How to Teach Your Teenager About Budgeting

Teenage years are the transition period between childhood and adulthood. It’s the time when kids become more independent, able to transport themselves, work for their own money, and develop other essential life skills. Teaching your teenagers about budgeting is a lesson that will benefit them for the rest of their lives and will help ensure that they reach their financial goals. So how do you start?

Here are some suggestions on how to teach your teen how to budget.

1. Start by explaining what long and short-term goals are.

Long term goals can include retirement, education, and paying back loans. Short-term goals can include buying a new Xbox, saving $1,000 in an emergency fund, and travel. Once they have an idea of their long and short-term financial goals, explain how budgeting is an essential tool in achieving those goals.

2. Involve them in your own budgeting process.

You set a major example for your kids, and by showing them your budget and financial goals, you’ll give them a better idea of how to budget properly. Allow them to ask questions about your process and encourage them to think about what they spend money on regularly.

3. Help your teens create their own budget

Joleen Williams, Branch Manager at People’s Prosperity Bank in Quincy, suggests helping your teens create their own budget to introduce them to the process. “Try having your teens come up with a list of things they consume regularly and include how much they spend on each one. This will probably mainly consist of food, shopping, and other fun activities, or it can include rent, utilities, groceries, savings, and anything else they spend money on. Then, have them subtract the amount of each item from their overall income to how much they spend monthly. This is a great, interactive way to help teens visualize and understand the importance of budgeting. By using their own money, they can better appreciate the value of wise spending and will learn how spending recklessly has consequences.”

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For more information on how we can further assist your teenagers with achieving their financial needs, please contact our Customer Service Solution Center at (866) 770-3100 or visit one of our 11 conveniently located branches today!