Putting Your Teens on a Budget
A lot of parents are inadvertently raising irresponsible spenders. Money management is a skill parents should teach their kids. Putting your teen on a budget is a huge favor to them even if you are financially well off. Because so many parents want to give their kids more than they had, they’re unintentionally teaching their children poor spending habits. Not only should you lead by example financially but you should empower your kids to make sound financial decisions.
- Buy your teen a pre-paid cell phone so that they have to budget their time accordingly. If they run out of time before they are allowed to top up their minutes, don’t increase their budget. You may even teach them they can’t go out without their cell phone having adequate available minutes so that they are reachable by you.
- Instead of giving your teen a credit card for emergencies, give your teen a pre-paid credit card instead. Teach them how to load it and how to manage it properly. This can help cultivate a good relationship with money and budgeting and preparedness rather than teaching financial wastefulness
- Have your teen tithe 10% of earnings. This teaches them to donate and to care for others
- Require the teen to save 20% of their earnings in a savings account. If they develop this habit early, chances are that they’ll learn to put money away for a rainy day all throughout adulthood. IF they want to spend something in their emergency account, it’s also a good idea to have requirements such as only taking out a partial amount and having a good reason for dipping into that account.
- Consider offering bonuses on the teen’s allowance. Just like an employer provides bonuses and commission for work above and beyond regular work requirements, you can do the same with chores, with grades, and other measurables.
Teaching your child money management skills while they are young and even before their teens will help you raise a financially conscious individual who will know how to manage their money well. This is a great way to send your child out into the world. Far too many middle-classed kids go on to file bankrupcty before they’re 30 years old due to heavy debt load and frivolous spending.
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