Teenagers need to see with their own eyes how money works in the real world, including where it comes from and where it all goes.
- Explain to your teenager how credit cards and banks work. Make sure you mention interest payments and service charges.
- Give your teenager some weekly or monthly pocket money, unless they have a job and consider themselves financially independent.
- Give your teenager financial responsibilities that you have both agreed on.
- Teach your teenager how to make a budget, i.e. make a list of monthly expenses and the dates they must be paid. Sit down with your teenager and explain how income or allowance must be managed to meet the expenses.
- Get your teenager to open a bank account. Most teenagers are impulsive, so not having cash in hand may keep the spending down.
- Set goals.
- Talk about saving for university, cars and any other big purchases. Make clear what you plan to pay for and what you expect of your teenager.