Teaching your kids about money becomes a whole new ball game once they become teenagers. Here are some helpful tips to help you navigate the path to helping your teen develop into a financially responsible adult.
START BUILDING CREDIT
One of the factors of your credit score is the length of credit. So the earlier your teen is able to start building credit, the better. As soon as you think they are responsible enough for a card of their own, you can be a co-signer if they are under the age of 18. With our Card Control app, you can decide exactly how and where they can use their card. If you still want them to build credit but don’t believe they are quite ready for a credit card, you can add them onto your line of credit without a physical card.
Start having your teen be responsible for some of their expenses. First, decide what you will be responsible for and what your teen will be responsible for. For example, you could say that you’ll pay the insurance on your teen’s car as well as any major fixes but they have to pay for gas and routine maintenance such as oil changes. As they get older, make them responsible for more and more.
You may not think a budget is important since your teen only has a part-time job. However, the less money you have coming in each paycheck, the more important a budget becomes. Your teen should be tracking their spending so they know exactly where their money is going each month. For the first few months, guide them through the process and help them prioritize their wants and needs. Once they get the hang of it, give them control of their budget.
Some of the greatest lessons we learn in life can be the result of a mistake we have made. Letting your teen learn from a money mistake may be one of the best lessons on the importance of budgeting and prioritizing their spending. Obviously, if they are walking into a mistake that could cause long term damage to their future, feel free to step in. On the other hand, if they choose to buy concert tickets over paying for gas, they’ll have to live with that consequence.