How to Teach Your Teens Money Management
From clothing to CDs to nights out with friends, teenagers sure know how to spend money. Help your own kids develop money-management skills with these tips from financial professionals and parents:
- Don't just give your teens an allowance. Instead, teach them to earn it by working around the house. "If kids work for money, they'll learn how good working behavior can influence their earning power," says Augusta Gillian, a bookkeeper and mother of three teenagers who lives in Los Angeles.
"If they learn this at home, then it's easier for them to find jobs and hold them when they're in college and after," she says.
- Teach them how easy it is to save money. "Have them open a savings account and make it a rule that they deposit one-quarter of their allowance each week," suggests certified public accountant Marleah Solkin of Orlando, Fla.
- Make them keep an expense log on the computer or in a notebook. They'll be able to see for themselves (and show you each week) exactly where their money goes. "Charting all expenses and going over them on a weekly basis with their parents quickly teaches kids whether they're wasting money or being reasonable about spending and saving," says Dale Richards, a Seattle father of two.
- "Avoid handing out money when your kids pressure you to make impulse purchases," says David Jenkins of Nashua, N.H., who has a teenage daughter. "Your kids need to learn that you're not a walking cash machine."
- Set spending limits for your kids before they go shopping for gifts for family or friends, says Sarah Klabin, a mother of four teens from Los Angeles. "Kids are easily dazzled by expensive consumer items. They need to learn early on that the most expensive gift is not the best gift."