expenses.
Teach Them How To Set Goals And Budget
To most teens, saving seems pretty pointless if they don’t have something specific to work toward. They might lack the motivation to save ‘just in case’ and, instead, they see the money in their bank account as something to immediately spend.
Helping your kids to identify a specific goal will keep them motivated to save up and add more money into their accounts. You can also help them to budget their money so that they reach their goals.
Use financial goal-setting as a way to teach your kids vital budgeting skills. Break down how much they need to deposit into their savings account each week to reach their goal and buy the things that they want.
Teach Them How To Track Their Spending
Part of the budgeting process involves tracking expenses. Your teens might not have the grocery or utilities to pay for but that doesn’t mean they won’t be spending their money. They might want to buy a new games console or some new clothes.
Whether your children earn a weekly allowance from your pocket or they earn money through a part-time job, get them to write down every time they spend some of their money. No matter what they buy, even if it’s a bag of sweets at the local store, they should write it down in their notepad or on an expense tracker app.
This might sound old-fashioned but noting every expense down will help your teens to learn how much different things cost in life. They can identify their spending habits and see where changes or improvements can be made.
Open Up The Conversation About Money
Money is often seen as a taboo subject to talk about. However, opening up the conversation and encouraging your teens to speak more about finance will help them to create a healthy relationship with money.
Finances are not something that should be embarrassing to talk about. If you want your kids to learn about how to properly save their money, you need to open up the conversation around it.
This might involve setting up a weekly meeting where you can run through their savings and expenses. It might involve bringing money into the conversation around the dinner table.
In Conclusion: Teaching Your Teenager About Money
Teaching your kids how to save for a rainy day from a young age will put them in a great position for the future. They will have the vital money management skills that they need to thrive and live comfortably.