How to Teach Teens to Budget Money

Video Transcript

"Hello, have you ever wondered how to get your teen to use a budget with their money. It's a problem with many parents. I'm Dr. Felicia, and I like to share a few tips with you. Obviously the earlier you start with a child with having their own savings account, it teaches them that responsibility of saving. In the old days we use to have the banks actually come to the school, they don't do that anymore, so it's up to the parent to take the child to the bank and perhaps show them how to set up a savings account, that's number one. The other things you can do for instance, is set up a weekly or monthly budget for allowance for chores that they do. It's important that they realize that they have to earn this money to start their budget. And then out of that monies that you give them, allow them to have a certain budget for entertainment, and play, or something that they very much want. And then the other thing that you can do if your teen is working, is certainly help them prepare a budget for their salary. When their pay comes in, help them allocate which ways it's going, whether it's spending, savings, or clothing, etc. And certainly, finally, when you do take your child shopping, you don't want to give them an open budget. You actually want to set a limit, they have X number of dollars to spend on their clothing for school, and it's up to them to pick the items that's going to fall within that budget. Once they go over that budget, it stops and there's no more recourse until they earned and save that money again. Now this sounds like a lot of work, it is, but that attention that you give your child early on is very important. Also don't forget, you set the mode by example. So if you're sitting working on your own budget, putting your own limitations on, showing the child how it's done every month, or however you make your bills, the child is going to pick up those same hints. So your teen actually learns more by your modeling behavior, than what you say, so what you do is very important. Along those lines, be sure to check your child's bank balance, show them how to write checks out, that's very important. Show them how to make their deposits, if necessary, withdrawal. And if they do run into a jam, don't be so ready to help them out. Make sure that if they over spend, that you give them the conscience of having to earn that money back through future allowances, or future pays. With that in mind, I think you'll certainly find a stronger teen that's more prepared to deal with adult life. Because don't forget, when they reach age 18, and they're out in college, or they're out in the work place, you have no more say about how they handle things, technically. So you want to make sure that they're already prepared. It's your job to get them ready for that adulthood. So do that, start early, have a budget, including how they handle their allowance, and as the older they get, you give them more responsibility to terms of handling their money. If necessary, you keep a savings account for them, and save it for them. But make sure that they're part of the activity, and that they take an active part in it. That's how you make them independent, and strong in making a budget. Thank you, and good luck. Again, this is Dr. Felicia, signing off. God bless."