Especially when it come to familiarizing your kids with all things money, early is always better. The hope is, if you teach your kids how to spend and save smart from a young age, smart budgeting will become something that is simply ingrained. Here are a few tips to get you and your teens on a healthy financial trajectory.
Help Them to Track Their Spending
Often, the key to good budgeting is simply being aware of how you are spending your money. Have you teen write down their spending habits, going back a few months, and then sit down with them and discuss which areas they could afford to cut back a little.
Get Them a Checking Account
If they don’t have one already, a checking account is a great way to keep track of expenditures and give your child a sense of responsibility when it comes to their money.
Categorize and Set Allocations
Based on their tracked spending, work with your teen to create categories for their spending, after which you can determine a max monthly amount for each categories. For example; food, entertainment, shopping, etc.
Allocate a Portion for Savings
Once you’ve taken the time to discuss and understand your teen’s spending habits and needs, determine together how much of their budget a month should not be touched, otherwise known as their savings. Ensure you are keeping an eye on your child’s spending and that they are saving the agreed upon amount each month.
Of course, a self-budget can take many forms, be it written or electronic. For teenagers in this day and age, you may find it helpful to enlist the help of a personal finance app like SmartyPig (free!), iAllowance, or Left to Spend.