Note From Wil: This is a guest post from Kelly Austin, a writer with www.highersalery.com. Much of what Miss Austin writes today should sound familiar to many readers. Much of her advice today can also be found in various articles right here on F4Y:TB. I include her take for those newer readers who might not have read some of those older posts.
I like to include the writings and opinions of as many people as I can. If you want to contribute to Finance For Youth: The Blog, send me an email:
[email protected].
Personal finance is one subject that does not get enough attention in the education system, so it is up to parents to raise financially literate children. Here are five actions that you can do to help teach your teenager about personal finance.
Get a job: Encourage your teen to find a part-time job so that he learns the value of work and develops a good work habit. Giving allowances is okay, but adults have to work for their money; no one just gives money to them. Help your teen look for a paper route, babysitting job or a job at the local fast food joint. Working ten to fifteen hours a week while in high school will help them learn to prioritize their time and earn money for their spending and savings needs.
(Note from Wil: I talk about this very topic HERE!)
Open a Checking Account: Your teen probably has a savings account but it’s good to get him a checking account so he can deposit and use his hard-earned cash. You can get your name put on the account so that you can oversee his transactions. Let him get a debit card and teach him to balance his account regularly. Even if he messes up and gets an overdraft charge, it’s better to do it now than to rack up thousands in credit card charges and fees as an adult.
(Note from Wil: I talk about this very topic HERE!)
Make A Budget: Once your teen has a job, show him how to make a balanced budget. The expenses must equal (or at least less than) the income otherwise he’ll go into debt. Allocate extra money to savings goals. If your teen doesn’t have a job, you might consider giving him a lump sum of money equal to what you usually give him annually (or quarterly) for his clothing and entertainment expenses. Then it’s up to him to spend it appropriately. Do not bail him out if he wastes it. The best thing you can do is to give him some household chores so he can earn some money.
(Note from Wil: I talk about this very topic HERE!)
Read A Good Personal Finance Book: There are a few great books that teach personal finance and are enjoyable for teens. Consider giving your teen a copy of Dave Ramsey‘s Total Money Makeover or Your Money or Your Life by Vicki Robin and Joe Dominguez. I Will Teach You To Be Rich by Ramit Sethi is also great for teens as it was written when he was just out of college and has a writing style that appeals to a younger audience.
(Note from Wil: I personally don’t agree that all of these books or authors are great, but that’s my opinion. For a F4Y friendly book, You can always go with THIS ONE!)
Set Short and Long Term Financial Goals: Your teen will likely have a long list of needs and wants. Help him to prioritize them and set short and long-term savings goals. Short term goals might be saving for a concert, buying a car or new computer. Long term goals will likely be college, an apartment or car upgrade.
(Note from Wil: This is the name of the game! I talk about this everywhere online and in Finance For Youth: The Book!)
This guest article was contributed by Kelly Austin from www.highersalary.com. Visit her site for information about salary and benefit information for many popular careers.
