Does your teen live by the financial philosophy of  ‘buy it now’, and ‘somebody’ will pay for it later? Are they too young to have their own credit cards yet old enough to spend hundreds of euro online each year? Here are 11 Essential Money Management Tips for your Teen you’ll want to read.

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Teens today are growing up in a world where it may be harder for them to find secure jobs, where education and housing costs could create large debts and leave little scope for saving. So it is more important than ever to teach our teens money management and financial responsibility.

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How to Teach Your Teen Money Management Skills

#1. Start Early

Children learn more from what you do rather than what you say. Ways you can start teaching them through actions include:

• Shop with a list and stick to it, resisting impulse buys.
• Let your children see you saving towards treats or big ticket items, be it a family day out, a new pair of shoes or a family holiday.

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#2. Regular Money Saving

Teach your teens the value of regular saving. Agree with them an appropriate savings plan, a fixed amount each week or month, which they will lodge to a secure account. Developing this habit could be one of the most important life skills you gift your teen.

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#3. Saving and Spending Patterns

Just as there is a time to save there is also a time to spend. Set realistic saving goals and spending limits for your teen. Let them see that saving their money gives them to freedom to purchase what they really want e.g. a laptop, some new clothes, or Christmas gifts for family and friends.

#4. Promote Financial Independence

Teens strive for their independence, but parents worry about their ability to cope with that new-found independence – it’s a vicious circle!

Start to encourage your teen’s financial decisions by supervising their saving and spending habits, and having open conversations about debt, interest, overdrafts, credit cards and hidden charges your teen may encounter.

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#5. Set and Stick to a Monthly Budget

Teach teens to live within their means, and that their income should not be their targeted spend. Cash gifts for birthday or Christmas can be regarded as the equivalent of a work bonus later in life – not dependable regular income, but a welcome addition to the rainy day fund, or to put towards a larger investment purchase.

#6. Card Fraud & Identity Theft

The issue of card fraud and identity theft amongst adults is widespread, but teenagers are even more at risk, as they simply do not have the experience to shop freely and unsupervised online.

Educate your teen on how to protect themselves as much as possible: not to share their card, bank or personal details with anyone or online; only shop from secure and verified websites; keep a close eye on their online banking or bank statements to ensure there are no fraudulent charges; speak up if they aren’t sure about something.

#7. Manage on a Limited Budget

We all live on different incomes and budgets. Ensure your teen creates a positive attitude to and relationship with money. What you have does not define you, how you manage what you have may do. Teach your teen to take pride in their ability to manage on a limited budget, look for bargains in sales, or cheaper alternatives, or simply saying no when a particular expenditure is not justified.

#8. Don’t Bail them Out!

The Bank of Mum and Dad is a finite resource, and teens can’t expect their overspending to be rewarded with refunds from their parents. Teens need to understand that with freedom comes responsibility, and if they overspend they have to face the consequences – like no phone credit for a few weeks or missing a night out with friends due to lack of funds.

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#9. Match Saving to Encourage the Savings Habit

If your resources allow, you can incentivise the savings habit by matching their savings at the end of each month or quarter. This can really encourage savers as they can see their savings grow more quickly and reach their targets more easily.

#10. Get a Job!

Nothing will teach your teen about the value of money more that if they have to earn it themselves. If they are finding it hard to get an after-school or summer job, encourage your teens to think outside the box and perhaps generate their own income. Do neighbours need gardens tidied, or their pets cared for, or are there opportunities for babysitting? If your teen is creative perhaps they can take a market stall selling their creations?

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#11. Teach the Art of Thrift

Teach your teen that value rarely lies in a price tag, true value lies in thoughtfulness and the time you give to a person or project.

• Reuse and re-purpose items e.g. dye tops or t-shirts, cut old jeans/trousers up to make shorts, add embellishments to clothes/runners to change appearance etc.
• Visit charity and second-hand shops with them.
• Make thoughtful gifts for friends and family.

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Is money management something your teen is confident or struggling with? Leave a comment below and let us know – we’d love to hear from you!