- Set them up with Credit Union accounts. Start with a checking account for daily spending and a savings account for future goals.
- Teach them about debt and its consequences. High school students, regardless of their post-12th grade plans, should know about the cost of going to college and the consequences of debt. Even if parents plan to pay for the child’s entire college education, things can change.
- Foster a savings mindset. Whenever kids receive money -- from jobs, allowances, or gifts -- encourage them to pay themselves first. They should put a portion of it into a savings account for future use.
- Create credit smarts. Many young adults have a tendency to lean too heavily on credit. It doesn't take long to do damage.
- Spend Less Than You Earn, Save The Difference. Teens need to understand negative numbers from math class, so it shouldn't be hard to transfer that to money. When you consistently spend more than you make, you will end up with a negative account balance.
- Set a good example. Children often copy the actions of their parents in many aspects of life. Sometimes they do it consciously, and sometimes they don’t. The same thing can be said when it comes to financial management.
- Let them get a job. Many parents are afraid to let their teens go out and work. According to a study, teenagers who take part-time jobs actually get higher grades.
As you may have noticed, educating your teens about personal finances isn’t something you can give them a crash course about. Rather, this has to be a long-term effort on your end, particularly once they transition towards adulthood. Additionally, talking about these things isn’t enough; you should also set a good example for them. Let your teens see what good personal finances look like in practice.
Teaching your teenagers money management skills early on can help prepare them financially for their own future.
