Summer has finally arrived and most of your teenage children will probably be out and about searching for a summer job, or maybe he/she already has one. Like most young Americans, money management is a skill that’s yet to be learned. Most will splurge on video games, makeup, clothes, etc.
As parents, it’s important to show your children that saving and setting budgets is key to securing a stable and comfortable financial future. VFCU understands the challenges parents face when teaching their children about money matters.
Money management skills are essential for teenagers to be successful in life. These skills will help them have a concrete understanding of money concepts. Below are some helpful tips about money that teenagers should know, and some ways to help ease the process when the topic of money arises.
Ask us how we can help your teenager on their financial journey. VFCU’s Youth Account will help him/her learn important skills for a more secure financial future.
Creating a Budget
Part of managing our finances is budgeting correctly and smartly. There are many ways to teach teenagers about budgets, but the most important step is making them realize the consequence of choices. By showing them that they have to make important financial choices, you’ll help them make decisions on avoiding buying things they don’t need.
Helping Them Save
Parents are usually the first line of defense against the first parking ticket, broken bike or stolen phone. Most of the time, parents feel like a financial institution themselves. Have a conversation with your teenagers about how they can save for unexpected expenses.
Suggest setting aside a few hundred dollars in a savings account for future important expenses like college tuition. According to Bonnie Mejia, Vice President of VFCU, making it a habit to save is key to a successful financial future.
“Money earned from birthday gifts or summer jobs can be used to contribute to a savings account. Even a $10.00 weekly contribution can add up.”
Debit and Credit Cards
Teaching your teenagers about interest is another skill they’ll desperately need, especially with what happens when credit card bills aren’t paid on time. Knowing the differences in debit and credit cards will help them make smart money decisions and when to use which.
Learning About Student Loans
Every year, higher education seems to rise in costs. While some parents open up a college fund for their children, with expenses rising, students will probably need to take out loans to cover additional costs. Have a conversation with them about future financial expectations and how costs will be taken care of. Also educate them on how student loans work and what other options might be available to them.
The responsibility of repayment will also help them be better prepared in adulthood when seeking to make purchases for homes and cars. You could also talk to them about your experience with debit or student loans. Two-way communication is important if they are to get a better grasp of understanding student loans.
Having a summer job is a great way for your teenager to earn money, and a great opportunity to teach them about taxes, what is deducted and how to read a check stub. Talk to them about what their passions are or what they want to study when in college. You may have a young, bright entrepreneur in the making. If they have a passion for programming or crafting, they can start a business if you guide them in the right direction.
Learning about investing can be a handful, but you don’t have to delve into specifics. The basics of how the economy works will help them make sound decisions if they decide to make investments later in life. Talk to them about what a Roth IRA is and you can even match their contributions if you really want to participate.
VFCU Can Help
By taking the time to teach your teenager about money, they’ll have the financial skills to make the right choices. Money-management, saving and budgeting are crucial in today’s world. VFCU can help your teenager through their journey. Call us or visit any of our Rio Grande Valley credit unions to learn what we can do for you.