As your child quickly becomes a teen, his or her need for independence is likely to grow whether you as a parent like it or not. Instead of fighting teens' need for independence, increase their financial responsibility by providing them plenty of insight on how to manage their lives on their own.
Financial responsibility is important for everyone to discover, and being taught obligations by a parent or guardian could help teens keep these core values down the line. According to a Focus on the Family survey of 13,000 college student respondents, more than half said they had $5,000 in credit card debit while in school, and one-third of those who responded said they had double that amount in debt. Before it's too late, it's important to reach out to your teen and make sure he or she will be financially responsible on his or her own.
Here are five tips to make your teen financially responsible:
1. Get your teen involved in a monthly bill
One of the best ways you can promote successful money management strategies with your teen is to get him or her involved on a monthly bill, CNNMoney reported. The easiest bill to pick is likely your family's cell phone bill because many teens spend a lot of their time on these devices. Simply ask your child to help toward the cause and set strict dates for when the bill is due and when he or she owes you the money.
Getting monthly budget planning in their heads early will help teens know what they can and can't spend in the future.
2. Encourage your teen to get a job
There's no better way for teens to understand the value of money than to have them work hard for it. According 360 Financial Literacy, by encouraging teens to get a job, they will have their own money to spend on expenses. Once they start receiving paychecks, you can talk about the importance of starting a savings account and why it's necessary to not spend all their money the second they get a paycheck.
According to the source, make sure your teens know to pay themselves first by depositing a portion of their paycheck into a savings account before even handling the money.
3. Match what your teen saves
Teens are constantly surrounded by other kids with the newest gadgets, video games or tennis shoes, which can make it extremely hard to promote good savings practices. According to the Association for Financial Counseling Planning and Education, to get teens involved with their savings accounts, promise to match whatever they save at the end of the year.
Also, you can help match what they save for a new car. This will help your teen understand the importance of a solid retirement plan when he or she is older and teach them how saving money for the long run truly pays off.
"Help teens understand there are serious consequences for their financial decisions."
4. Don't micromanage their accounts
To get the best experience and learn the most about financial responsibilities, teens need to go through money mistakes, the AFCPE explained. An essential part of growing up is knowing how to manage your finances while in a jam. If your teen spends all the money in his or her checking account, you shouldn't punish your them. Instead, help him or her understand there are serious consequences for financial decisions. Maybe your teen will think twice about making an impulse buy after he or she has run into the red.
5. Get your teen to visit the bank
By coming into one of our many banking facilities, your teen can talk with a financial expert on how to best plan his or her finances. Our banking experts can help teens understand the importance of checking and savings accounts.
For more information about smart ways to manage your finances, contact Landmark Bank.
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