by Andrew Lendnal     Your teen is probably asking you for money even as you’re reading these words.  Raise your hand if you’ve never told a child money doesn’t grow on trees.  And if you don’t like the idea of money management or financial planning, chances are that child you’re thinking about right now doesn’t care for it much either.  
After all, children learn by example. 

To follow are some quick tips that can help you navigate the teens and money territory.

Should Teens be Earning Extra Money?

It's good to establish a strong work ethic. And it's good to teach financial responsibility. (You spend it, you earn it.) But keep in mind that your child's primary job is to be a successful student. Financial responsibility is all about setting priorities, and school should be priority number one.

What Your Teen Can Learn from Part-time Jobs

When your teen asks for more money than you're willing to hand over, encourage him or her to get a job. Think back on all you learned from your first few part-time jobs, and rest assured your teen might learn that same stuff too. Plus, you won't need to fork out so much cash entertaining your own teen. Job hunting teaches perseverance, that it’s acceptable to know nothing and that money follows money.

Give Your Teen an Interest In Saving

One of the things that prompts you to save money is the prospect of accumulating interest. Rates these days on a basic savings account won't make anyone rich, but it's fun to watch money grow, no matter what. And that's a valuable lesson. Take the time to help your teen open a savings account if he or she doesn't have one already. You might even want to match some of the money saved as a way to encourage the habit. Hey, you might want to get in the habit of saving money yourself!

Teens and Credit

As an adult, you know the pitfalls of credit card debt, but your children probably don't. Buying now and paying later is a habit that can last for life. It's a very costly habit. And it's one that's so easy to fall into. So you need to make the pitfalls clear to them before they get in too deep. Show them the true cost of credit card debt, right down to the last cent. Point out that buying on credit means paying more for everything. Every dollar they save by hunting for bargains is wiped out by that credit card (unless the charges are paid in full at the end of every month).

Give your Teen a Starter Credit Card?

Sending teens off with a credit card is asking for trouble, especially if they have never used one before. So you might want to start by giving your child one of your credit cards. (Add their names to the user list.) At least you'll have control of the financial records when your statement arrives each month. Control is the key. Make the spending limits clear, as well as the terms of payment. And then stick to your guns.

Open a Cheque Account for your Teen

A checking account is a good way to teach financial responsibility: Cheques, balances, monthly statements. These are all good ways to become money savvy (not to mention overdraft charges). And expenditures feel so much more real when you have to write them out and subtract them from your balance instead of swiping a card through a reader.

Should Your Kids Get Into Investing?

Shares, bonds and managed funds aren't something you need to shy away from with teens. In fact, it's an interest you should probably encourage, either by helping your child track fictitious shares (or bonds or funds) purchases or by opening an actual custodial account through a broker or financial professional. The account will be in your child's name, but you'll control it. Not only will they learn about the market, but they will get used to the idea of long-term investing. (Not a bad idea to get used to.

More information on Teens and Money can be found in the book Gold Start ... covering several areas, from budgeting, first jobs to saving for university or other tertiary studies as well as many other crucial tips.

Part 1 of this series by Andrew Lendnal: Allowances - To Give or Not to Give

About the author:

Andrew Lendnal is a financial author and educator. For several years he has been directly involved in helping children learn about money, has advised financial institutions on how best to encourage children to save, and has given seminars and workshops on the subject. His first book, Budget Wise, Dollar Rich (with Anton Nadilo) was published by Exisle in 2005, and he has since written two books for children. He is employed by the Grosvenor Financial Services Group (who provide products and services for the Camelot Group), where he is Head of Marketing and Head of the Grosvenor KiwiSaver scheme.   Visit www.goldstart.com.au

About the Book:

Gold Start is jam-packed full of excellent tips and advice on how to make your child's life (and your own!) much easier in the future. The book is interactive too: full of questionnaires and tables to work through in order to find out the best financial plan for your family...

Publisher link: Click here to find out more. Click here to find out more about this and other YourKidsEd recommended books for parents!

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