Has your teen just landed a part time job? Congratulations on your parenting and congratulations to him or her for securing a position. Most teenagers work in high school, during the summers and throughout college. The key is to teach your teenager how to manage the funds. Parents are often guilty of simply telling their children to behave, yet they’re not sure exactly what is expected under the circumstances. The same holds true for money management for teens. Simply telling them to manage their money without giving them the tools for success sets them up for failure.
Help them set a budget. Identify the net amount and frequency of their net pay. Fixed costs such as cell phone payments, car insurance payments and gas purchases should be broken down into the same time periods as income. For example, it pay is received every week, calculate the weekly cost for cell phone payments, car insurance payments and gas purchases. The amount remaining in the paycheck is weekly discretionary spending. Have them set a short term goal. Maybe they would like to take advantage of the awesome deals offered by Groupon coupons and save for the purchase of a pair of Uggs. Have them determine the total cost and break this down to the amount needed to save each week. This exercise also instills savings habits as well as the benefits of delayed financial gratification. These lessons will pay off handsomely in the future as they begin to prepare budgets for larger expenses and larger incomes.
Taking personal financial responsibility is a huge step in maturity. Don’t expect this to happen overnight. Many adults never learn to manage their personal finances and continuously face financial difficulties. By teaching your teen these skills at an early age, they will develop positive money management skills that will hopefully serve them well for the rest of their lives. Give your teen encouragement and prepare them for the inevitable surprises and unexpected expenses. Congratulations on your awesome parenting skills.