^ Back to Top
954-260-0805

Financial Literacy

7 Tips You Can Start Using Now to Help Your Teen Gain Financial Success

Posted by Sue Scheff on May 04, 2017  /   Posted in Parenting Teens, Teen Help

According to a Sallie Mae study, more than 84% of college students have credit cards and 20% graduate owing more than $7,000.

Although it can be a good thing to open credit cards early in life, collecting debt that you cannot repay is never good.

At 18, your child can get a credit card without your consent.

Start talking to your children about the importance of financial security before they begin making uneducated decisions on their own. This should happen before they go to college for the best chance of financial success.

  1. Start the conversation early – As soon as your child is old enough to understand the concepts of earning, borrowing and paying, it’s time to start talking about credit. Explain the fundamentals of credit cards and how they work, including repayment plans and interest rates. You’ll find that life is full of teachable moments, so continue the conversation whenever you see an opportunity to reinforce positive behaviors or warn about negative ones.
  2. Explain how credit scores work – With a basic knowledge of how credit cards work, your child may soon be ready to learn about credit scoring. This conversation can become very detailed, but it’s okay to start with the basics. Let your child know that these bureaus are monitoring how you use credit and you are graded on their assessment, much like you would be graded on an exam.
  3. Help Her Build New Credit – Every child is different, so there isn’t a magic age where it makes sense to give your child a credit card. If your child is mature and shows that he or she is responsible with money, you may want to co-sign on a card while he or she is still a minor. This will give your child a head start on building credit. By the time he is 18, he could already have built new credit that will increase his credit score.
  4. Start a Savings Account – Children under the age of 18 cannot legally open a savings account on their own, but you can open a joint account for your child at any time. Having her name on the account will give her some flexibility to make financial decisions, and because you are involved in setting up the account, you can open a dialogue about how to save money. The way you approach this will depend on your child’s age and your own preferences, but you should offer some guidance on how your child uses the account. For example, you may require that all money goes into the savings account before any purchases are made. Review the balance regularly and discuss things like future purchases and how to save more money.

If you want a savings account that your child cannot access, consider a 529 College Savings Plan. This is a state-sponsored program available in many states. You can contribute to this savings plan without being taxed.

  1. Start a Retirement Savings Account – It may seem premature to start saving for retirement when your child is still in diapers, but this is one small thing you can do to help secure her financial future. There’s now a kid-friendly Roth IRA that parents can fund before their kids even enter the workforce. Parents can save money for their children’s retirement tax-free, as they would with a standard IRA. The account may continue growing as the child grows. As your child begins working, propose matching all or some of the money she invests throughout college.
  2. Create a budget and task them to report back – For many children, college is the first time they are living away from home. With such freedom comes responsibility that some are simply not prepared to handle. You can help by getting involved with creating and maintaining a budget. This is especially prudent if the child is receiving an allowance.
  3. Create an investment portfolio – You can start investing in mutual funds on your child’s behalf at any time. However, since this is a long-term investment, try to keep the risks on the low to moderate side.

One of the greatest gifts you can give your child is financial intelligence. When he understands how and why he is making smart financial decisions, he is more likely to continue following that pattern.

The simple act of opening a dialogue about finances sends the message that money is never a taboo topic. Armed with a healthy attitude towards finances, your child is less likely to accumulate crippling debt and more likely to achieve financial success.

Contributor: Trevor McDonald

Tags: ,,,

Financial Independence Lessons Every Teen Should Learn

Posted by Sue Scheff on September 25, 2015  /   Posted in Parenting Teens, Teen Help

TeenSavingAs your child approaches his teen years, he is quickly gaining a sense of independence in many different areas of life. Soon he will be staying out a little later and driving the family car. This new-found independence should also include money management skills, but many parents fail to teach their teens about money-saving habits and financial independence. When your teen is ready to leave the nest and step into the adult world, make sure he has the skills to be successful.

