The
proverb “give a man a fish and you feed him
for a day. Teach him how to fish and you feed him for a lifetime” is attributed
to Chinese philosopher Lao Tzu. This same quote is true for money management
and teaching teenagers to be financially responsible.
As a mom
of a young teen and tween, the long days are dwindling and the number of years
before they are out of the house and need to be self-sufficient are quickly
approaching. I can only pray that they have been watching and listening when I
have been walking the walk about being financially savvy.
It’s
never too late to impart financial wisdom to your teenager. For my teen, I must
sound like a broken record, but my instilling these ideas in his head now will
hopefully set him up for financial success.
·
Budget – Help them have a plan for their
income. Whether they have a part-time job or they are doing odd jobs for family
members, now is a good time to plant the seed for saving for a car or other
big-ticket item. Long-term savings is a hard concept for many teens to grasp
since they live in the moment. With a little effort and putting some money
aside, they’ll start to see their savings grow.
·
Beyond
High School – What’s
next? Does your teen want to go to college or a trade school? It’s important to
open the lines of communication now and for them to understand their financial
responsibilities. Have your teen research what their degree or trade will pay
once they graduate from college or complete their apprenticeship program. This
will help them understand how much debt they may want to take on in student
loans.
·
Put
it all in perspective –
My children have 529 plans (college savings plans) and know that this money is
set aside for their college education. My teen has his eyes set on college and
is watching his older cousin do his research between tuition costs at a
private college and a state school. My nephew is shocked at the cost of higher
education but that is not a reason for him not to apply to a university. There
are government or private loans and a myriad of scholarship opportunities.
·
Paycheck
Shock – All that
work and that’s all I made? Paying taxes and social security is all part of the
daily grind that all workers have the responsibility to contribute to. I
have always divided my teen’s “pay” into separate envelops one each for giving,
saving, investing, and spending to hopefully lessen the blow when he gets that
first paycheck. Even so, I’m sure it’ll still be a shock to see that money
taken out of his paycheck.
Set your
teens up for financial success, allow them to spend some of their money
using a debit card. Help them manage their money through a custodial bank
account, encourage them to enroll in a personal finance class and most
importantly keep a budget. With these tips, I’m hopeful they’ll have a healthy
relationship with money.
