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Teaching Teens To Save Money Before They Head to College

Before your teenager leaves for college, it is important to teach them valuable money skills so that they learn not only how to take care of themselves, but also how stay out of debt. If you teach your teen how to make smart money choices, it can have a lasting impression on their financial future.

If your teenager does not already have a savings and checking account, you will want to make sure that they get one. A checking account will begin their money responsibilities and can help them learn the importance of a budget. It is also valuable for your teen to open a savings account. Teenagers need to know the importance of saving, so that they are able to make big purchases in the future.

Show Teens Where Your Money Goes

Once your teen has bank accounts, sit down and show them examples of your financial statements. Show them your bank statements so that they get an idea of how many bills that you pay monthly. Also show them documents such as your credit card statements. You want to point out things like the annual percentage rate, and amount of interest. Many teens do not realize how much extra money using a credit card costs. If you show your teen this, they will be more likely not to use a credit card while at college. Recommend that they only use a credit card for an emergency situation. Stress the importance of saving money so that they are able to make a purchase, such as a new phone, when they want one. By doing this, your teen will likely enjoy their new phone better than if they had charged it on a credit card.

Start Good Money Habits Early

You should also explain to your teenager how important it is to start saving early in life. If you explain the value of saving early, chances are your teen will continue to save throughout their life. Teach your teens that it is important to always save for things such as emergencies and retirement. As your teen becomes more knowledgeable about money, they will begin taking steps to create a smart financial future.

Many families do not discuss money management with their teens, and then teens make money mistakes when they are away at college. Teach your teen the importance of budgeting and good money management. This will ensure that they make smart financial decisions as they continue to grow up.

If you college student gets into trouble or finds themselves on the verge of trouble, Advantage CCS can help set them up on a budget and work out a debt management plan. Our non-profit consumer credit counseling services are available online, in person, or on the phone.