When To Start Financial Planning With Your Teen

Teens may not listen to you about keeping their rooms tidy or coming home past curfew, but their ears are likely to perk up when you talk about cash. Take advantage of their interest to teach them some valuable financial management skills.

After all, it is your job to ensure that your children become independent adults who can survive on their own. With proper guidance and direction, your kids are more likely to make sound financial decisions and less likely to call you for cash after flying the nest.

The great thing about starting financial education early in a teen’s life is that they develop a sense of responsibility and accountability that can spill over into other areas of their lives. They'll also have a better chance of developing a healthy relationship with money, increasing their likelihood of becoming good stewards of their own finances in future.

As you start the conversation around money management, emphasize these three principles:

  • Making and living by a budget.
  • Saving money for future use.
  • Steering clear of debt.

Financial Planning For 11-13-year-olds

The preteen years are ideal for you to start inculcating financial responsibility in your children. You can start by teaching them how to draw up a simple budget based on their income (allowances, monetary gifts, birthday checks, etc.) and expenses. If your child has no income, cultivate their work ethic by encouraging them to earn money doing chores like mowing lawns, raking yards or washing cars around the neighborhood.

Once they have some money coming in, help them figure out which expenses - movie tickets, clothing, etc.- they can handle on their own. This is also a good time to teach them how to save for bigger future purchases.

Financial Planning For 14-17-year-olds

At this age, your teen will be ready for a part-time job either during weekends or holidays. This increased income comes with more freedom so emphasize the importance of budgeting and spending on purpose. Also get them in the habit of putting something aside, say to buy a car or pay for that summer vacation they’ve been talking about.

If you gauge that they are ready for more financial responsibility, go ahead and open a teen checking account for them. Most of these are set up with you as a co-owner, giving you the ability to view activity as well as set up limits and restrictions on the account. This is an excellent way for your teen to get a feel of managing their own money when the consequences of messing up are not too serious. To make them even more responsible for their financial actions, resist the urge to bail them out whenever they make mistakes.

In spite of your best efforts, your teen can fall into dangerous financial habits like gambling and will require professional help to get back on track. If this is the case, don’t hesitate to reach out to us for help.

Speak Your Mind