Before they go off to college, it is important to ensure your children have the financial savvy to make it in the world. Teach them to avoid credit card traps, save for the future and budget their money effectively using these tips.
Get a Job
By this age, your teenager should be able to get a part-time job to help support themselves. If you don't want them to work during the school week (since it might impact their grades), consider a job that allows them to work only on the weekends or only during the summer when school is out of session. Having a job will teach your children responsibility and the value of earning a dollar of their own. Additionally, when tax season comes around, you can teach them how to do their own income taxes as well. The best way to have your teenagers learn about jobs and taxes is to have them experience it first-hand.
When your teenager turns eighteen, they will likely be bombarded with credit card offers. Use this time to teach them which credit card offers are good for them and which can get them into trouble. Additionally, stress the importance of only charging what they can actually pay off at the end of the month. If they learn good habits now, then they will be able to avoid the temptation of spending money they don't have later.
As an adult, your child will have to pay bills on time and manage their budget to ensure that they don't run out of money to pay their bills. If your teenager wants a car, use this opportunity to put the car in both their name and your name. This will help them build credit and take responsibility. When the monthly car payment bill arrives, hand it over to your kid and have them take care of the payment. This will teach them how to pay bills on time. Note: If they don't have the money or if you have volunteered to pay for part of their car payment, don't pay it for them, instead, give them the money as part of an allowance and have them manage it.
Open a Checking Account
If they haven't already done so, it is time for them to have their own checking account. Have them use this account for all of their transactions, from depositing their paychecks to paying for their auto payments. Teach them how to write a check and balance their checkbook to make sure they don't overspend. If your bank allows online banking, teach them how to set up an account and manage their money online.
New Zealand Herald
10 Money Tips for Kids
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