Tips for Teaching Your Teen How to Budget

Parents play a crucial role in teaching their teens about spending, saving, and earning money. As your kids get older and start considering college or living on their own, they may have questions about opening their own bank account and how to manage their finances. Use these tips to introduce budgeting to your teenager.

Set a Good Example

As your kids grow up, they are constantly observing and learning from your behavior to prepare for adulthood. Show your kids the importance of smart spending and how to make important financial decisions by serving as a role model. You can help your teen gain a better understanding of how to be responsible with their funds by including them in everyday financial decisions, such as running errands and finding better prices when you're out shopping. Share some of the mistakes you've made to highlight pivotal lessons on money management.

Give Them Financial Responsibility

Motivate your teen to be proactive about their finances by making them responsible for expenses like gas and going out with friends. Review their monthly expenses together, create a budget for your child to stick to, and provide advice for unexpected costs to help them learn along the way. If your child is considering a large purchase, like a new cell phone or paying for their car insurance, help them create a plan for managing monthly payments. The earlier you can introduce your child to handling their own expenses, the more experience they'll have when they finally live independently.

Nurture a Habit of Saving

Purchasing only the things you can afford is an important life lesson to pass on to your children. If you emphasize a habit of always saving some of their money, they'll certainly appreciate it in their adult life. Encourage your teen to put aside money in a bank account for large purchases and emergencies. Even if they haven't found something they'd like to purchase, continue to express the importance of having a healthy savings account.

At Liberty National Bank, residents in Northwest Ohio can get personalized financial planning support for important decisions, such as saving for your children's education, investing money for retirement, or purchasing a vacation property. Contact us to learn more about how we can help you plan for the future.