Money Management for Teens
Consumer debt, not including debt secured by real estate, is $2.5 trillion, which equates to $8100 for every man, woman and child in the United States. Of this debt, 36 percent is revolving debt, like credit cards, and 64 percent is debt from loans, such as car loans and student loans. Learning how to manage money at a young age can help teenagers develop good money management skills early.
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Set Up Account
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Set up an account at a local bank. Today's teens are very tech savvy. Make sure you set up an account with online access so they can see their savings account grow.
Save
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Teach teens to save a percentage of all the money they receive. Teens may receive an allowance, cash gifts, or income from a summer job. Encourage them to pay themselves first, and put part of that money in a savings account every time money is received.
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Plan
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Encourage them to save for big gifts. Money they have set aside as savings should not be touched. This is a great habit to have as adults. Immediate gratification is one reason so many consumers carry such high monthly credit card balances on their cards.
Match
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Celebrate high balances. Reward teens when they reach a certain savings goal. If they reach $5000 in savings, reward their savings with a check for 5 percent or $250 deposited into that account. Now you are working together toward high savings.
Plan
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Teach teens to shop with a shopping list and control impulsive purchases. If they are going out to buy a pair of sneakers, make sure that that is all they purchase. This teaches them self-control.
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References
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