Help Teens Get Money Savvy
Few goals are more important than helping your teens become more money savvy, because knowing how to manage money can help them become self-sufficient and financially secure adults. Here are some steps you might take:
• Set a good example. Let your kids see you managing your own money — as you shop, compare prices, take advantage of good deals, pay bills, pay down or stay out of debt, save for financial goals, invest your money and follow a household budget.
• Teach them how to budget their money. Most people of any age can benefit from a budget that guides our spending. Young people can benefit, too. You might suggest that they target saving a certain percentage of their income, spending a certain percentage and giving away the remainder.
• Consider part-time jobs. As long as they’re doing well in school, your teens might benefit from a paying job. It can not only provide some spending money, but could also help them learn to be punctual and polite, and to work well with others. Common jobs include being a cashier or fast-food worker, mowing lawns or babysitting. But some creative thinking about skills and interests might lead them to make money by tutoring other kids, making and selling crafts or offering tech support services to people in the neighborhood. (With earned income, they can even open a Roth IRA. Learn more at Fool.com/retirement.)
• Wait until they’re ready before letting them use a credit card. Starting before they’re ready can lead to overspending and debt. Before you add a teen as an authorized user on your account, stress the importance of paying in full on time and the cost of not doing so.
Your kids can learn more in “The Motley Fool Investment Guide for Teens: 8 Steps To Having More Money Than Your Parents Ever Dreamed Of” by David and Tom Gardner with Selena Maranjian (Touchstone, $18) and “Money Skills for Teens: A Beginner’s Guide To Budgeting, Saving, and Investing” by Ferne Bowe (Bemberton, $12.50).