I know they look awkward, but your teen is capable of so much more than you are probably giving them credit for. They need to learn how to be fiscally responsible, and if you don’t teach them the banks and credit card companies will. They’re going to learn it on the streets anyway… so shouldn’t you be the one to show them the way? One thing you can teach them is how to use a checkbook, because they aren’t teaching it in school anymore that’s for sure!
Living In Your Means
Having a checking account gives your teenager an opportunity to learn how to only spend within their means. It’s not your money anymore it’s their money and that one word can make all the difference in the world when it comes to staying within boundaries.
Use this discipline as an opportunity as well to teach them about thinking long term and how it’s important not to just live within their means but also below their means so they can have a financial margin to make progress towards the future. Like saving for a car!
Paying Attention Not Interest
Because they will now have their “own” money it will motivate them to pay close attention to how they are using it. Because they have to choose to live within their means, they can quickly develop an appreciation for how much things cost.
Being fiscally responsible with their everyday money is also going to protect them from getting into debt and paying interest on their purchases. As a teenager this is crucial to learn early in life. After all, credit is simply other people’s money that is borrowed because there isn’t enough of their own. It’s often due to overspending.
Through properly managing a check register they will learn how to be neat and organized with their records. Also, they’ll learn management and consistency by having to reconcile it every month.
Teach them how to operate their money as if they were working for Me Incorporated. Would they be spending it the way they’ve been if they were working for themselves?
Help them craft habits they can use for the rest of their lives.
What do you wish your parents had taught you?
In addition to helping them set up their first checking account ask yourself what did your parents not teach you about money that you wish they did? Would it have been helpful to sit in on a budget meeting? How about having them see the process of purchasing a car? Would it have been helpful to show them how much bills are?
The list keeps going. The bottom line is the kids are hungry. At the end of the day, you are the parent and the best way for your teenager to learn is from you.
Question: What are you teaching your teenager about money or know you should? Share your thoughts in the comments below.