Financial responsibility not only signifies a person’s ability to earn a living it is also about managing your money in a way that keeps you out of debt, while still building a decent amount of savings. In short it means living within your means and that is exactly what most people need to teach their teenagers but somehow fail to.
This turns out to be highly damaging for teens later on in their lives. When they don’t learn to live within their means as teens, they end up making huge financial mistakes as adults. Advice on money should come fast. Remember that all debts start off small and overtime grows to a size where it becomes increasingly difficult to manage, till finally there is no way out but to declare bankruptcy.
Begin With a Budget
The first step towards learning to live within a budget is to know how to make a budget. Most teenagers have after school jobs and what they need to learn at this point is how to manage their paychecks.
- Presently the economy is in dire straits. In such conditions chasing dreams of an ideal career can be counted as over ambitious. So when you encourage your teenager to go looking for a job, also remind them of the fact that getting a job in the profession of their choice could be slim so they need to make do with whatever helps them get a pay check.
- The next most important thing that teenagers need to learn is drawing the line between needs and wants. Teenagers, infact kids of almost all ages believe that as soon as they develop a need, their parents develop the means of fulfilling it. Replacing this fantasy with a healthy dose of reality becomes vital during teen years. To explain this concept thoroughly to them, help them make a budget by pooling in their wages/allowance and savings if any. Once they see their “wants” eating up the resources they may need in future for “needs” the message will hit home instantly.
- The next lesson your teen needs to learn about financial responsibility is that it is not just important to build their own savings; they need to contribute towards society as well. So while helping them chalk out their budget, designate part of their allowance/earnings to a savings account and part of it towards a charity of their own choice.
Financially Responsible Teenage Years
Money management for teens is a lesson worth teaching as soon as possible, since once a teen gets into the habit of falling back of parents for financial assistance, the habit will be hard to break. So teach them the crucial lesson of living with in a budget and save them for the agony of getting sucked into the whirlpool of debt and dependency.