This is a collaborative post
Does your teen have a job? Or are you still giving them an allowance every week? Either way, do you know what they’re spending their money on?
I think it’s fair to say that most teens aren’t thinking about savings accounts or Junior ISAs when they get their first taste of financial freedom. Click here to find out more about setting up a Junior ISA for your child. As a parent, we must step in and make sure that they’re familiar with some of the basic aspects of the financial world. Savings, interest rates, spending within our means…all these things incredibly dull to a teen who’d rather be with their friends or playing online, but if you take some time to teach them the fundamentals of saving, then they’re more likely to make better financial choices in the future.
Wondering how you can teach your teen about money? Read on for 4 simple ways.
Get them a bank account
It sounds simple, but bank accounts are a serious responsibility and a pretty big milestone in your teens’ life. Having a bank account that their wages or allowance can go straight into will help them keep track of their money better and get them used to the responsibility of using a card and keeping information such as an account number, sort code and PIN safe and confidential. It also gets them used to visiting a bank, depositing and withdrawing money and exposes them to some of the jargon that they’ll need to get familiar with.
Show them how a budget works
Whether they have a wage or allowances coming in, showing your teen the importance of budgeting is a great life lesson that they can take with them through college and all the way into adulthood. Take a look at what they’ve got coming in, and then ask them about their outgoings. Bus fares, days out with friends, gas, online shopping etc. Show them where their money is going and how they can make positive choices to ensure they have money left over for the important stuff.
Warn them of the danger of credit cards
You may be tempted to help them build their credit ratings by showing them all of their credit card options, but in reality, at this stage, you don’t need to. Introducing the idea of borrowing money and then paying it back over time, sets a dangerous precedent and the last thing you want is your teen excited at the idea of borrowing money, especially at such a young age. The implications of borrowing such interest rates and late payment penalties probably won’t even register with a teen who is excited at the thought of borrowing money, and not paying it back straight away. So, it’s best to steer clear.
Teach them to be content
Thanks to social media, it’s normal for teens to feel pressured into having what all their friends have. A new car, the latest trainers or headphones…however, if you show your child to be content with what they have, then they’ll be less likely to blow all their money on a single purchase, that won’t make them happy.
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