Things You'll Need:
- Computer
- Savings Account
- Shoe Box
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Step 1
Open a checking and savings account in your teenager's name. Once your teenager is old enough to have his own bank account, take him to the bank and set up an appointment. There is something special about sitting down in front of the banker and opening a checking and savings account. Of course you could do this online, but it is more meaningful for a teenager to visit an actual bank.
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Step 2
Deposit half of every dollar earned into the savings account. Most teenagers don't have many expenses to pay for themselves. There is no reason they cannot put half of every paycheck or allowance into a savings account. Of course, the other half should be spent as they see fit
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Step 3
Open your own savings account for college or higher education. You can open a 529 education account for your child online. Every state has some sort of a state- sponsored account that allows you to retrieve money with a discounted tax once your teenager enters college.
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Step 4
Pay the 529 plan immediately by having it automatically withdrawn from your paycheck. It is much more difficult to physically pay a 529 plan than have it automatically withdrawn. Before you know it, you won't even notice the missing money.
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Step 5
Stash a shoe box somewhere and tell no one about it. Place $5 every week into the shoe box. This money will be used in situations when you have absolutely no other money for your teenager, or you have no time to get cash from an ATM machine. Quick lunch money, money for school photos and class field trips are all examples of common situations.
