Teens & money
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Teens & money go hand in hand (often out the door to go buy something) but teaching teens about money is usually more a byproduct of our everyday lives than something we set out to do. I’d like to change that with my son, so I’m developing a list of things that I want him to be able to do before he graduates from high school. Here are the objectives I have so far:
Daily money management
- Write out a plausible spending plan
- Use a spending plan responsibly
- Balance a checkbook both on paper and using Quicken
- Open and use a checking account responsibly
- Use a debit card responsibly
- Understand that just because the bank lets you take out money or buy something, that it doesn’t mean you have the money to do so
- Understand the fees and penalties involved in misusing a checking account
- Access and use an online savings account responsibly
- Set up regular savings plans for long-term savings (which is how I usually think of my emergency fund) and specific goals (college, car, whatever strikes his fancy)
- Pay regular bills on time and in full
Miscellaneous
- Understand the benefits and advantages of credit unions
- Understand the dangers of using credit cards improperly
- Learn to use a credit card responsibly
- Get a copy of credit reports annually
- Be able to calculate interest rates & look for “gotchas” in fine print
- Understand the relationship between driving safely and having lower insurance rates (and more money for fun things instead of tickets)
- Complete a 1040EZ, and review a 1040 form.
Retirement
- Explain why saving for retirement is a priority
- Explain what Roth and Traditional IRAs are, and under what circumstance the money in them should be used
- Explain why it is a very bad idea in most instances to take money out of retirement accounts early
- Have opened and contributed money to a Roth IRA and 401(k) account (if applicable)
I’ll add to the list as I think of more, but for now I think it’s a good start.
August 29th, 2007 at 3:22 pm
Great list! I have recently acquired a debit card for my 16 year old sister…that was her birthday present! I used to work at the credit union. I have full access to the account so I can see balances. It makes me nervous, but my parents would not do it for her, but I figure that she needs to learn somehow! She puts 10% of her check in savings and she is allowed the other for spending, we showed her how to manage a register and everything. I did not think to install Quicken on her computer, what a great idea!!!
August 30th, 2007 at 12:07 pm
I wish someone had taught me these things as a teen. My kids are little, but we already talk to them about saving money, making choices about what we spend money on and (my personal favorite)how HARD Mom and Dad work for the money we spend!