6 Money Management Principles Every Teenager Needs to Learn (Before It’s Too Late!)

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Skills Teens Need

One of the primary goals of parenting is to raise kids that become wise consumers and successful contributors to society. To do that, you must teach them about adulthood, especially once they reach their teenage years.

Along with teaching your child the importance of personal hygiene, waking up on time, and being kind to others, take this opportunity to show them the basics of financial management. You could even build this out as a project with a hands-on application. Knowing how to earn, save, and spend money will help position your teenager for success and fulfillment in their adulthood. FutureSTRONG Academy shares six principles to start teaching them today.

1. There’s Value In Hard Work

The last thing you want is for your child to think that everything will be given to them for the rest of their lives. If your child has reached their teenage years, it is the perfect time to teach them the value of hard work. This can be as simple as giving them an allowance for completing household chores. This can give them a few bucks to kick start their spending and saving education while also demonstrating hard work and money.

If your child is old enough for a job, that’s an even more effective way to teach them. Help them find a job that will introduce them to the reality of working for somebody else, getting a paycheck, and paying taxes.

If you or someone else in the family is an entrepreneur, you can teach your teen about starting a business. Many steps are involved in getting a business up and running, but they all revolve around money. Go through the process of financing a startup using crowdfunding, personal savings, credit cards, small business loans, and other methods.

2. You Need A Bank Account

There are perks to paying with cash, but it is impractical not to have a bank account these days. Consider opening up an account for your teen to introduce them to managing their money when they can’t physically hold it.

However, keep in mind that you may not want to have their account connected to yours in the event of overdraft fees. With that said, make sure you are a cosigner on the account, which will allow you to monitor their spending behavior and help avoid incurring the penalties your teen may incur.

3. Giving Is Good

Being generous is a virtue that children and adults alike should aspire to. And what better developmental stage to teach your child the importance of giving than the teenage years?

Teach your child to focus more on others and less on themselves by showing them how to donate to charity. Find a local organization that aligns with your family’s values, and encourage your child to give a portion of their income (and time) for a greater cause.

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4. It All Comes Down To Saving And Spending

Budgeting is critical for anyone hoping to succeed as an adult. And budgeting can be boiled down to two practices: saving and spending. It’s important to understand that most teenagers are not good at saving money, but that doesn’t mean that you cannot teach your child early on the value of saving and how to do it.

Spending is not inherently wrong, but you want to teach your child to be mindful of every dollar they spend. And if they want a specific item, they should know how to save for it. This will help them obtain fundamental budgeting skills while also giving them first-hand experience in how rewarding it is to buy something you have saved up for.

5. Watch Out For Wasteful Expenses

Speaking of spending, help guide your child away from bad purchases by discussing these wasteful expenses with them:

• Trendy clothes and cosmetic products
• Video games
• Dining out too frequently
• In-app smartphone purchases

6. How To Research For Big Expenses

Parents can’t always be by their teenager’s side when they go out to make bigger investments as a teen and as a young adult, so it’s a great idea to give them some tips on how to do their own research. Right now, buying a car is probably top on their priority list, so use that as a way to walk them through the vetting process. As adults, we know not to jump at the very first good deal we see. Help your teen research the reliability of their potential cars and the reviews of the seller, as well as the cost of insurance and gas mileage before they make a quick decision.

You can also model this process with your own decisions. For example, you may be looking into a home warranty and wondering, “is the cost worth it?” Talk to them about your questions, and invite them to research with you to see what a home warranty really covers. You’ll discover that these warranties work in conjunction with your standard home insurance; homeowners insurance covers your structure, but a warranty covers the systems that make your home run. You can talk through the pros and cons of paying for additional coverage based on how old your major appliances are and how much wear and tear your home has experienced. Not only will your teen learn along with you, but they will also get great knowledge about home warranties for when they become homeowners down the line.

Building A Money Mindset

Like most parents, you want your teen to be a healthy and prosperous adult. Teaching them the fundamentals of money management is crucial for making that happen. Remember these six principles and keep learning other ways to guide your teen to responsible financial management. And use the resources from FutureSTRONG Academy to help your teen learn valuable skills, like self-respect, time management, and critical thinking.

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FutureSTRONG Academy believes that every child has potential. They just want to be told so by loving and caring adults. Call 678.310.5025.

Featured Photo Credit: Karolina Grabowska via Pexels

Photo Credit: Cottonbro via Pexels

Article Author: Julie Morris

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