Start a Savings Account

Many checking accounts come with debits cards, so teens can have a sense of independence when it comes to managing and spending their money. You can rest assured that your teen will not be making unnecessary purchases, as a variety of banking providers, like Wells Fargo, for example, offer tools that allow parents to set daily limits on debit card purchases and ATM withdrawals. Although this might seem to be encroaching on his independence, keeping a watchful eye on your teen’s finances will ensure he practices wise spending and saving habits.

SavingtipsCreate a Budget

Teens are impulsive. This is especially true when it comes to spending money. During the teenage years “wants” surpass the needs. But, as your teen approaches adulthood, it’s wise to teach him about budgeting and distinguishing between his “wants” and “needs.” First, show your teen how to set up a budget by using categories. This can include food and entertainment expenses like concert or movie tickets, for example. Then, identify which unnecessary items can be cut from the budget. Outlining your teen’s budget can give him a new perspective of his spending habits. The app P2K Money can help you and your teen successfully plan and keep track of a budget.

Keep a Money Diary

Similar to a budget, a money diary can help your teen keep track of his purchases. For many teens, this is as simple as keeping a handwritten journal of all income and expenses. Have your teen write down how much money he has from odd jobs, allowance, gifts and his part-time job in addition to what he is spending it on. Additionally, you can encourage your teen to save important receipts inside of the diary to keep track of big purchases. Having a money diary and writing in it regularly will help your teen make money management a priority.

PayingBillsMake Them Pay the Bills

No, we’re not talking about the utility bills or the mortgage. However, teens should have some sort of bill paying responsibility during their final years at home. If your teen is earning money from his own job, give him a small taste of the real world by having him make a monthly payment to you for his portion of the phone bill. Many teens cannot live without their smartphone, so although he might not want to pay at first, most teens will eventually be willing to pay for this luxury. Or, if your teen has been waiting to upgrade his smartphone to the new Galaxy, show him how to create a budget, save for the phone and document the purchase in a money diary. This simple method can be used for many big purchase and it’s helpful when teaching teens about financial independence.

Tags: ,,

As Featured On

DrPhil_Season_7_title_card1-250x139oprah-logo-250x1091PLATFORMforgoodParentingTodaysKidssunsentinelGaltimeFoxNews1Forbes-Magazine-Logo-Fonthuffington-post-logo
family online safetyTodayMomsusatodaywashpostabcnewsCNN-living1anderson-cooper-360-logo-250x107cbs_eve_logobostonglobe-250x250nbc6newsweek

..and many more.

  • Facebook

    This message is only visible to admins.

    Problem displaying Facebook posts.
    Click to show error

    Error: An access token is required to request this resource.
    Type: OAuthException
    Solution: See here for how to solve this error
  • Follow @SueScheff

  • RSS Sue Scheff Blog

    • The Ongoing Tech Talk Debate November 13, 2019
      Why is the tech talk is more difficult than the sex talk? Your ongoing offline conversations are what helps keep your teen in-check online. It’s important that you don’t loose your cool and keep those lines of communication open, many of us realize this isn’t always easy. “Your teen may always be an app ahead […]
    • Best and Worst Social Media Platforms October 8, 2019
      Instagram, Snapchat, Facebook, Twitter, TikTok and more. The CyberSmile Foundation released their Social America report. As many people are anxiously waiting to hear if the ‘like‘ button will be removed on both Facebook and Instagram, over 20,000 young people (both Gen Z and Millennials) were surveyed about their favorite (and not so favorite) social media […]
    • Nobody’s Victim: Fighting Psychos, Stalkers, Pervs and Trolls September 16, 2019
      Power Pervs, When Troll Armies Attack, A$$holes in Charge, Swipe Right for Stalking… are some of the chapter titles in this empowering and brilliantly written book, Nobody’s Victim by Carrie Goldberg. As a victim (and survivor) of internet defamation, cyberbullying and online shaming, I consider myself very fortunate. Nobody’s Victim outlines some of the darkest […]

To get help, CLICK HERE or call us at 954-260-0805
P.U.R.E. does not provide legal advice and does not have an attorney on staff.
^ Back to Top
Copyright © 2001-2019 Help Your Teens. Optimized Web Design by SEO Web Mechanics Site Map