Management of personal finances is something that has to be taught, and teens are often financially clueless. Teens generally don't know a thing about saving, investing, paying debts or budgeting. Parents can teach their children to have the right attitude about money and to become financially responsible adults. Discuss your values and attitudes about money and how you divide the family budget, and your teen will learn from observing. Teach your teen how to save as well as how to spend, and they will learn about money management from experience. Share with your teen the ways you save money and make financial decisions.
Teens don't have to pay bills, taxes or the mortgage, but they should know that part of the family income goes toward paying debts and monthly expenses, not just shopping. Give your teens an allowance to cover their personal expenses, and encourage them to keep tabs so that they know exactly how much they spend. Make them understand the importance of spending wisely. Parents have to teach their teens how to shop around for the best prices before they make a purchase, and how to distinguish between what they want and what they need.
Emphasize the importance of saving for the future. Teens have to realize that they must limit their spending, and take into account emergency and unexpected situations. Discuss college expenses with your teen, and talk about how you will pay them, and what their part will be. Encourage your teen to work and save part of the money they make. Teens need to know the financial significance of investing their money and planning ahead. Another important lesson on the way to becoming financially responsible is the consequence of irresponsible spending and budgeting. Parents should be a reliable and responsible source of information about money management and how to make informed financial decisions.