Teenagers need to learn about money as when they grow into adults (and believe us, it happens quickly), they’ll need to be able to look after their own finances.
They need to know the basics of money management and learn that they don’t just spend, spend and more spending!
Here are some tips on teaching your teenagers to mind their money.
Start with pocket money.
Start simple as most teenagers don’t get jobs until they are 16 years old (or older) and giving your teenager pocket money gives them an opportunity to learn about money and saving from a young age.
You may not give them too much, but they should be able to save for things they want or put aside a small amount each week into a savings account.
Saving is key.
Ok, most teenagers don’t want to hear that saving is important but if you can at least ask them to save some of the money they get whether it is earned or gifted. Often teenagers get money for gifts and it helps if they get used to the saving method and pop some of it into an account or a simple piggy bank that can’t be opened!
You can make your own saving rules but consider teaching your teen to put away 10%, 20% or even 50% of what they get unless they have good reason to spend it.
Write a plan or use an app.
If your teenager is working, they should adopt a money-saving plan that you can help them with, so their money isn’t being splurged every week. When it is payday get your teen into the habit of taking out money to save or let them take out what they need for the week and leave savings in their bank account.
It's all about whatever you think works best for your teenager. There are also apps available to track spending and your teenager might need to use this especially when they are earning their own money. They might find out where they are wasting money and it could be on sweets or impulse buying items that they don’t really need.
Set a budget.
As part of a plan or having an app to help track spending, make sure you help your teenager plan for their expenses each month. They should note what they need so they can make savings easier to manage.
If they need €20 per month for lunches or €50 per month for activities, then at least they know, and the rest can be saved. You want your teenager to save but you also need them to take authority over it so they can do it in the future without your interference.
Show them the best way.
The best way to teach your teenagers is by being a good example and showing them how you handle expenses. You may need to save to buy things you like, and your teenager should become aware of the reality of money and how it doesn’t grow on trees. And maybe don’t impulse buy when they are with you!