With money being so unstable in the average household right now, this makes for the perfect time to teach your teen to budget this summer.
Many of us are currently fighting to keep our jobs, put food on the table, and pay our bills. But for a teen, who was likely looking forward to long summer days, spending time with friends shopping, and enjoying life as usual, budgeting might be a much harder adjustment.
While you don’t want to ruin all of your teen’s fun, teaching them to budget now will help them be better prepared for the future.
It’ll probably also make your life a little easier if they understand the tough choices a lot of us are having to make right now to be more responsible with our money.
Here are a few tips you can follow to teach your teen to budget this summer.
Include Your Teen When Talking About Family Money Matters
For some families, allowing kids to be involved in adult conversations is a big no-no. But when it comes to money, this is a family matter. After-all, a lot of what you spend is to help take care of your kids. And they will, of course, ask for this, that, and the other every chance they get!
Involve your teen in money discussions in your household. Maybe they won’t always be interested, or even understand. But letting them get a first-hand view of how a household manages their own money is the best experience.
If you routinely go through your budget, sit down with them to go through each expense. Let them see how much money comes in each month and from where. And then show them how much money goes out each month and for what.
This will help them see that there are priorities when it comes to money. Necessities and bills come first before anything else. And right now especially, sometimes there isn’t money left over for the fun stuff.
Stop Picking Up the Money Slack
As parents, it’s our job to provide the necessities for our children. But when it comes to something they want, there isn’t usually room for that in a tight budget. And most kids will come to expect parents to pick up the money slack for them when they want something.
A great way to teach your teen to budget is by making them buy the things they want themselves. Whether they are old enough for a job of their own or rely on an allowance or birthday money from grandma, make them take responsibility for what they want.
It’s a lot easier for your kids to think money grows on trees when they aren’t the ones earning or saving it. By making them responsible for their own spending, they will learn really quickly just how easily money disappears and how long it can take to earn it back.
Plus, this will really help them develop an appreciation for taking care of their material things, since it was their money that got them it. They’ll learn the value of working hard for what you have and become more independent.
Help Your Teen Create and Manage Their Own Budget
A budget doesn’t have to be a complicated thing. It’s really just a plan for your money. So, if your teen has money (coming from anywhere, not just a job), they should have a budget.
Help them find a simple budget worksheet that can be printed or filled out online. Or, if your teen has a phone (are you teaching them to budget for this expense every month?) there are tons of free budgeting apps out there.
Show them how to keep track of any money they have, whether it’s a consistent bi-weekly paycheck or an inconsistent here and there from family or small chores. Then have them create a few goals they want to save their money for. This might be something small, like a new pair of shoes, something mid-range, like a phone, or something large, like a car. Teach them how much they’ll have to save each month to earn enough in a certain timeframe.
From here, it’s up to your teen to either stick to their budget… or fail miserably. Don’t interfere or bail them out if they do. This is a harsh lesson to learn, but best to learn now then when they are supporting themselves or their own family. And at the end of the day, if they can’t get what they want because they didn’t save for it, it isn’t going to hurt them.
As your teen becomes better at budgeting, they’ll need to consider where they will keep their money. A prepaid debit card is a good option for them since won’t be able to get into debt with it and will only have access to their own money. It can also further help with budgeting as they will need to keep track of how much money is on the card before spending.
Remember that teaching your teen to budget is a life lesson for them. It might not be the most fun way to spend their summer, but it will help them grow into responsible adults and one day, they’ll thank you for it.
CFSC’s blog is the perfect place to learn about budgeting, saving, and making your money work for you. Take a look at our other articles for some of the best tips and advice for making your life easier!