When we think of our teenagers learning life skills, we often think of other ‘rites of passage’ like learning to drive, getting their first job, and doing their own laundry. But when it comes to budgeting, this is a skill that is often left to learn once they enter adulthood, which can be a disadvantage when setting long-term financial goals for the first time. As adults, we know from our own experiences the life lessons we’ve learned in adulthood can stem from the skills developed as teenagers.
While many teenagers tend to focus on the here and now in life, we can encourage our teens in developing this important life skill by applying budgeting to the milestones they will experience during the current season in their lives. Open the conversation to budgeting by asking questions about their short and long-term financial goals. These goals may be anything from saving for their first car to gain more independence, saving up towards a class trip, or managing their expenses to spend extra time to spend with friends or towards their interests and hobbies.
Another way to encourage your teen in their budgeting is by introducing realistic financial responsibilities. These responsibilities can include contributing to household expenses like helping out with their car insurance or their portion on the families’ cell phone plans. By doing this, your teen can get a real-life example of how to put budgeting to work as they balance the concept of spending and saving towards their wants and needs.
Whether your teen is earning an income through a part-time job, babysitting, or household chores, they must develop the concept of budgeting as a life skill to best prepare them for a successful financial future well into adulthood. Want to dive deeper into budgeting with your teen? Check out our Budgeting Basics video straight from out Money & Beyond Jr. page.