FINANCIAL ADVICE FOR TEENS
Summer is here and your teen may have a part-time job. Now is the perfect time to sit down and share some financial advice with them that they can build on for years to come. Here is what we think they need to know:
Save. Most teenagers don’t have financial obligations and in turn, think that every dollar they make is “spending money”. Have your teen set an amount that will be saved, either a percentage or fixed amount, from each check. Open a savings account, if they don’t already have one, and help your teen stick to their savings goal. What they decide to save for (a car, college, etc.) may vary but the important thing is they are learning to save.
Set up a budget. Once savings have been put aside, your teen should learn to keep track of where the rest of their money is going. Have them record everything they spend in a month’s time to use as a guideline. They may be surprised at where their money goes and may want to make some adjustments in their spending habits.
Let them pay for wants. Having your teen pay for some of their “wants” helps them to understand the value of money. Maybe that $200 pair of jeans isn’t a must have when they have to spend the money they have worked hard to make.
Have them pay a bill. Having your teen contribute to a household expense teaches responsibility. The cell phone bill is a perfect example. Usually the amount it costs to have that extra phone line isn’t unreasonable and your teen can handle paying their part. Caution them not to commit to long-term contracts that will continue long after they have stopped working and returned to school.