Before your teenage son or daughter packs up and confronts the real world on their own, make sure you teach them some important financial lessons. Knowing a little when it comes to their personal finances will help them in bucket loads, and prevent them from falling into any financial trouble in the future.
If you’re wondering just what lessons will benefit your children in their financial future, read on. Here are 5 of the most important.
1. Stay away from credit cards
It’s important that you drill into your teenager to only use money they actually have. Sure, it will be tempting for them to fund that quick Bali getaway on their shiny new credit card. But the relaxation they get from the trip will pale in comparison to the financial stress they’ll find themselves in when they get home; it simply isn’t worth it.
Indeed, credit card debt is a problem found among too many teenagers. Don’t let your teenager be one of them, and make sure they know that credit cards are only to be used in emergency situations, and to pay for things they actually can afford.
2. Set a savings goal
As the often used expression goes: “if you fail to plan, you plan to fail”. Make sure your teenager has specific savings goals that they’re working towards each year. And then make sure they’re putting money aside each week. It really doesn’t matter how much it is. What matters is consistency, and developing good saving habits.
3. Shop smart
Teach your teenagers the art of shopping around and bargaining, and you’ll have taught them a fine financial lesson that will pay dividends for time to come. Sit with them and help them with their research to find the best deals on big ticket items.
This includes shopping around both online and offline. Don’t forget to teach them how to bargain. This doesn’t mean teaching them how to be rude to shopkeepers and consultants on the phone. Show them how to bargain whilst still being polite and friendly. You’ll often find your bargaining powers to be more effective this way anyway.
4. If you want it, earn it
It’s understandable that you want you teenager to have as comfortable a life as possible. But giving them what they want – without making them work for it – won’t do them any favors. Make sure you instill in your teenage boy or girl that they need to go after what they want.
This means getting a job and working for that new car, holiday, or guitar themselves. Not only will it teach them about personal responsibility and the value of hard work, it will also do wonders for their confidence as they realize that they can achieve whatever it is they want with a little effort.
5. Don’t bail them out
Related to the above point, it’s also vital that you don’t bail your son or daughter out when they find themselves in a bit of financial trouble. This doesn’t mean completely abandoning them, but simply means that you should avoid giving them the easy option and paying for whatever mess they find themselves in.
By all means, give them the emotional support they need. But keep your wallet in your pants or jacket. You may think you’re helping them, but in the long run you’ll harm their sense of confidence as they won’t be able to come out the other end all by themselves.
It’s important that your teenage children know the basics of managing their personal finances. Do them a favor and make sure they don’t leave home without knowing the above. No doubt you’ll be a proud parent for years to come.