First-time adulthood can be daunting enough as it is without the extra burden of having to think about money. So, as a parent, you should teach your children good money management skills so that when they leave the nest, they won’t get into financial difficulty. Children should be taught the value of money from an early age, yet certain concepts are simply too difficult for them to understand. You should give your teenager these financial skills so that they will know how to manage their money wisely.
Learn about credit scores
Credit reports can be confusing even for adults, but they are vital. There is a chance that lenders will reject you even if you have never been in debt. A credit report should be considered as a record of your financial past. Consequently, even people who have not necessarily done anything wrong when it comes to their financial status might consider taking out a minor loan, such as a mobile phone contract, in order to demonstrate to lenders that they are capable of completing their repayments in a timely manner. Educating your teenager about the need of monitoring his or her credit score now will pay huge dividends in the future.
Don’t hand everything to them on a plate
It’s tempting as a parent to give your children everything in your reach to make them happy. However there comes a time in everyone’s lives where they must make difficult choices. If your teen wants that new iPhone, encourage them to make the money themselves! Whether they sell Bob Mackie toys they’ve treasured or find a part time job, they will soon realise that money doesn’t grow on trees.
Discuss how costly it is to be a homeowner
As adults, we realise how difficult it is to buy a home, but as teenagers, we recognise that you don’t fully grasp how it all works. Teach your teen the ins and outs of the home-buying process, including how costly it can be if you’re careless with your finances. A person’s whole life savings will be spent on a house, making it one of the most costly purchases they will ever make. Fortunately, companies exist today to support first-time homebuyers in getting their foot on the housing ladder.
Save a chunk of their paycheck
Saving money is a valuable life skill to teach your teen, and the sooner you start teaching them this, the greater the likelihood that they will continue to do so in the future. To prepare for the unexpected, have your teenager save aside some of their earnings, even if it is simply a weekend job. Even if they may not appreciate it now, they will eventually.
Charge them for rent
Finally, it may seem harsh, but charging teenagers rent once they have completed their full-time study is an excellent financial lesson for them. Eventually, they’ll have to fend for themselves, and their money won’t be disposable. This will teach them this lesson. When your children leave the nest, you might give them a housewarming present of the money you’ve saved by charging rent. This teaches them the value of money.