Believe it or not, there’s a knack to keeping teens interested and engaged. When it comes to topics like managing money and using credit, actions definitely speak louder than words.
The Center for Financial Empowerment, the nonprofit organization founded by SCE Federal Credit Union, has been teaching teens smart money management skills since 2005. We know a thing or two about what works. Here are 5 ways to give your teen some hands-on lessons about money:
1. Give your teen a set amount for back-to-school supplies and let him create a budget for how it will be spent. Let him make the purchases in cash, to better feel the impact of the dollars being spent.
2. Let your teen earn money by doing chores or helpful projects, then have her calculate how much of her earnings would be deducted if she were charged federal and state income tax.
3. Next time you stock up on groceries for the family, bring your teen along to the market. Tell him the amount you have budgeted to spend on food for the week, then have him add the amounts of each item that goes into the cart on a calculator. Point out that most families spend more than they plan to on food.
4. When you sit down to pay bills, have your teen sit with you. Tell her your paycheck amount, then let her subtract each bill and other incidentals that need to be paid from that amount.
5. Challenge your teen to find ways to generate his own income and start investing. Being able to earn his own money will build confidence, and just $50 a month into a good mutual fund can be a great way to start building wealth early.
There are plenty of money-related life lessons we experience every day. It only takes a bit of intentional planning to harness those experiences into learning opportunities for your teen.