Recs

4

Give Your Teen Money Sense

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Teaching your teen about money management isn't an easy proposition. Between the hulking advertising industry dying to get its hands on your teen's disposable income and peer pressure to buy the "right" brands, parents can feel they are fighting an uphill battle when they talk about saving and moderation.

Teaching your kids to delay gratification, to save hard-earned money, and to be wise consumers offers them critical skills that will pave the way to a successful adulthood. What you can do:

  • One of the most important things you can do to teach your teen good money management skills is to model them yourself. If you have a wicked credit card habit, you can be sure that your teenager will be the first to point out your hypocrisy.
  • Encourage your teen to get a job. While this will mean more disposable income for her (just what advertisers are hoping for), it's also an opportunity to learn about the value of time and hard work. The purchase that looked perfectly reasonable when you were paying for it can seem less necessary when your teen realizes she had to work five hours to earn it.
  • Show your teen how to bargain-hunt. They can often find the same item for less by simply checking Froogle or another cost-comparison site.
  • Require your teen to contribute to big purchases. Paying for his car insurance or saving up for a coveted item offers important lessons in delayed gratification.
  • Say no to credit cards, at least until your teen has demonstrated a high level of responsibility. Plastic tends to add to a sense of unreality about money, while handing over a stack of bills is a visceral reminder of an item's cost.
  • Manage those cell phone minutes. Cell phones provide a unique opportunity to teach your child about obeying limits and the high costs of exceeding them. Require that your teen pay for any excessive phone charges and you may get them practicing moderation in no time.
  • Create plenty of opportunities for either/or decision making. Saying "yes" to all of your teen's requests doesn't require her to practice any decision making at all. Make sure, even if you have the means to indulge her every wish, that you say "no" without guilt.
  • Teach your children to think critically about the advertisements aimed at them.
  • Make saving look attractive. Open an IRA for your child and encourage her to contribute a percentage of each paycheck by offering to match the contributions. In 2009, contributions to an IRA can't exceed the amount a kid earned in the course of a year or $5,000, whichever is less. So if your daughter made $1,000 working her summer job, $1,000 can be contributed to an IRA. It doesn't matter who contributes the money -- the kid or the parents -- as long as the combined amount doesn't exceed the limits.

The good news is that, despite your 16-year-old's protests, parents hold a lot of influence. Using it to teach your teen effective money management is a gift that will keep on giving throughout a lifetime of consumerism.

For more Foolishness:

This article was originally published on Sept. 16, 2006. It has been updated by Dayana Yochim. The Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 929565, ~/Articles/ArticleHandler.aspx, 11/28/2014 1:19:00 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,828.24 0.49 0.00%
S&P 500 2,067.57 -5.26 -0.25%
NASD 4,791.63 4.31 0.09%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes


Advertisement