As your children get older, it becomes highly likely that they’ll ask for increasingly large amounts of money. To help them learn plenty of financial planning tips, it is advisable to train them in this area as soon as possible. In this way, you can keep them happy, teach them a few things and still have enough cash for insurance, shopping, rent and other matters. Just remember that this is only a short list which can be expanded with a bit of creativity and imagination.
Set a Monthly Budget
One of the easiest ways to teach any teen about the value of money is giving them a pre-specified amount to use each month. Leave it up to them to budget on their own. This will give them the skills they need to cover utility bills, accident insurance and more when older. If they run out of money before the month is through, remember to stand firm and say no. This is the only way they’ll learn this valuable financial skill.
Reward Voluntary Savings
Encouraging savings is also recommended in the teenage years. Tell your children that you’ll match anything that they put away. In this way, they’ll have double the cash in their bank account! You’ll need to set limits on when they can make a withdrawal though, especially since it can be very tempting to just spend that cash immediately. Get them to put away a fraction of any monetary gifts they receive as well so their bank balance can grow each year.
Get Them to Research
If you have anything financial to take care of, now can be a good time to involve your teenage kid. Let’s say that you’re seeking armed forces car insurance. Get your child to do the research by themselves, comparing premiums, conditions and extras to find the best coverage for the family. In this way, they learn how to make the most out of their money by doing the necessary amount of research before buying anything expensive in the future.
While all of the above techniques work well, nothing is quite as effective as your child actually working for a living to make them realise how valuable money is. By pushing your son or daughter to get a job, whether in an insurance agency or supermarket, they can then equate the amount they’re spending with the time they have to work for that cash. This then gives them a very real sense of what money is worth in both financial and hourly terms.
Warn Them of Any Dangers
Of course, financial planning doesn’t come without its risks. Mostly importantly, you let your teenage son or daughter know about identity fraud and how to protect their private information. This will carry over later on in life when they can then pay off the credit cards and insurance premiums without worrying about someone stealing their hard-earned money. By warning them about the potential risks now, you give them less chance of falling victim to financial crimes in the future.