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Most teenagers are overwhelmed by the idea that they’re growing up and they are also looking forward to enjoy their freedom all the time. A lot of parents usually think that their children’s spending habits are normal, however if they don’t understand the value of money at an early point, they might end up ruining their finances in the future. Here’s how you can teach your children about handling and budgeting money. 1. It is important to explain your children how financial matters work because most of them hear it often but don’t even know what it means. You have to teach them how checking credit report, credit cards, loans, debit cards etc work. Don’t forget to mention the interest payments, why they should pay on time and the possible consequences that can happen if they don’t so that they’ll learn to value money from now on. 2. Give them their weekly or monthly allowance. The best way to let them know how money works is to let them experience using it, budgeting it and even losing all of it. They have to experience all the ups and downs of money so that they’ll learn to value it. Giving them their allowance will somewhat serve as a training for when they handle their money when they grow up. This will also train them to become financially stable, responsible and independent. 3. Establish a few rules with your child. For example you’re giving your child a car, tell them that you will cover the insurance of their car but they have to save money because they will be responsible for the gas. Or you can cover their school and clothing expenses but tell them that they have to pay for their extracurricular activities. 4. Encourage them to get a part time job. People are more into saving their money if they worked hard for it. If they put some effort to earn a certain amount of money, they will be more into budgeting it and setting aside some of it regularly. 5. Teach them how to create a budget. By simply telling them to make a list of all of their expenses all the time, it will help them track of their money and where it goes. Get a piece of paper and tell them to write down everything that they spent on, no matter how small or big it is. Also, tell them to write down the date so that they’ll remember the details. You should explain how budgeting will affect their allowance. 6. Encourage them to save up. By asking your child to save up a few dollars every time they get their allowance, you can help them start a stable future. Give them a coin bank or even open up an ATM account to put their money in it. 7. Even though you want your child to experience everything, you still have to guide them and tell them if what they’re doing is wrong. You don’t necessarily have to interfere with their entire decision making but you do have a right to tell them when, why and how to stop when what they’re doing is going to harm them or their credit. Teaching teens about money is very important because it serves as a stepping stone to their future. Not only will it help them to grow into responsible adults, but they will also be able to pass it on to their children. Consider these tips and start teaching your child how money works. Joy is an active blogger who is fond of sharing interesting finance management tips to encourage people to manage their personal finances. More specifically, she advocates that people should check credit scores regularly. Follow Joy and discover tips on how parents can teach children about budgeting.
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