Every parent should know that teaching children the true value of money, together with financial responsibility importance is vital for future development. Nowadays, it is more important than it ever was to teach teens how to be credit card savvy. Really good credit automatically means that the child ends up understanding things when young. This prepares them for the time when they will be alone. Turning Point USA works hard to teach children and teenagers about financial responsibility. They offer the following tips.
Discussing Financial Realities
The first thing to do is to talk to the teen about living in the current financial reality and its constraints. You want to be sure that you discuss differences between wants and needs. Many teens believe they need instant gratification. Try to explain how important it is to live within current personal means and then earn what is spent. This is a truth for most families around the world. Living outside of current means is the main reason why financial difficulties appear.
In an attempt to protect children, many parents forbid teens to take jobs. This is not actually a good idea. In reality, you want to encourage taking part-time jobs that do not interfere with education but offer a way to earn money. In some cases, this is not possible so you want to set up some sort of an allowance system. This teaches that money should be earned and after money is earned, teens tend to think two times about what money will be spent on.
Start A Prepaid Credit Card
Starting teens out with prepaid credit cards is not at all a bad idea. This allows teens to properly understand the way in which the credit card works, together with attached financial concepts and risks. All this is useful since it happens without having the real credit card in hand. In addition, the teen learns how to track spending habits. This offers the first step towards proper money management.
Be A Role Model
The last really important tip that has to be highlighted is that the parent needs to be a role model when it comes to financial responsibility and management. We are living in tough economic times. Children do see parents struggling and realize that they have poor spending habits or mortgages that cannot be afforded.
Instead of making the situation more stressful, you should do your best to practice proper financial responsibility. The better you manage the situation you are in, the better the child understands what to do in the future!
Teaching children financial responsibility is really important, even if most parents do not realize that this is the case. It is vital that you take the right steps when educating children. Fortunately, there is a lot of information written about this subject on the internet. With a simple Google Search you can find numerous articles that teach you how to teach financial responsibility. Start with the tips mentioned above and see what else you can do to teach the teen financial responsibility.