Today I wanted to share some tips we’ve learned so far about teens and money. Let’s get started…
WAYS TO EARN MONEY
Our daughter is 14 years old and here are some ways she earns money: babysitting, pet sitting, and recycling cans and bottles. Her grandparents also reward her for good grades. In some areas, 14 year olds can get a job as a grocery bagger or ice cream scooper. Other ways they can make money is to offer help to your neighbors like being a mommy helper, rake leaves, mow lawns, housesit etc.
Our tip is to talk to your teen to find out what he/she likes. Teach them how to research jobs in your area. Encourage them to turn their hobby into a business. Keep it fun and let them make decisions on what kind of job they want.
As a teen the concept of savings may seem boring. Who doesn’t want to go to the mall and buy the latest and greatest at that age?
Here’s what we do with our daughter…
We encourage our daughter to save at least half of everything she earns. I’ll be honest, I was a bit pushy about this in the beginning and a lot of that stemmed from fear. Fear of our daughter going into debt and not having enough savings for the future. However, parenting from fear isn’t healthy. All you can do is teach them what you know. Teach them the importance of savings. Explain that money gives you options and freedom. This may be a great time to explain assets, liabilities, and investments.
In the end, all you can do is give them information so they can make an informed decision. Allow them to make their own decisions and if ever they go against your recommendations and find themselves in a predicament, do not bail them out so easily. Allow them to feel the repercussions of their choices.
CHECKING AND SAVINGS ACCOUNT
When our daughter turned 12, we opened up a checking account for her. She received a debit card and we taught her how to use it and keep it safe. Many financial institutions have custodial accounts that you can open for your child. We love Capital One and Navy Federal.
If you want to take your teens savings to another level, you can open up a Roth IRA for them with Fidelity. There are some requirements for this so head over to fidelity and do some research.
WHEN YOUR TEEN WANTS A CAR
There are so many ways to tackle this when time comes. For us, we have mulitple cars and decided to “sell” one of them to our daughter. I say “sell” because that money is going back into a savings account that we have built for her (but she doesn’t know that).
Our daughter has her $1000 emergency fund already which was a requirement from us prior to her purchasing our car.
We discussed the basics of maintaining a car such as the cost of gas, tickets, maintenance routines etc. She will be in charge of all of that. We believe that when teens have skin in the game they appreciate and take care of their things a lot better. Some may not agree with our method, but we feel this is a great opportunity to learn responsibility.
WORDS OF WISDOM FROM OUR TEEN
DO teach about the value of money
DO NOT suck the fun our of it
DO monitor purchases if needed
DO NOT micromanage or make them feel guilty for spending
Hope this inspires you to teach your teens about financial responsibility.