It’s always exciting to get to welcome a new Guest Blogger to our platform. Let’s welcome Kathy Manson to The Life You Can Afford to Live! Kathy has an extensive resume and bodies of work within Financial Planning and Money Management. You can view her latest endeavors at Catalina Structured Funding. I feel certain that we will see her back here again soon. However, for now learn from her wisdom on this important subject around Money Management and your Teen!
– Todd Burkhalter and our team at The Life You Can Afford to Live
The last thing on your teenager’s mind might be money and budgeting but prioritizing these lessons at this age might be one of the most important undertakings you can do as a parent. While there are certain online sites that provide tools, we believe some good old fashion techniques are a better way to lay the groundwork. Below are 4 tools to help you get the conversation going (if you can get them to look up from their phone):
Budgeting and More Budgeting. Maybe the best way to start teaching your teenager about money is to give them some to control. While some parents provide a monthly allowance, we believe that weekly increments help reinforce the principles on a more consistent and regular basis. By doing the allowance weekly, the teenager is giving the opportunity to “save up” for a larger purchase and understand the ramifications of spur of the moment purchases.
Teach them the Concept of Sales
While for adults shopping for the best price or waiting for an item to go on sale is second nature, the concept of delayed gratification is an additional benefit of showing a teenager to wait to an item they want is discounted. It also begins to show a teenager that is focused on consumption how finding items at a reduced price may allow them to get more things they desire.
Projecting What They Need
Too often at teenager sees something and then “needs” to have it. We suggest having your child come up with a list of items they will need for the upcoming semester or seasons. While it is a new backpack, a pair of sneakers or the hottest new jeans on the market, the teenager will learn to respect money more if they independently establish a “wish list” for the near future and then you sit down and distinguish necessities from luxuries. While we are not suggesting every purchase needs to be a necessity, we do think it prudent to make a teenager to set priorities on the non-essentials. In time this proves a valuable tool instead of a discussion every time the teenager walks into a store and sees an item he or she desires.
Earn The Money
Whether it is on top of a basic allowance or not, and whether it simply being paid to do additional chores around the house, making the teenager earn the money instead of it being given to him or her, is maybe the most basic and powerful took in teaching the “value of the dollar”.
With all the lessons that need to be instilled by parents, and there are countless important ones, understanding and appreciating money should be near the top of the list.
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