Your adolescents are growing so fast you can hardly keep up. Have you noticed how much more money you’re spending on them? Every time you turn around, they need money for something…new clothes, a school club activity, basketball shoes, a movie with friends, and the list goes on and on.
Add to these increasing costs, in a few short years your teenager will become an adult and live independently. What money management skills will they need?
Planning the Family’s Vacation
One way to begin giving your adolescents real life experience is to ask them to plan your next family vacation based on the family’s budget. You will need to walk alongside and help them create various categories, such as: gas and mileage, plane tickets, camping site or hotel costs per night, food for 3 meals a day and snacks, costs for entertainment, and souvenirs. This is an excellent strategy for teaching money management and how much things really cost. We found that our daughters really enjoyed planning our family vacation.
Savings and Checking Accounts
Hopefully, you opened a joint savings account in your children’s names when they were in preschool or elementary school. If not, make sure your teens create a savings account now. When your teenagers reach age sixteen, help them obtain a checking account. Do this earlier if they already are earning income from assorted jobs.
Many banks offer special accounts for students. It is important for young people to understand simple banking procedures. Even with ATMs, it is ideal if your son or daughter knows how to write checks and balance a checkbook before they venture into the world on their own. The saying, “How can I be out of money, I still have checks,” is a reality for many.
Credit Cards for Teens?
At the beginning of your son or daughter’s senior year in high school, consider applying for a credit card in their name with you as a co-signer. You can create a very low maximum amount on the card. Our daughters’ credit card limit was $250.00. We chose that amount because it would cover many emergency situations. It is way better to teach your young person about credit cards while still under your roof.
Unfortunately, banks appear in mass on college campuses every fall practically handing out credit cards to 18-year-olds. When these students max out their credit cards and don’t make payments, the banks go after their parents. Legally, their parents aren’t responsible, but many will pay for their child’s “mistakes.” It has become such a problem nationwide, that many colleges are not allowing banks to access their students on campus.
Now or later?
When would you like your teenager to learn about budgeting, savings, checking accounts, and credit cards? When the stakes are low and the kids are close to home or after they leave your nest with the possibility of costly lessons?