For many teenagers, the hardest thing about earning money is learning to manage it wisely. Until they had their own money, Mom and Dad were their own private bank. Money appeared like magic whenever they asked, as long as the request was reasonable.
Now that they have their own payday, they tend to want to hold on to their earnings. To save, you ask? Not necessarily! Chances are they’d rather squirrel it away for that next trip to the mall with their friends. And then there might just be nothing left until the next payday.
Of course you want a money-savvy teen, so this is the time to provide some money-handling guidelines – especially ones that will instill a lifetime habit of saving a part of what they earn. Let’s get started, with the basics:
Hopefully, your youngster established a habit of saving early on, as a member of a formal savings plan like our Green TeamTM Kids Club. Now that they’ve graduated from the Green Team, it’s time for a regular savings account that will encourage them to save but still have access to their money when they really need it. Just seeing their savings add up can be an incentive to save even more, especially if they are working toward a major purchase goal.
Having their own checking account is a really big deal for teens, and the use of a debit card is a good money management tool. A checking account can also introduce your teen to online banking for keeping a close eye on account balances — the best way to avoid costly overdraft fees. Personal checking accounts can provide the foundation for a lifelong skill teens are certainly going to need. Teens age 18 or over can open a personal checking account at most banks, and also take advantage of a related convenience services for practical money management.
Teaching your youngster how to handle credit is a great idea, but you’ll want to make sure that first credit card experience isn’t a disaster. No matter what your age, credit card debt can be debilitating! Here are 5 ways to teach kids about plastic.
What was your first “real” job, and what did it teach you about money?