Learning how to properly budget money is essential for everyone. This includes younger kids and teenagers alike. Follow these tips to help your teen save money for the future. The earlier you start, the easier it is to instill the fact that handling money the right way makes the difference between always struggling and having enough money with which to live.
Be open about your own budget
The easiest way to show your kids how important it is to maintain their budget is to be open about your own. Next time you’re paying the bills, invite the kids to go over them with you and show them how you figure out your budget each month. If you set an example of keeping your finances organized and managing your money responsibly, your kids will probably be more inclined to follow your example when it comes to their own budget. They might also begin to appreciate just how much all of those TV channels and internet cost.
Encourage them to save
When you help your children make a habit out of saving money now, it typically has a positive impact on their financial future. Take them to the bank and set up a savings account in their name, encouraging them to add money whenever they can. Even a few dollars at a time accumulates into something of which they can be proud.
You can help them split up their money each time they receive some. Encourage them to put a set percentage aside.
If you’re having a hard time getting them excited about putting money away for the future, you can always offer to match a part of their savings. For example, tell them that if they put away ten percent of the money that they get for their next birthday, you’ll contribute the same amount or more.
Play educational games
Online games can be an excellent way for your kids to get a practical example of how to manage money. For example, the classic game Lemonade Stand challenges players to manage a lemonade stand. Players purchase supplies and set prices to make as much money as they can.
Today, you can play Lemonade Stand in your browser on a number of sites online. There are loads of other games designed to teach finances, economics, and business management. A quick search engine query will put you in touch with many of them.
In our house “Hay Day,” “SIMs” and “Paradise Bay” are all popular and have had a positive educational effect when it comes to money. Evey has learned that if you want that fancy item, you have to save for it and that in order to save, you have to work hard to get the money in the first place.
Put them on a fixed budget
The best way to prepare your kids for living on a limited budget is to start limiting their allowance early. Instead of deciding whether or not to give your kids money when they ask for it, work out a bi-weekly or monthly allowance for them. This way, they learn the importance of budgeting their money firsthand, even if they have to learn the hard way.
Make sure you don’t cave in when they come to you for more money for the first few weeks. If you help them out after they spend frivolously, it doesn’t do much to encourage good financial habits.
The Question of “Rent”
This is a contentious one. If your teen has a part-time job, some people feel it is appropriate to have them pay rent, even if it a nominal amount. Some parents do not think this appropriate, but I think it gives a valuable life lesson. Teens who become used to earning their money then spending it all; however they like, have trouble adjusting when they become adults in their own home.
I have seen plenty of kids who think money is for spending on enjoyment suffer terribly when they are faced with their own household expenses and suddenly do not have ‘play’ money.
These are just a few ways to help your teens budget money. Chances are, once they get started they’ll be even more encouraged to watch their savings grow.