Teaching Your Teenager About Money and Bills

Steps to help your teen learn financial independence

It may seem like too general a statement, but most teenagers are clueless when it comes to money. However, no child should remain in the dark about finances, and it is really up to parents to teach their teens how to pay bills and other valuable financial life skills.

While some teens may be financially savvy, many are not. Helping your youngster get acquainted with the real world by having him pay his own bills can help foster a bright, confident and fully functioning money manager. Your teen may be resistant at first but before long will feel empowered. This skill will be especially helpful if your child plans to go away to college or relocates for a job.

Here are some prudent steps to get you going:

Hit the bookstore. The financial section of any decent-sized bookstore has many offerings aimed at helping teens with their finances. Reading a publication together can reap benefits for both of you, helping the entire family get a better handle on finances.

Hold family financial meetings regularly. Show your teen your household budget, if you have one. Discuss the costs involved with running the house, including the mortgage, clothing, groceries, utilities, etc. If your teen has a part-time job, ask for a small contribution to one or more of these expenses each month. This will also help her learn the value of a dollar, and perhaps she can practice check-writing skills, too.

Open a checking or savings account.

Set up a savings account and, when your teen gets a job, a checking account. If your teen is agreeable, encourage family and friends to give money as a birthday or holiday gift, and have your child deposit most, if not all, the money into the account. Also, if your child receives an allowance, have him deposit some or all of that money into the account. You might offer an allowance increase in exchange for doing extra home chores, which can be mutually beneficial.

Teach check writing and checkbook balancing.

Discuss how to manage your checkbook or personal finance using a software program such as Quicken. If you pay bills both on- and off-line, have your child participate by letting her write some checks from your checkbook (which, of course, you sign) and/or pay some bills online. Demonstrate how to check statements and balances online at your financial institution’s website. Just remember to keep your password to yourself, and always supervise your teen’s bill-paying actions. Also, show your teen how to reconcile the checking account. Then let her give it a try.

A car is an incentive.

Many teens look forward to getting their first car in high school, and this can be a real opportunity and motivator for teaching bill paying and money management lessons. So resist the urge to buy your teen a new car, even if you can afford it. Instead, consider matching savings toward a used vehicle. Discuss beforehand all the costs associated with car ownership, including monthly loan payments, auto insurance, gas, routine maintenance, roadside assistance, etc.

Watch TV.

In 2010, PBS released a program hosted by actor Donald Faison titled “Your Life, Your Money.” Faison relates his own financial challenges after winning his first acting role. The program is aimed directly at teens, and through stories of both celebrities and ordinary young adults it covers topics including making (and keeping) money, digging out of debt and getting insured. You can watch the program online at www.pbs.org/your-life-your-money.

Teaching your teen how to pay bills and other valuable money management skills can go a long way toward helping your child both now and in the future. Try to make the process fun and rewarding, and also let your teen know how proud you are of his or her efforts. You can also visit our BeMoneySmart.org webpage for more information on UCCU’s youth programs that help teenagers continue to be savvier with their money.

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