Hopefully, you started teaching your children about money once they started attending kindergarten. It’s easy to get started at a young age when they like playing imaginary games and you can play shop with them. However, you shouldn’t allow this to be the only lesson they get.
It’s important to revisit the money lessons when your kids reach teenage status. As teenagers, they start getting their first jobs, setting up their first bank accounts, and soon they’ll be heading off to college. At that point, they’ll have their own checking accounts and maybe even their own credit cards.
The Allure Of Credit Cards
Credit cards are an important place to start discussions when it comes to money and teenagers. At such a young age teens might not really understand the concept of a credit card. You need to make sure that they understand that that’s not free money, that they will have to pay it back, and that the longer they take to pay back the more they’ll be paying back.
Without any credit, it can sometimes be hard to get a first credit card but it’s not impossible. You need to make sure that you teach your children about interest rates, and how they add up to more and more depending on how much they’ve spent on their credit card, and also about how not paying off their credit card and letting it go to collections can severely damage their credit.
Having Bills To Pay
A good way to teach your teenager about paying bills is to give them some type of bill that they need to pay. These days kids have cell phones at a very young age, you may want to have your teenager start paying their own cell phone bill once they start working. Even if they’re only working part-time they should be able to afford the cost of a monthly phone bill.
College And Spending
College isn’t free, and unless you’ve been saving up since your child was born, you may have to have them do some work to help pay for their college tuition. Make sure that you’re teaching your teenager how to budget smart when it comes to college spending. They need to understand that not only do they have classes that they have to pay for, but they may also have housing they need to pay for and those college textbooks aren’t free either.
What Are Wants And Needs
This is also a good time to start teaching them the differences between wants and needs. As a young child, you probably bought your kid lots of stuffed toys, which are wants. As they get older they may see this as just a regular part of life, getting whatever they want, but once they start spending their own money they’re going to realize that a lot of money is wasted on junk like toys. Teaching them the importance of food, clothing on their backs, and the expenses of traveling where they need to go will help them learn to decipher between wants and needs.
You also want to teach them that they need to pay their bills first before they go to the movies or buy a new CD. They will learn that sometimes you have to sacrifice the things you want in order to keep a roof over your head or to keep food on the table.
