Social media and influencer culture can have them feeling like they’re trying to live a fantasy life and have them ready to spend anything to get it. How can you protect your teen and help them make smart financial choices? The best way is to teach them good financial habits, but what are good financial habits, and how do you teach them?

What ARE good financial habits?

Like it or not, the best way teens learn is by imitation. If they’re used to seeing you make good financial choices, they’ll likely pick up those habits themselves.

Here are six good financial habits you can adopt yourself and help your teen implement for themselves:

1. Pay to savings first 

Treat saving like paying a monthly bill. Schedule a payment to your savings account that comes off automatically. This way, you’re using systems to create a habit for you.

2. Keep a note

Track your spending! Whether you use a notebook, an app, or collect receipts, make sure you know where your money is going every month. Try using a free app like Mint, which categorizes your spending, can connect to your bank and credit cards, and can help track income, expenses, and savings goals.

Alternatively, you can try an app that’s designed for beginners, like GoodBudget, which will help you divide your income into different categories so that you can plan your spending. It will also let you know how much money you have left in each category before your next paycheck. This is a great way for your teen to keep things digital and put their finances where their attention is, their mobile phone!

3. Make saving the goal, not spending

When you focus only on spending money, you’re likely going to overlook the value of having a safety net. Life is unpredictable, so make your goal to keep your money by default, and develop a habit of congratulating yourself (and your teen!) when you save money.

4. Divide and conquer

Keeping all your money in the same place is not going to help you save. If your teen can access it, they’re going to want to spend it! Open an account for spending and an account for saving. You can find a list of credit card for teens that allow spending on one account, while keeping savings separate.

5. Save little, save often

You don’t need to put away all your money, but try to put something away as often as possible, no matter how little. The more you and your teen get into the habit of putting money away, the more you’ll have when you really need it.

6. Live within your means (The 50/30/20 rule)

Allocating percentages of your money is a great way to make sure that no matter what you earn, you’re always maintaining good financial health. This system lets you spend money on things you want, without letting your spending get out of hand. The 50/30/20 rule is simply allocating:

• 50% of your money to “Needs” like mortgage, car, utility, or insurance payments,
• 30% of your money to “Wants” like dinner, movies, vacations, or anything that isn’t necessary, but that costs money to make your life more enjoyable,
• and 20% of your money to “Savings”, which can include debt repayment, IRA contributions, or simply deposits into a savings account.

You won’t learn good financial habits if you don’t make any room for enjoying the fruits of your labor. That’s why it’s a good idea to allocate a percentage, not an amount of your money, to the things you want. The trick is: allocate before-hand and stick to it!

How to Get Your Teen on Board 

It may not seem like it, but teens crave boundaries. When they are growing up, they are experiencing all of life for the first time, and it can be overwhelming.

It’s normal for teens to test their boundaries by acting out to see where the lines are, whether they’re doing this consciously or unconsciously. The most important thing you can do for your teen is be consistent.

Consistency creates a boundary, not a rule that can be bent or broken.  Boundaries are what help teens self-regulate their behavior. Implementing good financial habits with your teen can be approached by setting down some options for them to choose from, instead of demanding that they be more responsible or trying to control their behavior.

Prepare Some Options

If your teen sees that you’re putting effort into helping them, they’ll likely take your suggestions more readily. Often, teens will reject doing something because they have no idea where to start and don’t want to be embarrassed by admitting it or trying and failing. Here are some lists of options you can prepare for your teen:

•         A list of part-time jobs that are available for teens
•         A list of budgeting or spend tracking apps
•         A list of saving accounts (like starter investment accounts, mutual funds, or interest-earning accounts)
•         A of banking options that don’t charge bank fees
•         A list of potential financial goals (and a plan to help them get there!)

Working with your teen can help set them up with good financial habits that they can carry into their future as adults, and one day they may even thank you for it.

Read: Is Your Teen Addicted to Social Media?

Read: Common Reason for Teen Mental Health Issues.

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Is your teenager struggling with entitlement, defiant, depressed? Have you exhausted your local resources? Learn more about how therapeutic boarding schools can benefit troubled teens. Contact us for a free consultation.

The post How To Teach Your Teen Good Financial Habits first appeared on Help Your Teens.

Teaching teenagers budgeting and money management can be important skills that can make their life easier. If you have teens who have probably started earning on their own, teaching them how to manage money can be the most valuable life lesson you can give them as parents and guardians. So, it is always a good idea to teach them about money management, budgeting and investing. 

