Teens and Money: What You Should be Teaching Them
April 3, 2017
Teens and money go hand in hand
Ahhh, teens and money management. It’s tricky. 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 his graduation. Here are my plans so far…
Daily money management for teens and money
- Write out a plausible spending plan.
- Use a spending plan responsibly.
- 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 abusing 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 they may want).
- Pay regular bills on time and in full.
Miscellaneous financial lessons for teens
- 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 (get a totally FREE copy of all 3 credit reports here – this is the only site authorized by federal law to issue free reports)
- Be able to calculate interest rates and examine fine print.
- Understand the relationship between driving safely and having lower insurance rates (and more money for fun things instead of tickets).
- Complete a basic tax form, and review it. Click here for step-by-step guide they can follow with little guidance from you.
Retirement lessons for teens (yes teens and money and retirement!)
- Explain why saving for retirement is a priority.
- Explain what traditional individual retirement accounts are and under what circumstance the money in them should be used.
- Explain why it is a very bad idea in most cases to take money out of retirement accounts early.
- Encourage them to open a retirement fund before graduation.
Teens and money… a tricky subject to say the least. But it’s so important! I’ll add to this list as I think of more, but for now I think it’s a good start.
How do you help your teens handle money? Is there anything I left out?
–Will
I got my kids started w/ money ASAP. They are in college now and doing pretty darn well if I do say so myself. Good post, Will.