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Financial Advice for Teenagers
It is a plain fact of life that most of us learn many things by observation and then by “doing”. This applies to everything from playing games to financial planning. This is the reason that financial experts recommend involving teenage children in household financial matters and training them early about the benefits of personal financial planning and wealth management.
How can this be achieved? There are several good approaches to involving teenagers in their own financial plans, but it all begins with open discussions. Parents must overcome any personal obstacles they might have to talking about money, and letting teenagers know that there are good ways to use money and abusive ways to use money is crucial.
Once discussions begin most parents are surprised to find their teenager may know very little about budgeting and healthy spending habits. Instead of blaming themselves and wringing their hands over it, most financial experts recommend that they jumpstart their child’s education by introducing them to the power of the budget.
Most families provide non-working children with an allowance, and one of the best lessons a parent can teach their teenager is how to budget this weekly income. Though this money may not be a significant amount it should be made clear to the teenager that there are no standing arrangements for further funds, and that if they want something like clothing, movie tickets or other “non essentials” they are going to have to use these funds to budget for them. Quite often teenagers begin to make sacrifices and choices they would not have considered prior to the implementation of a personal budget.
Of course this may be too simple for an older teen, and this is where some controversies exist. There are some experts who think it a wise idea to introduce teenagers to credit cards at this point in their life. They believe this is a good idea for a few reasons: it will teach them how to use credit properly and it will make them responsible to the budget. Of course no one advocates letting them loose with an unrestricted credit card, but simply allowing them supervised access to credit can really teach some good lessons.
Finally, one of the best forms of financial advice or guidance for teens is “real world” experience. Some parents ask their teenagers to balance the household checkbook, double check all of the credit card statements or bills and get a really good idea of what it takes to make ends meet and stick with a budget.