How do teens learn personal budgeting and money management? Children need to learn the importance of budgeting early on. Money management for teens has historically been the responsibility of the parents; however schools have begun offering courses in this area. There are also workshops available for teens to learn this skill. So what is the best way for teens to learn money management?
What is taught in schools is simply a basic knowledge. The mechanics are taught along with the theories and ideas behind money management. This is all good and well, but there is no personal reference involved. It falls short in the fact that there is no personal tie to the information.
Basic courses in accounting and personal finance have little effect without a practical application. Most skill classes include hands-on portions. This is not offered in public or private school educations. Budgeting and its benefits, as well as its importance, are not effectively learned as a result.
In the home
Parents should take the ball and run with it when it comes to teaching money management to their teens. A start would be to give the child an allowance and tell them to make it last until the next time allowance comes around. This must be adhered to strictly. The result will be the child learning to control their spending. They can also learn short-term saving from this as well as long-term saving.
Sit the child down and go over the rules. Show them how to write out their expenses and plan. One thing parents can do is adjust the allowance to a longer period of time, like a month. This will help them learn to budget over a longer period of time. This incorporates the practical application that is missing from the school education mentioned above.
It is a well known fact that people of any age learn faster and more effectively when they see the effect it has on them personally.
This may be the problem we are experiencing currently with young adults who have no discipline in the area of money management.
Some parents themselves are not very good at managing their own money. Because of this, they are not able to effectively teach money management to teens. This may be the root of the credit card, spending and investing trouble we see now in those young adults. They were never shown or taught, and now they have no idea how to make ends meet.
This can extend to future generations in a vicious cycle that never ends.
We need to educate the present generation of teens how to manage money, invest and budget. The lack of doing so has led to debt overload and credit overload in our own generation.
In order to stop the disease from spreading further, help your kids learn money matters.
Show them your checkbook, how to write bills and put a little aside.
Teach them to average out their necessary bills and save a portion from each paycheck towards those responsibilities.
Give them the ability to do better than you have. Show them how to live better, be debt free and responsible where money is concerned.
Make no mistake about it; money management for teens is THAT important.
You have two choices when tracking your spending quickly and easily. You can use a paper-based system or a software-based solution. We have extensively reviewed both and found products that stand above the crowd. All use the envelope system of budgeting to maximum effectiveness: