It is smart and wise to teach teens about money. If you let your teen get a savings account to start to save money at an early age then it will encourage them to make good decisions money wise. It is important to teach teens how to save money and teach them the difference between good debt and bad debt. A savings account will also teach your teen the importance of saving money. They will have fun watching the balance grow each time they put in more money to the savings account.
Teens can learn at a early age how much they can afford to buy. They will understand the difference between expensive clothes and reasonable priced clothes. It is important for them to understand how to buy the most items possible with their money at a early age. It will help them realize that it isn’t worth it to waste money on expensive stuff that they don’t really need. Teens who learn how to manage and save money when they are young will most likely grow up being a responsible adult money wise. They probably will have not much debt due to learning how to properly manage money in the beginning. Here are five tips for teaching teens about money.
1. Open up a savings account for the teen. This will give him or her a excellent start in being able to start to save money. Savings accounts are often free with no monthly fees for a teen since they are a minor child. After a few years or more of saving money during the summers then he or she might have a enough money to buy a cheap car when he or she gets their drivers license. The goal of saving money for a car might encourage them to save even more money.
2. Show them how to manage money in their savings account. Have them write down on a piece of paper how much money they put in the savings account and minus any money that they took out from the savings account. This will help teach them the skills on how to manage a checking account in the future too.
3. Teach them the importance of goals. Have the teen write down a list of any certain items or special gifts that they would like to buy with their money and set a reasonable date for the goal to be accomplished by. This will help them feel better about saving money since they will have something to work toward. This will help them feel like they have accomplished something with their money by setting goals and accomplishing it.
4. Help the teen to figure out how much more that he or she would need in order to accomplish a certain goal. In order to do this you need to figure out how much money that need to put into their savings account each month in order to meet the goal. This is a learning experience for the teen since it is most likely their first savings account. You can write how much money that would need to save each month and then figure out how long it take for them to earn that amount of money.
5. Once he or she has mastered the process of being able to manage a savings account then when the teen gets a little older then you could open up a checking account for the teen. Most banks allow minors to open a checking account as long as an adult is also a signer on the checking account. A checking account will probably make the teen feel more grown up since it is more responsibility and a big step in preparing to be an adult person.
