How to Teach Teenagers About Money...

Teenagers are one step away from adulthood, teaching them about money becomes very important for their future as well as to make them a responsible citizen. We should make them aware about why we should save and what is the value of money. In this post we will learn few things which can be used to make our teenage kids more aware and sensible about money. 

1. Introduce them to the magic of compound interest.

Compound interest is a magical thing! Introduce your teen to it at an early age, and they’ll get a head start on preparing for their future. The earlier your teen can get started investing, the better.

2. Learn the budgeting.

The teenage kids know basics of money so it’s the time to get them in the habit of budgeting their income—no matter how small It is. They should learn the importance of making a plan for their money while they’re still under your roof.

3. Help them figure out how to make money.

We see that our teenagers have plenty of free time like—summer vacations, winter vacations, Diwali/Christmas holidays etc. If he/she teen wants some money (I guess everyone want’s it), then help them find a job or become an entrepreneur! This will get them money and also help them learn new skills.

4. Give them the responsibility of a bank account.

By the time our kid’s a teenager, we should open a simple saving bank account. This takes money management to the next level, and will (hopefully) prepare them for managing a much heftier account when they get older.

5. Teach them the danger of credit cards.

As soon as your kid starts earning, they’ll get hounded by credit card offers. We should tell them the dangers of credit card and why debt is a bad idea, or else they’ll become yet another credit card victim.

6. Teach them contentment.

Your teenage kids probably spends a good chunk of time on mobile as they scroll through social media. And whenever they’re online, they’re seeing the highlight reel of their friends, family and even total strangers! It’s the quickest way to bring on the comparison trap. You may hear things like:

“Dad, Sachin’s parents bought a brand-new Honda City Car! How come we are still driving this old Maruti?”

“Mom, my friend at school got to spend 50,000 on her Sweet 16 party. I also want to do that on my b’day!”

Contentment starts in the heart. We need to make our kids understand that their Maruti (although not the newest car on the block) is still running well enough to get them from point A to point B. And you can still throw a memorable, milestone birthday party without spending a chunk of your retirement savings funding it!

 

Teaching your teenage kids about money is little challenging and going to take time on your part. But if you want to make them responsible adults and want them to know how to successfully manage their money when they get older, taking the time now will be worth it.

And yes, one of the best ways to teach your kids about handling money is to give them a chance to make some of their own!