If you’ve not taught your teenager about money, there’s a good chance he’s picked up some bad habits already. Start instilling financial responsibility now.
Financial Responsibility in Teens
Children are brought up in different backgrounds— some from richy rich parents who cannot appreciate the value of money and some from families who calculate expenses at every step.
The teenager of today do not have the idea of making a budget and know any method to save money as soon as they start their first job.
How to inculcate financial responsibility in teens?
A goal must be set in the very beginning to put in savings account or put in mutual funds and keep calculating the returns that can be expected in future. A teenager gets a double incentive when this goal is combined with a goal used for some large purchase like down payment of a car or some deposit for a new house.
The teenager must be taught the value of making a budget and sticking to it. The general urge in the youngsters today is to buy first and face problems later, or leave it to the parents to solve them.
The habit of saving on small items now and not facing a crisis later will help the teenagers in the long run.
The discussion on the monetary status of the family and the earning prospects of the teenagers should be done openly and honestly. This will help the child to start planning of his finances early.
An earning teenager should be made responsibility of direct debit of his personal expenditures like mobile, internet, car insurance, petrol cost and insurance payments. This will create awareness of the monthly expenditure along with the amount in hand.
The teenager should be familiar all the different accounts in the bank. It is advisable that the current account is the best for students and young adults who have not earning.
The teenagers need to have access to ATM in order to manage the amount of money taken out and the glance at what is the balance left in the bank.
The pre-paid credit cards are convenient as no cash is handled but at times may lead to debt if the payments are not done in time. Awareness and knowledge of credit score and credit history and its implications should be explained to the teenagers once they possess a credit card.
It is the job of the parents and the finance industry to create the feeling of financial responsibility in teens.