Failure to teach your kids how to manage money, that task will be done by someone. And it is such a risk you will not want to take.
Use a clear jar to save
A clear jar gives the child the visual, which is essential. The piggy bank is right but does not offer that clear view. The clear jaw will enable the child to see as the money grows. Previously, they had a dollar bill and two cents, but currently, they have one dollar bill and three cents. Ensure you talk to them about it and make it a big deal for them to grow the money.
Show them that stuff costs money.
You have more to do than say than to say “That pack of toy bike cost $7, son” Assist them in getting a few dollars out of their jar, take the money with them to the shop and let them see you hand the money to the cashier. This natural act will be more impactful than a lecture
Show the opportunity cost
Opportunity cost is merely saying if you buy this you, then you cannot buy the other. It will help your kid understand the priority, and this state your kid able to know how to weigh decision and the possible outcomes.
Give commissions, not allowances
Ensure you don’t just hand over money to your kid for doing nothing else other than breathing. Hand them commissions according to the chores available in the house such as mowing the grass, taking out the trash. With this concept, your kids can understand that money is earned and not just given away.
Avoid impulse buys
Don’t make purchase things for your kids at impulse based on their demand. Instead of giving in to their request, make them realize that they can use their hard earned money in paying for it. If the cost of what the child desire is above $15, encourage the child to wait at least a day before purchasing it
Stress the importance of giving
As soon as they start making money, ensure you teach them about giving. Your kids can select a Church, charity or some they know to be in need to be of help too. It will make them see that giving does not just affect the receiver but also the one who gives.
Teach them about contentment
Teens are seen to spend a large portion of their time looking like the screen of their devices as they scroll through social media. Such interaction exposes them to compare themselves with others as they see the highlight reel of their friend and even total strangers. Contentment begins in the heart. Let your teen know that their savings are still running well enough to get them from point one point to another.
Assign them the responsibility of a bank account
At their teenage age, you should be able to open a simple bank account for them. It focuses on preparing them for managing a much weighty account as they get older.
Get them saving for college
You have no better time like now to get your teen into saving for college. If they plan on working a summer job, then get a more significant portion of their pay saved in the college savings account. It will make your kid feel relevant as they contribute to their future.
Educate them to steer clear of student loans
You need to spend quality time talking to your kids before your teen ever applies to college, to steer clear student loan, get them aware of the alternative out there, such as applying for scholarships, going to community college, going to an in-state university, working part-time while in school.
Educate them on the harmful effects of credit cards
Immediately your kid turns 18; they will get numerous by credit card offers—especially once they get into college. If you have not taught them the negative effect of debt and why it is a bad idea, then they will become victims. Remember, it is your responsibility to ascertain the appropriate time to teach these principles.
Get them on a simple budget
Since there is an attachment between your teen and their mobile device, get them active on a simple budgeting app. It is the proper time to get your teen in the budgeting habit—irrespective of the small quantity. They should understand the necessity of making plans for themselves while they are still in your home.
Help them search out how to make money
Teenagers are known to have enough free time, and they also want some money. So help them get a job while on one of these their breaks.
LLOYD J CAZES CPA