How to Teach Your Teen to Manage Money

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They say the apple doesn’t fall far from the tree, so make sure you’re not enabling your kids' irresponsibility by doling out the cash. If they don't learn to manage money, it may cost them their future.

Step 1: Model behavior
Model the behavior you desire. Get your house in order and discipline yourself before you curb them, so that your advice and counsel has credibility.

Step 2: Say no
Say no to your teen. Many parents lack the gumption – don’t be one of them.

Step 3: Control their spending
Help control your teen's spending by educating them about wants and needs. Allowing them to have a credit card only temporarily forestalls the conversation about responsibility.

Step 4: Use allowance
Use allowance as a tool through which they can experiment with their own money, allowing them to suffer the consequences when money is wasted. The results will be priceless.

Tip
Many financial companies offer services for monitoring your teen’s credit card account.

Step 5: Teach planning
Teach them to plan, which may include getting a part-time job to purchase desired objects.

Step 6: Help them make a budget
Help them develop a budget, teaching them to acknowledge each expenditure and to organize their basic material desires.

Step 7: Set saving goals
Set goals for a savings account aimed at future needs like college, trips, and marriage. Agree to reinforce this with small matching contributions on your part.

Tip
Teach sound investment strategies to your teen, or have someone who knows what they’re doing help.

Step 8: Allow a pre-paid card
Allow the teen to have a prepaid debit card instead of a credit card. There is no government bailout authority that will reinforce poor money management for your family.

Did You Know?
By 2008, over 91 million U.S. households had at least one credit card.

[henrythomas]

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[EdgarVega]

i wish my parents were this easy like this it takes alot of years to get what you want and i dont get an allowance

[Laura]

@bananaxmeat But is it smarter to have one or just have a checking account

[xxxarwxxx]

why would u donate your mone yas a child if its such a small amount, may sound sad but its true

[iraymond]

Do NOT have your teen buy junk food with their money !! You have to do it !! You can say no

[SixteenSkye]

LOL! I don't even get an allowance. We're not poor, we're quite well off... I just save all the money from my birthdays and Christmas. I also don't go spending my money like an idiot and buy every new shiny phone that's put infront of me.

[Sims]

you can save money by not signing your kid up for a credit card.

[kenuhawaii]

my parents dont buy me shit so i have to save me money

[JeboteSanader]

lol, wants: iphone, laptop - i have both :P

[Laura]

This isn't very helpful... It'd be easier to have a "How to manage money FOR TEENS" I don't get an allowance, I'm to young to get a job. -__-' I already knew everything they said, my only question is "Does someone HAVE to have a credit card?"

[TamiraCheatham]

@Eragon3
White Americans!?
You don't know all of them, so you can't say all of them are...
(and I'm not white) but that was a very ignorant answer!