As they transition out of childhood, most teens begin to see money in a whole new light. Instead of relying on weekly allowance and occasional birthday checks, many teens are landing their first summer jobs and earning money for the first time. While jobs help teens recognize the value of each dollar, it also includes the temptation to spend money too freely. Learning how to save and spend wisely benefits teens for years to come.
Earning Matters – Summer and part-time jobs provide teens with firsthand lessons about responsibility and money. If your teen is younger than 16, she can usually find informal work around the community, like babysitting. See if local laws allow younger teens to obtain work permits. After 16, most teens have a range of jobs available. Restaurants and local retail outlets are often hiring part-time employees. Look for jobs that won’t interfere with school obligations and relate to your teen’s skills and interests.
Banking Matters – When your teen receives his first paycheck, head to a local bank to set up a checking account in his name (consider listing yourself as a joint account holder). If your teen qualifies for a credit card, discuss the benefits and drawbacks, including risks of debt. Suggest paying off the credit card’s full balance each month. Maintaining his checking account and credit card gives your teen useful experience with banking matters, such as overdraft protection.
Budgeting Matters – Once your teen has his own income, he might be tempted to spend all his cash at once. Most teens lack major financial obligations such as rent, groceries or educational debt, so teens need role models. Including your teen in daily financial decisions gives him a realistic idea of adult spending, according to More Magazine. Or sit down with him and calculate how much his daily coffees or other minor purchases will total during a year.
Saving Matters – Even if your teen doesn’t have major financial obligations, she’s quickly approaching life-changing events such as attending college or purchasing her first car. Learning how to save her money at a young age benefits your teen during her entire adult life. Consider opening a savings account at your local bank, and help your teen figure out how much she’ll set aside per week or month. After several months, show her how the savings have added up.