Keeping Teens On Budget

Most of us haven't made the best financial decisions at one point or another in our lives. We've all been guilty of racking up our credit cards a handful of times, or we've purchased something that we really didn't need, or we took that extravagant vacation when we really should have been saving our pennies. And as adults, we have to take ownership of our financial responsibilities (or irresponsibility!), but when we begin having children, we don't have the luxury of throwing caution to the wind. As our children mature, being the little sponges that they are, they become very aware of the correlation between money and responsibility. We don't want our teens making the same mistakes that we did, and we certainly don't want them ever feeling the crippling pressure that debt can create. You don't need to have an accounting degree to teach your children financial responsibility, but if you're struggling with how to set out a plan, here are a few pointers.

1) Sit down with your teen and have an open discussion about what they think their expenses are. They might have a cellphone, or a car, or maybe a membership to a gym. Find out what their financial goals are and educate them about the benefits of putting money away for what they want, rather than spending money on impulse purchases.

2) Don't give your teen a credit card. Just don't. They need to learn that if the money isn't in the bank, it's irresponsible to rely on someone else (the credit card company) to pay for something. If you do decide to give your teen a credit card, make sure it's in your name, and the limit is extremely low, like $300, that way if they "rack it up", it's not financially impossible to pay it off.

3) Teach them to be a  wise consumer. Teenagers love to shop. Especially the girls. They are inundated with ads in magazines, billboards, TV that all tell them to shop, shop, shop! So forget about trying to get that out of their system! The best way to combat their shopping urges, is to teach them how to be the best consumer they can be. Teach them to research products before they buy them!