March 29, 2014
One of the simplest ways to help your teen develop money management skills is helping them understand the relationship between (1) money coming in (2) money going out for fixed expenses, and (3) what they’d like to spend their money on.
Talking about expenses – the must haves and nice to haves – is not always easy and of course can be a subjective conversation even with adults.
Perhaps one of the hardest money lessons we learn in life is the difference between things we just have to pay for (phone bills, food etc) and the things we want to pay for. Of course, the must-pay-for before-anything-else expenses for a teen are quite different from those later in life. But the same principle applies and the earlier we learn it, the better equipped we are to manage money through life.
Consider giving your teen some manageable bills that have to come first and leave them to work out the maths –“what do I need to earn (at home or at my after-school job) to have money left over for the new X Box game / pair of shoes… How many weeks is that?”
It is not always easy as a parent to watch our kids waiting and wanting for something; but in the long run it is a lesson that will help set them up with money behaviours and structure that play a big role in what they can achieve as adults.