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Teen Talk: Personal Finances and the Economy (page 2)

Teen Talk: Personal Finances and the Economy

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Updated on Dec 3, 2008

Family Goal Setting

Setting financial goals as a family can be a great way to solve a current money problem and involve the whole family in cutting back on spending. Goals can be small (paying off a small credit card balance), or large (saving for a family vacation). “The idea is to get children and parents to work together toward a common financial goal,” Peterson says.

Bill Paying

Paying bills will help teens develop healthy financial habits. Recording debit card receipts, balancing the family checkbook, and understanding the household income and expenses will prepare teens for the future by learning important money management tools.

Teen Credit Cards

If teens have credit cards, they should be responsible for paying the bills on their own. Credit cards can be a good way to build teen’s individual credit, but parents should set ground rules about acceptable purchases and a monthly limit. There should be a clear understanding that the credit card will be taken away if the rules are broken.

Teen Jobs

When teens have jobs, it’s important to discuss upfront how that money will be spent. Parents should help children budget their money—how much they will save (and to what end), how much they should budget for entertainment, car payments, etc. It’s also important for children to be responsible for their own money. Teens should not give their checks or cash to their parents to deposit; they should have their own bank account and should deposit and withdrawal money on their own. This will give them a true sense of ownership and responsibility. In cases where children’s income will be contributing to the household income, this should be made clear from the outset.

Allowance

Parents can use allowance to help young children learn about the power of budgeting. Kids learn that they can spend their allowance weekly on small treats, or they can save their quarters or dollars for a special larger purchase.

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