Protect your teen from these four money mistakes.
Imagine if all your income was disposable, and you had very few responsibilities. It would be a real challenge to develop the disciplines required for long-term financial health. This is where a lot of teens start when they’re introduced to money.
As parents, it’s our job to instill a healthy attitude about money while equipping our kids with skills to manage their finances. Our teens are going to make some mistakes, but we can help them make mid-course corrections and keep them on track.
Let’s look at four mistakes teens make when managing their finances.
1. Spending too much on special events
When it comes to events like prom, kids feel a social pressure similar to adults. Parents can help teens negotiate their spending on these events, showing them how to get deals and create a special evening that’s within their means.
It’s also an excellent opportunity to talk to them about financial peer pressure. The earlier we can help them recognize this tendency, the better.
2. Not putting money into savings
Some kids are natural savers, but all kids need to learn to put money away. Unfortunately, a lot of kids will spend it as fast as it comes in.
Teens practice spending habits that they’ll carry into adulthood—so if they don’t learn to put money away when they’re young, they may struggle to make a habit out of it when they’re older.
3. Delaying building credit
Parents aren’t typically thinking about their teen’s credit, which can be a bit of a problem. In a few years when they actually need good credit to rent an apartment or buy a car, they won’t have it yet.
But before going out and opening a credit card in your teen’s name, try a safer approach with a debit card. This will give them practice using a card responsibly, which they can later use to build their credit. And with the right debit card, you can also control the spending limits and monitor spending habits.
4. Carrying cash
We live in an age when everything from music to banking is digital, and our teens needs to be prepared. They should know how to monitor their account from an app, make mobile person-to-person payments, use a debit card, and digitally deposit checks. That way, the cashless world won’t be a big puzzle to them later.
Start Young Savings and Spending Accounts from Evangelical Christian Credit Union help prepare your teen (and even younger children) for the world of digital banking. It’s the safe and secure way for them to learn the necessary skills required for managing their finances, and it gives you the ability to guide them through the process. Give your teen the tools they need today.