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Teaching Your Teen About Money Management

By: Rachel Newcombe - Updated: 30 Sep 2012 | comments*Discuss
 
Money Management Managing Money Teen

If they’re going to get by well in life, then teens will benefit from being able to manage their money. Here are some tips on teaching your teen about effective money management.

One of the best ways of learning how to successfully do something is to actually gain experience from trying it out. Of course, it’s always helpful to talk to your teen about money management, and it’s definitely something to do, but they’ll probably grasp the importance more if they get to experience it themselves. If you’re prepared to let your teen loose with some money and have a go, then there are plenty of ways in which they can gain money management experience.

Let Your Teen Control Their Clothing Budget

Whether your teen is earning money or not (e.g. from working around the house or with a weekend job), you could hand over to them the responsibility to control their clothing budget for a year, rather than relying on money handouts when they need new clothes. Giving them a lump sum in one go may sound crazy, but through succeeding or failing at managing it, they will hopefully learn that management is essential.

It is possible that your teen may blow all their clothing budget cash in one go on clothes that are only suitable for the current season, then struggles through the rest of the year without money to afford other items of clothing. But through experiencing this situation they would hopefully be better equipped to realise the importance of saving money and managing it carefully, rather than letting it all slip away quickly.

Let Your Teen Do Grocery Shopping

If you’re prepared to risk the fact that you may end up with all their favourite foods, you could let your teen take on the task of doing the grocery shopping for the week or even a month. This will give them a chance to manage a budget, get a good insight into how much different types of foods cost and see how much is spent on foods for the whole family each day.

If you’re not quite so keen on letting them loose with the whole task, then you could at least let them be involved in helping you sort out the monthly food budget and help with the shopping.

Let Your Teen Help With Paying Monthly Household Bills

Teens can often be oblivious to the reality of how much everything costs, from rent and mortgage fees, to the cost of gas, water, electricity, council tax and broadband. For a first hand and insightful look at the reality of what everything really costs, you could involve your teen in helping you pay for the monthly bills.

This doesn’t mean making them shell out their own money for the bills, but let your teen see what everything really costs. Show them all the bills, involve them in the paying process or show them how you’ve got things set up to automatically pay bills via direct debit on your online banking.

You could also discuss how you choose what extras you purchase during any month and any budget techniques you use.

Money management skills will come in extremely useful for your teen if they’re going to university, as they’ll need to manage their rent, costs of buying books and social expenditure carefully. But it also be useful for anyone thinking of going straight into an apprenticeship or job, as they’ll be earning money and will benefit from proper know how about how to control their budget.

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