This article will walk you through some basic yet important points on how to talk about money management to help your teens get financial independence and feel responsibility. 

According to JJ Montanaro, a certified financial budget planner, financial literacy is a parental responsibility as important as providing food, shelter and clothes. As teenagers start reaching adulthood, there is nothing more important than learning how to spend and save, what to take into account while saving and how to budget their money. 

Parents must do the following to teach responsibility to teenagers properly:

• Learn how to inspire teenagers
•  Stop assisting and spoon-feeding them everything
• Promote excellent behaviors, provide responsibility cues
• Set an excellent example of responsibility for your children.

Start with making them understand what budgeting is, why budget matters and what budget consists of. Teens should be aware that a budget is a strategy for spending money every month. By devising a strategy and a budget plan, you can avoid being in debt and spending more money than you have. The two most important elements necessary in creating a budget are income and expenses. Teens should know how to record their income, expenses, and other funds, which will allow them to learn about their monthly expenditures. 

The following are a few steps that you can follow to make your children aware of the new ways to save, invest and devise perfect money management strategies:

1. Save for a bigger goal:

When your kids receive money from jobs, gifts or allowances, encourage them to save it. There should be a proper portion in their budget for saving money for future use. Suppose they have a big purchase goal, help them in determining two things:

• How much money they would need
• When they would need it

Give them a target amount and help them reach it by encouraging them continuously. Just like adults, teenagers should learn early to make their money work for themselves. 

2. Investing is always a good idea:

Foster your teens to invest up to 10% of their income. Teenagers can invest in a variety of ways, including:

• Investing in a company’s stock
• Purchasing a low-cost mutual fund
• Getting a high-yield savings account 
• Start a Small Business
• Invest in Cryptocurrencies

Cryptocurrencies like Bitcoin, Litecoin and Ethereum have been the talk of the town nowadays. People are accepting and investing in it heavily to get maximum profits. According to experts, the world has gone digital and cryptocurrency is the future. For keeping a better record of money, people can use a Bitcoin calculator to see the current value of investments. 

3. Give them access to budgeting tools:

Make budgeting for teens an interesting task. Give them access to tools such as spreadsheets, budget apps and budgeting worksheets. It can help by keeping them connected to their money. Once your child is able to make use of these budget apps and tools, ask them about it frequently. Help them make adjustments and talk to them about their goals. 

4. Teach them about needs and wants:

Making your teens realize the difference between needs and wants is one of the essential steps in teaching money management. Keep it simple by explaining that a need is something you can’t live without, something like rent payments, but want is something you can live without, for instance a Netflix membership. For this, help them categorize the budget they create. For example, if you are on a limited budget, you can categorize back-to-school shopping by what is necessary and what is simply a want.

Here, the main goal is to teach children to prioritize spending so that their needs are met. 

5. Put them in charge of their finances:

Instead of buying gas, clothes and other necessities for your teens, make them in charge of their own expenses. Allot a certain amount and set a target for them to follow. Keep a proper check-in starting, but you can let them do what best suits them. This one strategy may teach children more about family budgeting than they could ever learn by reading about it. That is why you need to do this as early as possible. Giving your teen a set but consistent amount of money will teach them to stick to a budget. Any blunder or impulsive buy will cost them alone. Teens will be aware that no more money will be coming in until the next pocket money or salary schedule. 

Teenagers who get money whenever they need it are less likely to be careful with their money.

6. Help Them Protect Their Assets

Teaching your children about protecting their assets is also an important part of the financial education process. According to Eiman Sharmin, an identity theft expert, and credit report litigation attorney, after you put your child in charge of their own money, it’s imperative you educate them on the potential financial threats that can lurk online or on bank statements. Identity theft and credit report fraud can happen to anyone.

Always make sure you have you have your child double-check with you before they enter any personal information online. In addition, have them shred any old bank statements and protect any personal documents in a secure place. Typically, a child under the age of 18 won’t have a credit report unless someone has used their information for fraud.

An easy way to find out if someone is using your child’s information to commit fraud is to check if your child has a credit report. To do that, contact the three credit bureaus (find their contact information at IdentityTheft.gov) and ask for a manual search for your child’s Social Security number.

Read  7 Tips You Can Start Using Now to Help Your Teen Gain Financial Success.

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Contact us if you have exhausted your local resources of your troubled teen. We help you make smart decisions for teen help programs, therapeutic boarding schools and other options for struggling teens.

The post How to Teach Teenagers About Money Management first appeared on Help Your Teens.