6 Practical Tips To Raise Financially Responsible Teenagers!
From opening their own bank account to helping with house budgeting, here are 6 practical tips to raise financially responsible teenagers.
Finance and teenagers! Don’t you think I have thrown an odd combination at you? Teenage years are when dreams are high and every castle in the rainbow shines bright. When hormones run amok and spending becomes the order of the day, raising the subject of finance and budgeting fades into oblivion.
It becomes a tough topic for parents to even broach in front of their teenage children. That said, teaching financial responsibility to teenagers is crucial and is one of the important milestones in parenting journey.
Here are 6 practical tips to encourage teenagers to become financially responsible and bring in the culture of saving in their young minds:
Bank accounts are worth banking on!
Guide and help them your teen open their own bank account. This will be a valuable lesson in managing personal finance and managing their own account. Also, money saved is every money earned so the money they value and save in their bank account will be a rewarding experience for children. When they save money and see their account balance grow, they feel proud of their achievement and it encourages them to manage finances well.
Bank account comes with essential tangible paraphernalia like cards, cheque book, e-banking, mobile banking, other account specific items so handling them gives a sense of entitlement or empowerment.
Involve them in household budgeting
Once teenagers understand the value of money, next comes budgeting. What is budgeting? Budgeting means planning and managing expenses. Monthly budgeting would involve planning the funds on a monthly basis.
Work as a team and include all your expenses for a month. The family should sit together and add all their monthly pay-outs. Help teens understand that all their purchases involve money, so how to spend the money efficiently will come under budgeting.
Prioritise all buys depending on the sense of urgency. If something can wait till next month or the following months, then that need not be added in this month list. Strike them out.
This method of prioritizing and managing money will help them strike out unnecessary purchases. Ask your children to maintain a journal or a book. Let them note down the purchases to be done and also the expenses that involves outings or birthday parties or any other fun activities. This will help them track their outflows and they will be more cautious with their expenses.
Fixed monthly pocket-money
Make a monthly pocket-money kitty and label their name. This will help them be mindful in their spending. They will also know that based on the amount in the kitty, they will have to manage all the spends which will teach them money management skills.
Embrace modern technology and finance apps
Do not shy away from modern methods of managing your personal finance. Even if you are comfortable using conventional ways, do not show resistance to new applications. Tech gizmos and various apps are making the job of administering and managing the financial affairs easy, so why not? A host of programs and tools are available which help in setting financial goals. So, if your teen has a good idea and easier method of maintaining a balance sheet or tracking their spending using a particular app, then let them adopt that method. You can give your inputs but acknowledging the handful of wisdom coming from your teen is very important too.
Open discussions and asking for their opinion
Teenagers may not be adults but they are no more a child too. They can understand money aspects if guided effectively. Ask them their opinions, their ideas on money aspects.
Money can be a scary subject for many teens. Sitting with parents to discuss something can make teenagers less intimidated. It can also encourage dialogue from their end and make them ready to learn and unlearn in the process.
Walk the talk
Last but not the least would be walking the talk. Exercise the culture of saving yourself before dictating this advice to your child. They see you and they follow your behaviour. So let them get a feel by seeing you implement the methods. Let them recognise the positives of maintaining a cash book or expense journal. If they see you manage money well, they will definitely want want to follow suit.
Image source: still from Aamhi Doghi
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