Caring for teenagers can be a challenging experience. As your youngster gets older, they’ll start to learn more about the world around them. This includes learning about money, debts, and saving.
As a parent or care provider, you can play a crucial role in shaping the way that your child behaves with money. After all, the chances are that your child won’t get much of an education on managing their cash at school. Whether your teenager has recently started asking for more cash to go out with their friends, or they’re just starting their first job, there are various steps you can take to help set them up for success.
Here are our top tips on helping teenagers and students to manage their money.
Give Teenagers Responsibility Early
To help children understand the value and importance of money, it’s crucial to introduce them to how cash works, and how important it is to spend only what they can afford. Providing your teenager with regular pocket money so that they can learn the basics of spending and saving cash is a great way to get started. A regular dose of pocket money acts like a kind of wage – you can even ask your child to complete certain tasks like cleaning their room to get their pocket money each week.
Once your child has their pocket money, avoid giving them extra cash for the things that they can’t afford. Though it might be hard to say no at first, being strict will show your child that if they want to make bigger purchases, they need to save.
Set the Right Example
Most teenagers and children will mimic their parents’ behaviour when it comes to learning about saving and spending. That doesn’t mean that you need to be perfect with your spending habits – we all make mistakes at times – but it does mean thinking carefully about the example you set. For instance, while you might need to take out a personal loan from time to time, you shouldn’t be getting a loan or using a credit card for every expense. Show your child that you know how to save and deal with delayed gratification too.
Setting the right example could even be as simple as inviting your child to join you as you search for the best deal on your car insurance or compare your options for a new broadband provider. As your child gets older and starts to learn more about money, you can even get them involved in your budgeting efforts.
Help Your Teenager to Develop a Savings Habit
Learning about living within your means, and saving is one of the most crucial lessons that a teenager can get. With that in mind, take advantage of every opportunity you get to show your child the value of saving. For instance, the next time your child asks you for a new game, don’t just give them the cash they want, sit down with them and figure out how many weekly pocket monies they’re going to need to be able to afford the item they want.
If your teenager comes to you and tells you that they want a car, work with them to figure out how much owning that car is going to cost and help them to find a job that will allow them to pay for the expenses.
Get Used to Talking about Money
One of the worst things you can do is a parent is keeping your teenager out of your financial conversations. As your child begins to ask for more money, or show any interest in cash, get them involved in the monthly budgeting process. Show them how you afford the monthly bills by carefully organising your cash into different segments each month.
If you take out loans to pay for certain items, make sure that your child understands that those loans come at a price. Although they allow you to pay for things over time, they also require you to pay a certain level of interest each month. Talking transparently about money will pave the way for a better relationship with finances for your child.
Help Them Manage Their First Wage
Finally, when your teenager does take on their first job, make sure that they understand the value of the money that they’re earning. Encourage them to think about their purchases not just in terms of how much an item costs, but also in the context of how many hours they would have to work to replenish what they spend.
When your child gets their first job, this is also a great time to sit down with them and think about their long-term goals, like buying a car, or going on holiday with their friends, and how they can save for those things.