- Step 1: Model behavior Model the behavior you desire. Get your house in order and discipline yourself before you curb them, so that your advice and counsel has credibility.
- Step 2: Say no Say no to your teen. Many parents lack the gumption – don’t be one of them.
- Step 3: Control their spending Help control your teen's spending by educating them about wants and needs. Allowing them to have a credit card only temporarily forestalls the conversation about responsibility.
- Step 4: Use allowance Use allowance as a tool through which they can experiment with their own money, allowing them to suffer the consequences when money is wasted. The results will be priceless.
- TIP: Many financial companies offer services for monitoring your teen’s credit card account.
- Step 5: Teach planning Teach them to plan, which may include getting a part-time job to purchase desired objects.
- Step 6: Help them make a budget Help them develop a budget, teaching them to acknowledge each expenditure and to organize their basic material desires.
- Step 7: Set saving goals Set goals for a savings account aimed at future needs like college, trips, and marriage. Agree to reinforce this with small matching contributions on your part.
- TIP: Teach sound investment strategies to your teen, or have someone who knows what they’re doing help.
- Step 8: Allow a pre-paid card Allow the teen to have a prepaid debit card instead of a credit card. There is no government bailout authority that will reinforce poor money management for your family.
- FACT: By 2008, over 91 million U.S. households had at least one credit card.
You Will Need
- Planning skills
- Savings account
- Prepaid debit card
- Sound investment strategies (optional)