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Financial Literacy-Teens

Teach Your Teen the Basics of Financial Literacy

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Katie Conroy

Katie is a guest author on our site.

Financial literacy is a vital skill that isn’t always taught in the classroom. According to a study from the University of Wisconsin-Madison, less than 20% of classroom teachers felt “very competent” teaching personal finance basics. Parents may have to take the lead in teaching their teens about financial literacy. Here are some strategies that may help.

 

Open a Savings Account

One of the best things parents can do for their children is open a savings account. You’ll need to shop around at different banks to find a savings account that offers the highest interest rate. It’s also important to have a low minimum balance requirement and inexpensive monthly fees.

 

Provide an Allowance

Another way you can help your teen with financial literacy skills is to give them an allowance. Set aside a few dollars a week for your teen and have them practice making a budget and saving. You can tie your child’s allowance to weekly chores to give them practice earning their money.

 

Involve Them in Shopping

Teens can also get an idea of how money works in your household budget if you get them involved in your shopping process. Model disciplined money habits in your family budget so your teen can follow your example. Let them help with weekly grocery store shopping and big purchases, such as a new car.

 

Get Them a Part-Time Job

The next way you can give your teen more financial literacy knowledge is through a part-time job. Help your teen get a job in the summer or on the weekends during the school year and let them earn their own money. Help them save up for college or a car with some of their earnings and encourage them to budget. You can also teach them about their credit score and how they can work to improve it.

 

Help Them Start a Small Business

If your teen has big ideas and a strong work ethic, they may find success by starting their own small business. Some possible business ideas include e-commerce, blogging, and dog walking. Parents can support their teen entrepreneurs and also help them stay focused on their educational responsibilities and other activities.

 

Set Financial Goals

You can also teach a lot about saving if you encourage your teen to set financial goals. Help them save up money over time to purchase items like a new phone or concert tickets. Let them make decisions about spending and saving their allowance or job earnings.

 

Play Money-Related Games

Budgeting and financial literacy can also be taught using fun games and activities. Play a few rounds of Monopoly, the Game of Life, or Payday to help teens understand how household finances work. Also, check out free online games or video games that encourage sticking to a budget and saving.

 

Teach Them About Investing

You can extend your financial literacy lessons by helping your teen create an investment plan. Start small by investing a little bit of money into the stock market and have your teen learn about different investment options. Teach them the basics of the market and buying and selling shares so they can get excited about the prospect of growing their money.

 

Parents can help their teens prosper in the future by teaching them about financial literacy. Help your teen develop healthy financial habits in earning money, saving, and spending so they can reach their future financial goals as an adult.

 

For virtual financial coaching and tax preparation, trust the experts at Desert Financial and Tax Services.

Desert Financial and Tax Services provides financial guidance and tools to aid individuals in becoming debt-free. Contact us today for more information! (928) 315-0040.

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