Money Management Tips for Teens

January 22, 2018
Helping your teens become more responsible about handling money now is a lesson that will stretch on into adulthood for them. Becoming better money managers today will give them a leg up in life.
1. Help them set goals – Make sure the goals are specific, not generalized. Then have them look at the amount of money they currently have, and money they anticipate coming in (from jobs or chores). From that, they should be able to figure out how much they need to set aside to reach their goal.

2. Make a list of needs vs. wants – Having your kids write out a list of needs and wants can help them prioritize their spending.

3. Encourage them to save – Americans in general don’t save enough. Have them set aside a portion of their money for long-range goals such as a car, college or even getting a jump on retirement.

4. Open a bank account – Give them a safe place to keep their money. At the same time, the monthly statements provide an opportunity to show them how to balance their accounts. Finally, many accounts come with debit cards. Let them use one. We are headed towards a cashless society so it’s better that they learn early how to use one responsibly.

5. Be transparent with how much things cost – The temptation is to hide how much you make and how that money gets spent in your household. Show them how your income gets divided up to pay the mortgage/rent, utility bills, auto maintenance and home and auto insurance.

6. Make your teen pay for their car insurance – If your teen also has a job or gets paid for household chores, reinforce how driving is a big responsibility by having them pay for all or a portion of their Indiana Farmers auto insurance policy.

7. Allow them to make mistakes – Some money lessons won’t stick until your kids experience the pain of making mistakes. Let them make a few small ones and learn first-hand why they should never make them again.

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