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Teaching Teens About Money

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With summer here, teens are ready to start a job, or maybe they’ve been working part-time during the school year and will transition to full-time. Whether this is your teen’s first year to work or they’ve been working for a few years, it’s always a good time to teach them about managing their money.

Money Matters: Making a Buck

One of the first lessons your teenager needs to learn about making money is that, when starting out, wages may be low. This can be a valuable lesson in understanding the true value of a dollar. It is important to realize that even though it may seem like they are only earning a small amount, every little bit counts.

Encourage your teen to put their best effort into any job they have, as it will help them in the future. They never know where a job may lead them.

Being Responsible: Paying the Bills

When teens are earning their own money, they must learn to be responsible for some of the things that parents may have paid in the past. For example, they will need to put gas in their vehicle to get back and forth to work, and they must maintain auto insurance, too.

Even though insurance tends to be more expensive for young drivers, that doesn’t mean they have to pay a fortune for it. They can shop around and find a reasonably priced insurance plan. Freeway Insurance is known for helping individuals find affordable insurance policies, even if their driving record isn’t perfect.

Your teen could pay for their own cell phone now that they’re working, too. If you have them on your family plan, you could charge a nominal fee, so they contribute and learn the responsibilities of paying bills. This helps them manage money better so they won’t be apt to spend it carelessly once they’re older.

How Much to Save

If your kid is like most young people, they’ll probably want to blow through their money all at once. You might be blessed with one that wants to save some of their money for the future, but most adolescents don’t think too far ahead. So, it’s up to you to “help” them save their money.

Encourage them to set a savings goal and make a game out of it! For example, they could challenge themselves to save enough for a specific item they really want or for a fun experience with friends. With a little creativity, learning valuable money management skills can be fun.

By teaching your teenager about budgeting and saving, they can see how small amounts saved regularly can add up to a significant impact over time.

Don’t Forget About Uncle Sam

If your teenager is new to the workforce, they may be surprised when they receive their first paycheck. They might have expected to receive the “full” amount, without considering tax withholdings. It’s important to help them understand that this is a normal part of working life.

The good news is that they may be eligible for a tax refund when they file their income tax return at the end of the year. You can even build excitement by explaining how they can use some of the refund to buy something cool and put a percentage into savings for their future.

Teaching your teen about money today can help them make smarter decisions tomorrow and set them up for a lifetime of financial success!

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