Parents are the greatest influences on their children’s behaviour believes Patricia Seaman, the senior director of the National Endowment for Financial Education. She recommended that parents teach their children from an early age how to manage their money well.
Teaching concepts such as creating budgets, using credit wisely and saving for retirement can greatly benefit your teen’s future, Seaman said.
These five tips are good ways to instil money management skills in your child:
Cover the basics from an early age
Once a child reaches the age of five, they can start doing chores around the house to earn pocket money. A good way to teach children about budgeting is to insist that a certain percentage of their money earned goes into a savings account.
Give them responsibility
Passing the financial buck to your teens where appropriate teaches them about responsibility. Put them in charge of paying their phone bill or give them a clothing allowance.
Consider retirement
It may be a long way off, but the earlier your teen starts saving for retirement the better. Talk to your bank about an appropriate account.
Monitor credit cards
A credit card is sometimes needed when it comes time to head off to university, but you want to ensure it is being used for books or emergencies only. Set up a joint card so you can monitor their spending habits and advise when needed.
Turn buying a car into a lesson
When it comes time to drive, have your teenager do all the research for you. What cars are in the budget? What is the safety rating? How much is insurance? Doing this will make them see the real cost involved and give them insight into their future.
Source:http://www.detroitnews.com/article/20130715/BIZ01/307150007/How-teach-your-teen-manage-money?odyssey=mod%7Cnewswell%7Ctext%7CFRONTPAGE%7Cp
