Teaching Proper Spending Habits To Your Teenager

Learning how to make wise spending and purchasing choices takes some practice. Most adults have had to learn the hard way, through trial and error, and our recent financial history reveals enough error to last a lifetime. So it’s more important than ever to teach our youngsters the value of money so they don’t repeat the same mistakes. They also need to be taught smart money management techniques and habits.

The foundation for making proper spending decisions is learning how to make and maintain a weekly or monthly budget. There’s just no substitute for having a complete understanding of exactly how much money you bring in and how much you spend every month. Without a budget you’re operating in the dark. With one, you’re able to build and prosper.

That’s why I’ve started to include my teenager in my weekly budget and bill-paying sessions. Once a week, I deal with all the bills and correspondence that comes into our household. I handle the planned for expenses and deal with the unplanned ones. Everything fits into about a 90 minute session. If there are some extraordinary items that crop up, I deal with them as needed.

And although my youngster hemmed and hawed at the very idea of sitting down with the old man to look at bills, she would now agree that she’s learned a lot from the experience. She’s started to acquire real-world knowledge about the kinds of financial decisions necessary in a household. And she’s acquired some of the skills and techniques necessary to make those decisions the right ones.

For instance, she now understands that spending money is always a decision not just a reaction. Determining the true need or want is the first step. Then figuring out how that need or want fits into your budget comes next. Deciding on how you’re going to pay for it comes last. When she’s able to frame a spending choice in that way, she knows she’s made a good decision.

I’ve seen her habits change as I’ve monitored her spending with her prepaid student debit card. She has a second card on my account that I load with a small allowance and that she loads with money from a small part-time job. I can see all the funding and spending transactions she makes by viewing the account online. Over time she’s gotten much more selective about her choices where before she would run out of money regularly. Now she’s managed to grow her balance by curtailing her spending.

When I mentioned this to her she told me she was just saving money a little bit “just in case.” That’s the same language I would use at our bill-paying sessions when I would explain why I put money away each month into a special savings account. That was a pretty gratifying moment to say the least.

So teaching proper spending habits to my kid has been a big win in my household. Giving her some practical freedom with a personalized debit card has helped too. So if you can, I urge you to take the time to share your financial decisions and especially the reasoning behind them with your teenagers. It’s not the kind of subject matter taught in schools but it’s exactly the kind of knowledge they will need throughout their lives.

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