By Eric Bradford
Managing money seems like a magical process when you don’t have to go work, when you aren’t responsible for paying bills. Yet, accountable adults know that balancing a budget and saving and investing wisely is anything but magical. It takes honesty, commitment and awareness to notice what you’re doing with your money. Simply receiving a significant income isn’t always enough to keep you out of debt.
Teens need to learn that money isn’t magic
Proof of this is revealed, in part, in the fact that the median annual income for Americans was at $52,098 as of June 2013. According to Huffington Post, “That’s down from $54,478 in June 2009, when the recession officially ended. And it’s below the $55,480 that the median household took in when the recession began in December 2007.”
The personal income downward shift that followed the Great Recession is a clear indicator that shows the value of developing strong budget and money management skills. Fail to gain these skills early and you might struggle, at times significantly. As a parent, you have the authority, access and influence to make the financial landscape easier for your children, particularly your teens.
In fact, budget skills you teach your teens could help them avoid going into debt, having their utilities shut off and their homes foreclosed. Steps you could take to teach your children about money and to help them develop healthy responsibility when it comes to paying bills for expenses that they create include:
- Attending financial workshops with your children. Workshops that teach financial responsibility could inspire teens to taking paying bills on time seriously. (Check with your local bank to see if they offer free money management programs.)
- Letting your children watch you sit down paying bills (takes the magic out of the money management process). When your teens see you paying bills, they see firsthand that paying bills isn’t a “magic” process. They also see that it can be done, that there’s no need to dodge or avoid bill collectors.
- Discussing shopping choices with teens. For example, instead of working overtime to afford to buy teens their favorite video games, talk with teens about the many things they could use $50 to do or get. This might cause teens to start to think about what they really want, especially if they have to start paying bills for clothes, accessories and other purchases they want.
You could also let your teens pay their own cell phone and clothing bills. Instead of going grocery shopping while your teens stay at home, bring your teens with you. Depending on your children’s ages, you could also give them $80 to $100 and let them start grocery shopping. This single step can teach teens the value of money and how their purchasing decisions affect what’s in their wallet.