Parents largely complain that teenagers do not listen to them. The reverse is true when it comes to teaching about money. Teens actually welcome the advice of their parents when it comes to money; teens want to know how to have more. They don't really learn much about it from school so money especially saving money will make curious on how to go about it.
Teenagers as a group spend millions of dollars earned from part-time and summer jobs. They really need to figure out how to save more of their earnings.
Teens these days are becoming more aware of their family's source of income and financial status. They practice these money-spending principles when they venture out on their own, financially speaking.
It becomes more of a parent’s obligation to start preparing their teenage kids to use their money wisely.
Here are some ways on how you, as a parent, can teach your teens to save money:
1. Lead by example.
The children subconsciously pick up on their parent’s habits and that includes money habits. Do they see you saving money? Do they see that you respect the value of the dollar? Are you financially responsible by having money saved emergencies? Do you invest money to grow it?
Speak through your actions so children will follow your success.
2. Help your teens open a bank account.
Establishing a bank account under their own name gives them a sense of power over their money.
Sit down and teach them how to manage their own account explaining the basics of how it works.
Teach how they should save and their savings could go to their college tuition, or a big purchase like a car, or even start a business.
Doing all this will give them confidence and positive habits to save money.
Check out banks that have special benefits for teens that open their accounts at such an early age.
3. Construct a “spending plan”.
Once they hear the word "budget", teens tend to flinch at the thought of having to restrain the spending of their money.
As an alternative, you and your teenager should build a “spending plan”. The simple rephrase of the word "budget" to "spending plan" would get them excited, and think of ways on how they can wisely spend their savings.
With this "spending plan" require them list down their income and expenses, making sure there is more income than expenses, while saving the difference.
4. Make a “mock” investment in the stock market as well as teach them about both real estate and stock market.
Make them aware of the options that they have financially. Teenagers should learn how to grow their money through investing. There are lots of books on investing in the real estate market and stock market. You never know, you might have a natural financial whiz.
Once your teen understands these concepts, they’ll be able to have money on their own. And that means, they’ll stop asking for money- or at least not as much.