Important Money Management Tips For Teenagers

By: Boris_Dzhingarov

Financial literacy among teenagers is much lower than it should be. This is, in part, because money management education is not properly taught in schools. Most of the teens have no idea what personal finance is and why it is important. Parents are the ones that need to teach teens about money management. Obviously, this is much more difficult than it seems. The good news is that raising financially literate teenagers can be done. Follow these tips to do exactly that.

Teach The Main Money Management Terms

Everything starts with understanding terms like APR, debit, credit, payday loans and so on. Teens have to know what these mean before they are going to apply anything to a real life setting. Many parents think that children cannot understand the terms but that is definitely not the case. Teens learn much faster than what many believe.

Develop Visual Savings Plans

A visual saving plan can help since the teen can visualize what money management is all about. Focus on spendable money, savings and charity. See how much of the allowance you offer on a weekly basis should go for these 3 directions. Use containers to store the money. When a container is full, talk about how things could be handled differently. This variation is going to offer a practical approach to money management.

Show How Work Reaps Rewards

Children should be given some assigned tasks on a weekly basis like washing the dog, vacuuming or shoveling snow. Then, once the task is complete, a payment would be offered. Alternatively, you can encourage children to take advantage of their hobbies to work and make money. For instance, if the teen has a camera, teach him how he/she can sell stock photography or offer for free for future payments with examples like this one.

The idea is to teach the child that work offers money so that you can encourage a proper future financial development. Teens need to be offered structure when it comes to understanding the importance of work at a tender age. This perfectly combines with ideas about saving and sharing cash.

Discus Credit

When the child turns 18 it is the perfect time to start talking about credit and how important it is. All that you have to do is take a look at all the card offers that exist and the interest rate. Talk about them and teach the child to understand as much as possible about credit. Open a credit account for the child and monitor it. As you do this the teenager starts to build a good credit score that will be really beneficial in the future.

Let The Child Fail

Children have to be allowed to make mistakes with money, like spending everything on an item that is totally not needed and then not having money afterwards. Teens do want to buy the latest things and they should be able to do this if they have their own money. Afterwards, when money runs out, the teen learns even more important money management lessons in a natural way.

By Boris Dzhingarov

© 2017 Copyright Boris Dzhingarov - All Rights Reserved

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