How to Teach Your Teen to Save Money

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By Flip-n-Out
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Teach Your Teen to Save Money

One of the most important skills you can teach your teenager is how to save money. If you can help your teen develop this skill they will have a more mature approach to money and are much less likely to get into credit card debt.

Difficulty: Easy

Instructions

Things You'll Need:

A teenager
Patience

Step 1

-= Money Sources =-

Hopefully you have been talking with your child through his/her life about the value of saving money. This is a difficult concept for a kid because we live in a very materialistic country at a materialistic time. Money comes primarily from gifts, chores and jobs.
Step 2

-= Seeing the Value =-

If a teenager understands the value of money they are more likely to save. This really hits home to them when they work hard for it. Especially at a real job. If a teen is just given money they can't make the value connection.
Step 3

-= Setting Goals =-

When your teen gets his/her first job talk about saving. Explain that there is going to be a real temptation to spend almost everything they earn. Explain that saving money is about setting goals. Help them to think about a long-term goal like buying a car, going to school, moving out of the house. Tie these goals with the need to have saved money. However, you don't want them thinking of saving money as a finite event. Even if they spend saved money on something they picked as a goal, they should continue to save.
Step 4

-= Pay Yourself First =-

This is a concept that has worked very well for our teen. We reminded him that he works hard for his money and that he needs to "pay himself first." What that means is that he is to take some of his money and put it into savings. It should not be an insignificant amount either. Our teen puts 50% of his check into savings and the other 50% into a checking account.
Step 5

-= Help Keep Track =-

One thing we found to be helpful is to take your teen to the bank and set-up a checking account that you also have access to. There's nothing wrong with keeping an eye on things. Eventually you will find that you don't need to.