Teaching teens to set their own budget is a great way to show them how to get what they want in life. It’s important to teach them that making a budget doesn’t mean they have to be deprived of the things they want.
Why start now?
- You know your kids’ spending habits better than anyone else — including them.
- Teens need to know there are consequences for poor spending habits. Better now than later when it could lead to serious debt or a bad credit score.
- Their sphere of influence widens immensely once in college, and parental influence tends to decrease.
Jessica Pigg from Guardian Credit Union, offered me some wonderful suggestions for balancing necessary expenses with “fun money” and saving for the future:
- “Out-of-sight, out-of-mind” saving: Open a savings account for your teens and have them deposit a set amount of each paycheck or allowance so it builds up for their future.
Set an amount you’re comfortable with and stick with it.
Credit Unions and banks offer different teen savings accounts – look for ones that can earn interest, meaning your teens’ money works for them while they save, showing them how money management pays off — literally.
- Good grades make money: Some auto insurance companies offer discounts for teens earning good grades, which means motivation for academics while saving money at the same time!
Teaching my teens to budget is not easy (especially for a mom who has a little time to put together a monthly family budget).
However, creating a budget for them, handing it over and expecting them to make it work isn’t an effective process either.
So, we are spending some time talking through some easy budget items like, “how much gas do you need each week?’ and “what do you need to get and what do you want to get?”
I found that my son valued having lunch over getting gas in his car to get home (well, once his stomach was full, the gas thing became the immediate crisis).