If you and your teen are worried about their ability to be financially independent when they start having to provide for themselves, you’ll be glad to know that what your teen learns about money from you can help set them on the path to financial success in the future. The trick here is knowing what to teach them so that they’ll always remember the correct financial principles that they should live by.
To help you know how this can be done, here are three tips for teaching your teen about personal finance.
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Encourage Them To Earn Money
Before you can have any kind of relationship with money, you first have to have money. And the best way to teach your teen about how to interact with money is to encourage them to earn it for themselves.
Even if you’re able to provide everything that your teen needs, learning how to work hard and earn money from a young age will help to set your teen up for future success. Not only will they learn the value of hard work and what it takes to get and keep a job, but they’ll also learn about finding a job that provides them with what they need and how to do things like negotiate pay, deal with taxes, and more.
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Help Them Create A Budget With Savings
Once your teen has a bit of their own money, you’ll then want to teach them how to use this money effectively.
To do this, you should help your teen figure out a budget that will work for them. While their budget will likely be a lot different than the budget that you’re working with as a parent, you can help them learn the concept of allocating money to certain things that they want or need. A big part of this should concern saving money. If you can teach your teen the importance of saving a certain amount of money from every paycheck they get, they’ll be much further ahead financially than their peers who didn’t learn this lesson or take it to heart.
To help them figure out and stick to a budget, you may want to get a planner or budgeting book printed for them so they can have something to refer back to when needed.
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Talk About Credit
While your teen likely won’t be using credit at this point in their life, it’s important to talk to your teen about credit and how to use it properly. You can and should discuss things like credit cards and loans, which they may be dealing with in their later teen years as they leave home and get an education. You’ll also want to teach them about building their credit and how their credit score can impact them.
If you want your teen to know all about personal finance when they reach adulthood, consider using the tips mentioned above to help you have these vital conversations.
