Learning the value of money comes with many challenges to some people. Many people these days struggle under overwhelming amounts of student loans and credit card debt. However, you can set your teenagers up for financial success in their own lives by teaching them the value of a dollar using these five tips.
Encourage Them to Get Jobs
The only way for teens to learn how much money is worth is for them to see how long it takes to earn a dollar. When they can tie the price of something they want to buy with the number of hours it would take them to earn enough to buy it, they may be less apt to want to spend that much money. Plus, they will realize that money is not easy to come by and that it requires plenty of hard work to earn.
Open a Savings Account
Once teens are earning some money of their own or are receiving an allowance, they should be taught to save a percentage of this. It is usually best to teach teens to save 50 percent of the money that they have. Learning to save for something that they want will teach teens delayed gratification.
Teach Them that Used is the Best
Many teens these days believe that everything must be new to be good. However, once they understand how much work goes into earning a certain amount of money, they may become more understanding of purchasing cheaper items, such as used items. Many stores sell used clothing. Used automobiles and used vehicle parts can also be smart buys.
Say “No” to Credit Cards
It should go without saying that teens should not be allowed to have credit cards. Credit cards make it too easy to spend more than one should without any thought for the cost of items. Instead, teens should be taught to pay with cash or possibly a debit card that is tied directly to a checking account.
Walk Them through the Family Budget
Teaching teens to think like adults is easier when you walk them through what you do with your family’s money. Sit your teen down with you for a few months in a row and show them your budget. They will quickly see how much such things as insurance, groceries and utilities cost.
Teens are faced with many financial challenges and temptations these days nearly everywhere they go. From high-end technology that changes every year to designer clothing that they feel peer pressure to buy, there are plenty of places for them to spend their hard-earned money or their allowances. By teaching them how to manage their money now and understand the value of a dollar, you can save them from years of financial misery.