Teens need to understand how money works so they can manage it wisely. Some finance topics you should discuss with them include budgeting, investing, credit, saving money, and how to avoid excess debt. These conversations don’t have to be boring because there are fun ways to teach teens about money management. Here are some ideas to get you started.
Give Them Gift Cards to Learn Budgeting
Instead of giving them more gadgets and toys, give your teens gift cards to help them learn how to budget. Teach them how to compare prices and how to determine wants from needs to avoid overspending on their gift cards. Put a certain amount on their gift cards and don’t reload them if your teens used up funds on their cards too soon. They need to feel the consequences of mishandling money so they’ll make better choices in the future.
Play Monopoly With Them
Monopoly is a board game that is based on the concept of acquiring real estate to build wealth. All players start with a set amount of money and dice to navigate the places on the board. If your dice lands on unowned properties, you can buy them. If your dice lands on another player’s property, you pay rent to this player. If you cannot pay rent or other debts in the game, you’re eliminated from the game. This game teaches your teen about budgeting, avoiding debt, and saving money for future goals.
Be Their Creditor
To teach your teens the importance of good credit, be their creditor and assign them a credit score based on their credit history with you. Suppose your teen wants to buy an outfit for the prom. If he has a part-time job, you can lend him what he needs to buy the outfit but he must repay you with his own money. If he repays you on time, you increase his credit score. Then he can borrow more money from you. But if he starts borrowing and fails to repay you, you’ll charge him late fees and give him a lower credit score.
Put Them in Charge of the Snack Budget
This is another fun way to teach teens about money management. Since most teens love snacks but the costs add up, why not teach them how to spend money wisely on their favorite treats? Assign your teen the responsibility of managing the snack budget for the family. Give him a certain amount of money he can work with and ask him to create a budget for the snacks. Your teen will need to seek out ways to save money on the snacks without asking you for extra funds.
Discuss Student Loans and Ways to Afford College
When you teach teens about money management, you must have a conversation about student loans and other ways to afford college. Tell your teen that student loans are used to pay for college but once they graduate, they’ll have to repay those student loans. Mention some of the consequences of not repaying student loans such as financial stress, struggles to buy a home, lower credit scores, and delayed goals such as starting a family and retirement. Talk about how your teen can get scholarships to reduce his need for student loans.
Teach Them About Debt
So many teens think credit cards and other types of loans as free money but they’re mistaken. Tell your teens that whenever they borrow money from others, they will be in debt until they repay what they borrowed. Discuss how excess debt affects them mentally, financially, and emotionally. When someone is deep in debt, they get discouraged and it sucks any motivation they have in their careers and relationships.
Look for Fun Jobs That They Can Do
Since earning money is a part of building a solid financial future, you can assist your teens in finding fum ways to earn money. Some good jobs for teens are:
- Graphic designer
- Youtube content creator
- Freelance writer or editor
- Working at local arenas during major events
- Online tutoring
- Virtual assistant
- Dog walking or dog grooming
Ask your teen what his interests are and observe the areas he’s the most talented in. If he loves to cook, he may work at a local restaurant or bake delicious sweet treats for neighbors’ parties. If your daughter is talented with doing makeup, she can create an online portfolio of her work to show potential clients.
Once your teen starts working, open an online high-yield savings account for her. She should put aside 10 to 15% of her income every week into this account because it builds savings for emergencies and long-term financial goals such as homeownership. Build future wealth for her by opening a custodial brokerage account for her. Deposit some money into this account and purchase a few stocks. Your daughter will then deposit some of her own money from her paycheck every pay period.
Watch Personal Finance Videos Together
Some teens are visual learners and get bored with books. Watch some engaging personal finance videos with your teens on the weekends. Have your teen take notes during the videos, and he’ll write summaries of the videos he watched. Ask him his opinions of the videos and how he can apply the lessons to his life.
Teens need to learn how to manage money well so they can have the right financial foundation. These ideas can help you guide them in the right direction.
