Tips for Teaching Your Teen Money Management

College fund glass jar with money inside

When you're raising a teenager, you worry that you're teaching them everything that they need to know before leaving home. One way to help your teen succeed is to teach them about money, ensuring they can budget and save. Here are a few ways to teach your children the value of money.

Create a Budget

While your teen doesn't have a mortgage, there are expenses specific to them, such as school lunches, sundry items, field trip costs, and other things. At the beginning of each month, sit down with your teen and help them create a budget for these expenses even if you're the one paying. You can also use this time to explore the previous month's budget to see if there were any unexpected expenses.

Earning Money

One of the best ways to teach your teen the value is to make them earn it. During the school year, you might not want your teen taking a part-time job and loosing precious study time. You don't want to give them money without a way to earn it.

You can assign your teen a set of chores for a set amount of allowance each, or another option is to assign a value to each job and let your teen decide how much they want to earn.

Encourage your teen to take a summer job. They can work more hours while school is out and save money to cover their budget during the rest of the year. It's a great way to teach them about saving for future expenses.

Open a Bank Account

Take your teen to a local bank or credit union to open a checking and savings account. You can move their weekly allowance to these accounts and then teach them how to track this money. If the bank or credit union has an app and online banking, you can walk your teen through setting up these benefits.

For example, you and your daughter are out shopping, and she finds a dress she wants for the dance. It's over the budget you set, so she needs to pay the difference. She can use the app to see if she has enough funds available to pay the difference in real-time. Also, this teaches your teen the importance of saving.

Back-to-School Shopping

Back-to-school season is an opportunity to teach your teen the value of money, quality, and budgeting. Create a budget for school supplies and another for new clothes. You want to make sure that your teen has enough money to cover all expenses but not necessarily buy deluxe everything.

When you take your teen shopping, you can keep a running tab of how much they've spent and what they still need to buy. There will come a time when they have to decide if they want a name brand pair of sneakers and two cheap tops or good sneakers and tops. They learn the value of quality and the need to compromise on some items to get a special one.

Saving for College

Even if your child is likely to get a scholarship, there are expenses your child needs to cover. Your child should pay for a few costs, such as eating out, going to the big game, and hanging out with friends. You can encourage your child to put a set percentage of all earned money away for these expenses. Hopefully, your child can arrive at school with some of these expenses covered.

With a little practice and hard work, you can help your teen learn responsible money skills. It's a skill they can use for the rest of their life.