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?