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TurboTax Specialist

Six Things Your Teen Needs To Know Before Leaving Home

No matter what generation you claim as yours, things are different for kids these days. Allowances are expected, part-time jobs are hard to come by, and inflation has made everything more expensive. Add the convenience of electronic banking with credit card mania, and you have a combination that can spell disaster for any clueless consumer.

 

Use these six simple lessons to give your teen a head start:

 

  1. Money doesn't grow on trees.

Translated into teen-speak, this means you have to earn before you spend. And just because you have checks doesn't mean you have money.

 

  1. Pay yourself first.

Basically, take advantage of compound interest by building a savings account - set aside 10% of everything you earn.

 

  1. Budgeting is your friend.

This can be as simple as three Mason jars. Every time you get paid, put 10% in one jar labeled "Savings", another 10% goes in "Tithing" (or "Retirement"), and third jar is for "Bills". Spend only what's left over.

 

  1. Never believe an ATM.

This holds true for your smart phone app or online bank balance. The number you see doesn't represent money you can spend. You may have outstanding checks or bills coming due. Learn to keep and reconcile a checkbook or use money management software.

 

  1. Credit cards are not Monopoly money.

Lenders bombard college-age kids with credit card offers because once you start spending ahead of your income, you're doomed. Use your savings account instead.

 

  1. The best things in life are free.

Good friends, a loving family, the great outdoors, and sharing yourself with others all build self-esteem and create more happiness than anything money can buy.

 

Send your teens off with money management skills that will last a lifetime. And trust that they will at least call you when they make their first million.


Do you have other suggestions for bringing up money-savvy kids? Share them now!