Teaching Your Teen To Be Financially Responsible And Independent
Raising a responsible teenager isn't the easiest thing for parents to do. Keeping them safe, helping them do well in school and instilling the morals needed to grow into a kind, respectable, responsible adult is a full time in itself, but what about financial responsibilities? Have you begun teaching your teen about being responsible with their finances and informed them of how much of an impact it could have on their futures? Below, you will find a few things to help you get your teen on the right track to financial responsibility and independence.
Start teaching your teen now about how important it is to have a little nest egg in their savings account. Teenagers are sometimes offered great rates and incentives. Talk with your bank or start researching online to find out the best savings account for teenagers.
Try to opt for a service that offers online access. This will allow you to work hand in hand with your teen to monitor how much is being put into the account, the amount of interest that is accumulating and see where it will stand in the future.
Checking accounts can be dangerous for even adults. Knowing that you can write whatever number you want on that check and buy something even though the money is not in the account can cause all kinds of trouble. Make sure that your teen understands that writing bad checks is actually an illegal action if they are doing it knowingly.
Teach your teen about overdraft fees and bad check fees that the stores may charge. One bounced check can have a significant impact on how much money buying that item costs him or her.
Most adults don't even take the time to set a budget. They work and they live paycheck to paycheck not saving any money for emergencies. Teach your teen that it is important to set a budget and actually stick to it. Each paycheck, a percent should be put in savings, bills should be paid and then whatever is left, is their money to buy the things that they want.
Loans and Interest Rates
Once your teen establishes some credit, he or she may be tempted to begin taking out loans. Teach them the difference between personal loans and title loans. Teach them how the interest rates vary and the fees that could be charged if the payment is late or they fail to follow through with the repayment process.
You never know, you might just learn something about financial responsibility while teaching your teen. If you have any questions, talk with your local lender to learn more about how to raise a financially independent and responsible teen. Contact a bank, like US Community Credit Union, for more help.