Give your employed teen a lesson in money

I’m a long way from having one of my daughters get her first job, but as fast as they seem to grow, that day will be here soon enough. That’s why I love finding advice that I can hold on to for when my girls are older.

I stumbled upon some great advice from Money Magazine’s Linda Stern that focuses on parents of teenaged children who may be getting their first job. In her article, she points out that it is the perfect opportunity to start teaching your teen how to manage their new source of income.

Think about it. They have gotten their first job and are bringing home a steady paycheck. Now, they have to learn to take care of that money, and as the parent, you’re the best person to teach them.

Stern points out four key pieces to this talk:

  • Taxes. Yes, you’ll have to talk to your teen about taxes. Go over their paystub and explain how much is being withheld and why. It may seem a little nonsensical, but it will help.
  • Banking. You’ll want to take your teen to the credit union and help them set up a savings and checking account – ideally, you’ll find accounts specifically geared for teenagers.
  • Saving. Teach your teen that there is nothing more rewarding than saving up for a big ticket item he or she wants. Show them how easily it can be done.
  • Micromanaging. Don’t do it. It’s that simple. Keep in mind this is their money, and your job is to teach them how to be responsible.  Sometimes, learning from a mistake is a good a lesson.

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    All in all, it’s very good advice. For those of you who have recently had teen kids, what other lessons can you share?

    Post in the comments, on Facebook or Twitter!

    -Jason

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    This entry was posted on Thursday, July 8th, 2010 at 10:01 am and is filed under news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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