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How to Teach Your Teen About Managing Money

calendar iconPosted: September 27, 2021
teen saving money

Have you ever learned a money management lesson the hard way and thought, gosh, I wish someone taught me about this when I was younger? Although you can’t change the past, you can do your part to pass on money management skills to the next generation. Empower your teenager with the knowledge they need to make smart financial moves.

Talk About Money

Even if it feels uncomfortable and it’s something your parents never did, talk to your teen about your financial situation when appropriate. For example, you could explain how you are replacing your furnace using your emergency fund, what an emergency fund is and why it’s important. Or you could talk through your weekly grocery budget and how you ensure you don’t exceed it by meal planning, using coupons or skipping frivolous purchases.

Help Them Open Their Own Accounts

If your teen is still storing their money in a piggy bank, it’s time to help them open their own checking and savings accounts. At Landmark, we offer youth accounts beginning at age 14. With access to Online Banking, they can check balances, view account history and transfer funds. By getting hands-on money management experience under your guidance now, they will be better prepared to make financial decisions as an adult.

Teach Them to Set Savings Goals

If your teen has something expensive in mind that they want like a new video game system or concert tickets, encourage them to set a goal of how much they will need to save. Help them break down how they can achieve the goal by setting benchmarks. Ask them to brainstorm ways they could earn money to save towards their goal like babysitting, pet sitting, mowing lawns, doing odd jobs for relatives or getting a summer job.

Explain How Credit Works

The next time you swipe your credit card or open your monthly statement, use it as an opportunity to explain to your teen how credit cards work. Point out how if you don’t pay your balance in full each month, you will be charged interest and how that can add up over time. On the flip side, help them understand that using a credit card responsibly can help them build their credit history which will come in handy when they need a car or home loan someday.

As your teen’s most important role model, you can foster healthy financial habits. Make money a regular part of your conversations and give them the opportunity to practice smart money management. Your efforts to equip your teenager with these essential skills and knowledge will pay off as they venture into adulthood.

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