As your teen grows older, they will inevitably want to gain a little independence in various aspects of life. As a parent, teaching them to be responsible with money is undoubtedly one of the most important challenges of all. If you truly wish them to take responsibility, though, you must first ensure that you know what to teach them about the concept of teenage money management.

The lessons you teach your child should cover the issues of saving, investing, and especially budget. Focus on the six items below, and you won’t go far wrong.

#1. Set Up A Bank Account

Opening a bank account instantly takes teen money management to the next level, bringing a far more mature approach than living off of paper money kept in their bedroom.

Aside from naturally encouraging teens to take greater control of their finances, the bank account gives them the opportunity to live in the modern world. Even a simple direct debit for their gym membership or PlayStation account teaches them to manage their funds properly.

For many teens, having a bank card rather than cash can reduce the threat of wasting small amounts of cash on needless purchases. It’s also a great introduction to interest rates.

#2. Encourage Them To Save Some Of Their Wage

Your teen will probably want to get a weekend or summer job to buy their favorite clothes or enjoy activities with their friends. However, it’s not all about today, and teaching them to save is vital.

Putting aside a percentage of their wage (even if it’s just 10%) into a jar or a separate account that they can’t touch can pay dividends. Whether this money goes towards their college degree or their first apartment doesn’t matter. It’s the valuable life lesson that truly counts.

Teach your teen this lesson as soon as they start their first job (it’s OK to let them enjoy their first full packet), and success will follow.

#3. Warn Them Against The Financial Traps

In addition to teaching your teen about the positive steps that they can take, you must also ensure that they know to avoid the products that could come back to haunt them.

Store cards and credit cards will become available to them before you know it. Teaching your child the value of a little patience and the ability to look at the long-term repercussions can make a telling impact that will serve them well for life.

Preventing the headaches that come with falling into debt is one of the best things you can do for your teen, especially as they won’t be earning enough money to escape it.

#4. Show Them How To Understand Money

It’s very hard to establish the right routines if your teen doesn’t quite understand the complexities of handling money. Sadly, schools do not teach those practicalities. Make it your job.

Reading a paycheck and understanding the deductions such as tax and health insurance will help your teen create far better budgets and financial plans. If you allow them to keep working on the pre-deduction numbers, it’s very likely that problems will surface.

When teenagers discover how quickly money is lost before it even enters their bank account, they should start to take greater responsibility in regards to making their funds work harder.

#5. Let Them Manage Money

Even as a young teen, your child can learn to manage money before they get a job. House chores can be used to teach the value of working for money, and is a great place to start.

As a parent, you need to know that your child has a good diet and all the necessary home comforts. However, using a budget for days out and activities encourages them to think about whether one idea might be better than another. This logical thinking can pay dividends in the long run.

Irrespective of how much money your child ears in the future, budgeting and managing will play a central role in their financial future. Do not forget it.

#6. Teach Them That Money Isn’t Everything

Teaching teenagers to respect money is important as they approach adulthood. However, they shouldn’t equate lavish spending to having a great life.

Teens are subjected to adverts as well as social media posts from friends and celebs. This encourages them to crave the big holidays, fancy cars, and luxury goods. Finding the balance between contentment and ambition is vital. Even when choosing a career, money isn’t everything.

When your child has a healthy relationship with money and knows how to work this into a balanced lifestyle, their future will look brighter than ever.

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