What’s worse is that with the ever-increasing cost of living, even teens need to know how to manage their money, sometimes before they hit 18. If you’ve been wondering how to teach your teen about money, you’ve come to the right place. Below are five easy tips to help your child become financially savvy.

Saving for College

Paying for college is one of the biggest expenses your child will ever have and you want to have them start saving as early as possible. If your family usually gives money at the holidays, talk to them about putting half away in a savings account.

Over time, they may very well build up a nice nest egg to help decrease the cost of tuition. If they don’t have enough, which is usually the case, you can always apply for a low-rate Private Parent Loan.

These loans allow you to be the borrower while your child receives the funds for their education. You will be responsible for the loan, so it’s important to understand this prior to applying.

Invest Early

In addition to saving gift money, you can also look into investments. These days, there are many younger people online who have mastered investing, even before they turn 21. There are also a variety of low-risk stocks you can consider investing in. You can research online or speak to a financial investor about your options.

Talk About Impulse Buying

At one time or another, most have made the mistake of impulse buying a big-ticket item. While doing it once isn’t really a big deal, doing it over and over can have disastrous results. Have a serious conversation about ways to offset impulse buying. Provide viable alternatives like saving up for an expensive purchase or waiting until that item goes on sale. Their focus should be on learning how to wait for something they want, not needing immediate gratification.

Learn How to Be Happy with Less

It’s human nature to want to buy things that make us feel good. After all, buying something we want is a reward and finally getting it often comes with a release of dopamine. The thing is, when young people only associate spending money with these feel-good emotions, overspending can become an issue.

Explain how there are other ways to feel content without having to buy something and it is one of the most important life skills for teens to learn how not to hinge your happiness on material things. Instead, happiness can come from doing their favorite hobby, cooking their favorite meal, or spending time with their besties.

Create a Mock Budget

If your teen has a part-time job, they should also have a bank account. Discuss how they need to set up a budget for their expenses, like grocery shopping, paying utilities and having spending money in their pocket. If they’re old enough, they can also put money away to help pay for their cell phone, health insurance and gas for the car. This will help them see where their money is going without you having to remind them to pay their bill.

Read: How Short Chats Build Strong Teen Relationships.

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The post Five Ways to Teach Your Teen About Money first appeared on Help Your Teens.

This new-found independence should also include money management skills, but many parents fail to teach their teens about money-saving habits and financial independence. When your teen is ready to leave the nest and step into the adult world, make sure he has the skills to be successful.

Start a Savings Account

Many checking accounts come with debits cards, so teens can have a sense of independence when it comes to managing and spending their money. You can rest assured that your teen will not be making unnecessary purchases, as a variety of banking providers, like Wells Fargo, for example, offer tools that allow parents to set daily limits on debit card purchases and ATM withdrawals. Although this might seem to be encroaching on his independence, keeping a watchful eye on your teen’s finances will ensure he practices wise spending and saving habits.

Create a Budget

Teens are impulsive. This is especially true when it comes to spending money. During the teenage years “wants” surpass the needs. But, as your teen approaches adulthood, it’s wise to teach him about budgeting and distinguishing between his “wants” and “needs.” First, show your teen how to set up a budget by using categories. This can include food and entertainment expenses like concert or movie tickets, for example. Then, identify which unnecessary items can be cut from the budget. Outlining your teen’s budget can give him a new perspective of his spending habits. The app P2K Money can help you and your teen successfully plan and keep track of a budget.

Keep a Money Diary

Similar to a budget, a money diary can help your teen keep track of his purchases. For many teens, this is as simple as keeping a handwritten journal of all income and expenses. Have your teen write down how much money he has from odd jobs, allowance, gifts and his part-time job in addition to what he is spending it on. Additionally, you can encourage your teen to save important receipts inside of the diary to keep track of big purchases. Having a money diary and writing in it regularly will help your teen make money management a priority.

Make Them Pay the Bills

No, we’re not talking about the utility bills or the mortgage. However, teens should have some sort of bill paying responsibility during their final years at home. If your teen is earning money from his own job, give him a small taste of the real world by having him make a monthly payment to you for his portion of the phone bill. Many teens cannot live without their smartphone, so although he might not want to pay at first, most teens will eventually be willing to pay for this luxury.

Or, if your teen has been waiting to upgrade his smartphone to the new Galaxy, show him how to create a budget, save for the phone and document the purchase in a money diary. This simple method can be used for many big purchase and it’s helpful when teaching teens about financial independence.

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The post Financial Independence Lessons Every Teen Should Learn first appeared on Help Your Teens.