Since our adult spending and budgeting habits and strategies stem from those money budgeting experiences that we encounter during our teen and childhood years, it is vital to a healthy financial future to begin teaching your child how to manage their money at an early age. To help you help your child here are some tips that you can implement towards helping your teen learn to budget and manage their money.
Have a Monthly Family Budget Meeting
This is a good strategy for anyone with school age children or teens at home. Having a monthly family budget meeting allows your children to see exactly where the household income is being spent so that they can have a better understanding of what daily expenses such as rent, utilities, phones, groceries, and cars cost.
A monthly family budget meeting also provides an open line of communication for your kids to ask questions, suggest ideas, and feel part of the family planning process. This is a good time for upcoming expenses like vacations to be discussed as well so that everyone is on the same page as to where cutbacks will need to be made in order to afford the expense or updates as to how close the family is to reaching the savings goal for this specific expense.
Family budget meetings are also when items like upcoming field trips, school expenses, and other out of the ordinary expenses should be brought up to allow these expenses to be figured into the budget with time to save toward them. This teaches your child or teen to plan ahead for events and annual expenses.
Set-up a Joint Student Checking Account
Many banks offer student checking and savings accounts that can be jointly managed by the teen and the parents. This kind of account teaches your child that there must be money in the bank to cover the check. It is too easy for children to watch their parents use their debit card, or checkbook without having a full understanding that there must be funds in the bank to cover those charges.
Having a joint checking account with your teen that is used for expenses such as school supplies, school lunches, and other agreed upon budgeted items allows you to monitor your teens spending habits and guide them in the right direction when you see them veering off course. It also gives your teen the opportunity to learn to write checks, balance a checkbook and have a better understanding of where their money is going. Think of it as a checking account with training wheels for your teen.
Ideally, you want your teen to be contributing funds to the account so that they can comprehend how much work and effort it takes to keep the account funded. This puts more perspective on how much easier it is to spend money than to save it; while also teaching them that they cannot always just go out and buy what they want, they sometimes have to save for what they want to buy.
Teaching your children early how to manage their money and budget for the things that they want is the best way to assuring your child will be financially stable as an adult. Implementing simple strategies such as family budget meetings, and joint accounts provide you with a way to teach, guide and monitor your child’s money spending habits as you lead them on their way to financial independence.