by Shannon Lawrence

Created on: September 09, 2008

Teaching your teen (and even younger children) good money habits is vital to their continued success in the future. When a teenager is not taught how to handle money properly, save money, and decide when to spend it, it sets them up to get into financial trouble later on.
Many parents coddle their children when it comes to money. They hand it out when the teen asks, do not make them earn that money, and don't teach them how to take care of the money they do have. I've even seen parents still balancing their checkbooks when they are in college and, dismayingly, even later! This in no way teaches them how to take care of themselves in the future, and it sets them up for failure and lack of self-dependency.

When a child becomes old enough to go out and spend money by themselves, it is time to start teaching them good money handling. First, you must teach them that money is earned, that it is finite. As they say (and for a reason), money does not grow on trees. It is very important that your teen understands this. Giving them ways to earn money, rather than just handing it out to them will help prepare them for the working world. It will also help them to curb their spending, knowing mom and dad won't just hand them another twenty when they run out and want to go see another movie.

Second, they must learn to keep track of their money. Banks offer many children's programs these days, so setting up a checking and savings account for them early on has many benefits, not the least of which is that they have a way to learn how to do their own banking and tracking. Don't just run to the bank yourself and deposit their money; take them with you. Let them do the transaction and enter it in their checkbook. They should have a safe place for their checkbook and keep track of it and their spending. My school actually taught us how to balance a checkbook in fifth grade, which took the fear and unknowing out of it once I got to have my own checking account.

Third, they should have a savings account long before they hit their teenage years. Both of my children had one as of birth, and all money given to them as gifts goes directly into that account. As they get older, they will get to keep a portion of it, but will put the bulk of it in their savings account. As teens, with or without jobs, they should be encouraged to continue putting at least 50% of their money into savings, whether for college, saving for a car, or long-term savings and emergency funds. You may even go so far

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