How to Budget

Lauren Lyons Cole, a certified financial planner, explains the value of teaching your teens how to budget and manage money. Did you know that 65% of teenagers learn money management from their parents? Money management, budgeting and savings are lessons that should be learned as young adults. This is the time when financial habits and decision making processes are established. Teaching your kids to live within their means is one of the most important lessons they can learn. This will teach them to be responsible with money and plan out their expenses. Learning to say ‘no’ to your kids might feel harsh, but if they blow through their monthly pay or allowance, then they should learn what it feels like to mismanage that money and go without. The ‘Just Say No’ lesson will be very useful when your child goes shopping. Help them take an inventory of what they need and what they want. Give them the money to allow a feeling of independence, and let them decide how to spend the money.

Savings

Did you know that one of the most commonly neglected expenses within a budget is savings. Once all of the bills have been accounted for, many people don’t consider putting a percentage of their funds away for a rainy day or retirement. Helping your teen open a bank account is a great way to support this good habit at an early age. Educate your teen about the process of compounding interest and potential financial investment opportunities that will increase their interest. These lessons will stick – so make an impression when teaching your child about money.