Every kid needs to be taught how to use money. Most don’t become financially independent on their own, they need guidance and support. Someone to teach them is necessary to provide the kind of tutelage that the majority of teens need to learn how to properly save, spend money, and budget. It is best to start young, but most people don’t learn really how to use money until they are young adults. There are things you can do to make sure your teen learns the ways of the financial world to become a responsible person with money. Here are a few of the many methods you should implement to help your kid save.
Give them a Prepaid Card
One way to help your kids get a feel for how money works and how they should save is to get a card pre-loaded with funds you provide. With one of these prepaid debit cards, your teen can learn by doing, which we all know is extremely important for defiant young adults. According to the site MoneyPug, which is regularly used to find and compare prepaid cards, you simply register the card and allocate money you allow them to spend. Not only will you teach your kids how it works, teens can withdraw cash and use the card online and in stores.
They also won’t be able overdraft, spend too much, or dip into your savings. Instead they will have a limited amount of funds that you provide. This will be for food, school supplies, activities with their friends, and more. The key is to teach them that they don’t get any more money once it is spent. The amount is what they have and if they spend it, it’s gone.
Teach them to Automate Finances
Another tool of the modern world is to teach your teen how to automate their finances. By doing so, it will help keep their money organized when they are still learning. Automation siphons income into various channels per week or month and applies them first to mandatory bills and expenses, then to less important things. You can teach them how to put the money away into a savings account. These apps and services teach financially responsibility, enabling users to invest in themselves and budget a set amount of spending cash. Using automation, teens can learn how to become financially savvy.
Remind them about Credit
Credit has become a multi-billion dollar industry that is predatory against the poor and those who don’t manage money well. Another great lesson is to teach your kid the ways of credit. If you teach your kids to always pay the money they borrow back immediately and avoid debt at all costs, it will stick with them. It is mandatory not to pay the minimum back but all of it, immediately, and if you can’t do this you are living beyond your means. With lessons of credit horror, you can caution your kids from becoming financially irresponsible and sinking into debt. This way, your teen can benefit from credit, not be crippled by it.
An overlooked skill of both financial independence and responsibility is to communicate with those you share and spend money with. Developing these skills can not only lead to greater financial standing, it will help them in every aspect of life. Keeping your position with money a secret will not help you, your partner, your kids, or anyone else who depends on you.
Practicing habits or organization is another good life skill, it can be extremely helpful when it comes to managing money. Financial independence is gained through positive habits. Showing your teen how to setup an organized schedule and how to allocate money, you will foster a more capable and financially responsible person. Like automated finances, organizing them on your own can be a great lesson. Your teen will understand if they spent money where they shouldn’t have and will learn from their mistakes. Soon, they will detest disorganization.
There are many moving parts when it comes to financial independence, but by teaching your kids simple tips, tactics, and rules, you will cultivate a young person who is not just responsible but great with money.