Raising a Financially Responsible Teen

Many parents struggle with knowing when, and how, to begin teaching their teens financial skills. While your teenager may learn some financial literacy in the high school classroom, the bulk of the work falls on you, the parent. Here are some tips for teaching your teenager financial skills that can help them move toward financial independence sooner, rather than later. 

1) Teach Budgeting Skills

Like most parents, you probably give your child an allowance. But do you know where that money goes? Is there conversation about what your teenager is spending their money on, and why? Consider creating a “money list” with your teen where you help them calculate expenses, set a budget, and devise a plan for tracking spending. This process will undoubtedly involve some trial and error, but will help your adolescent build a relationship to money that’s thoughtful, and responsible. 

2) Help Your Teen Find A Job

Parents often harp on their teenagers to “get a job,” but getting a job isn’t as easy as it once was. While plenty of jobs exist for teenagers, teens need to know how to create resumes, search for jobs online, network, apply for jobs, interview, and conduct themselves professionally via phone and email. These skills are rarely taught in schools! You can help your teenager land a job by teaching them these skills, rather than assuming they know how to land a job on their own. If you don’t think your teenager would listen to your advice, connect them with another adult who could help them refine their job-seeking skills. If your kid is too young to search for traditional jobs, consider creating jobs for them around the house, finding volunteer opportunities that can bolster their resume, or connecting them with other adults who can hire them for odd jobs. 

3) Help Your Teenager Establish Credit

Instead of getting your teen a debit card, consider helping your teen find a credit card with a small credit limit, so that they can begin building credit. Ideally, this would happen once they have a job and are earning income. Learning to pay bills is an invaluable skill, and one that will put them at a distinct advantage when it’s time to move out of the house. 

4) Communicate!

Many parents of older teens fail to communicate the financial expectations/plans that exist beyond high school. It’s important that teens have a reasonable understanding of what their financial responsibilities will be beyond high school. If your teen is still living at home, what will they be expected to contribute? If they’re going to college, what is their understanding of how their college will be funded, and what loans they will have to repay after graduation? It’s incumbent on parents to build a financial plan with their teenagers prior to the “launching phase,” so that all parties can be clear on financial resources, and expectations

5) Model, Model, Model

Finally, be a good financial role model for your teens. As they get older, be increasingly transparent with them about how you make responsible financial decisions. A little bit of work can go a long way toward helping your adolescent establish a financial foundation that can be refined for the rest of their lives.

Sources:

1) https://www.parenttoolkit.com/financial-literacy/advice/saving-and-spending/teaching-teens-to-budget

2) https://www.thebalance.com/help-your-child-build-a-good-credit-score-960520