How to teach your teens about finances
Given below are ways by which you can teach your children about finance management:
1) Teaching them the importance of budget: Creating and following a budget is one of the most effective ways to control your finances. It enables you to put a limit on your spending and instead helps you focus on paying bills and saving money. Teach your children about the importance of budget. This would help them to curb their spending and avoid debts. You can guide them to create monthly budgets by categorizing their money for different needs. For example: money for unavoidable expenses, money for avoidable expenses and money for savings.
2) Informing them about debt: Teach your teens about the perils of debt and how it is absolutely important to pay bills on time. You can make them learn about credit cards and loans and how they have to be paid off to live a peaceful and comfortable life. Make them understand that it is crucial to avoid unnecessary expenses for leading a financially stable life.
3) Discussing your financial decisions with them: Do not hesitate to include your children in financial discussions. Share with them your goals and wishes and how you’re planning to fulfill them. For instance, if you’re planning to buy a car, discuss with your children how you’re saving money for it. Further, whenever you are restricting yourself from buying something that you are fond of, inform your children about it. This will help to instill positive values in them such as the importance of saving, goal-setting and self-control.
4) Involving them in shopping: Send your teens for shopping by giving them a fixed amount of money and a shopping list. This can help to develop in them the habit to spend money within limits. If there is any cash left after shopping, you can ask them to use that money as part of their savings.
5) Learning to say ‘no’: Do not fulfill all the demands of your teens. If they make a reasonable demand, make sure you set a goal for them, achieving which they will get the money from you. This will help them set goals and targets in life, and also they will be able to enjoy the feeling of achievement upon successfully fulfilling the task that you have assigned.
These are small ways by which you can teach your children about finances. This will help them to manage their money responsibly in the future.