by Tina Loflin

Created on: October 27, 2008   Last Updated: November 04, 2008

Learning how to manage money is important for everyone, but for teens, it is a major step in becoming a responsible adult. Teens can do this best by having a parent establish a checking account at a local bank, and teaching a child. A good time to start when he or she iis young, perhaps in the tween years, the age between ten and twelve. Taking young ones to the grocery store and showing them how to shop wisely is part of this grooming on money matters.

The checking account, started in the early teens, perhaps when he or she has a first job, will pinpoint techniques on saving and budgeting to the novice and the notions of debit and credit emphasized. At this point in a child's fiscal life, he or she may have no real concept of how money is handled, and how quickly it can fritter away. A credit card would not be a good thing at this point for that reason.

The concept of credit has to be handled carefully; too many horror stories of people spending beyond their means have surfaced in the news, and a young teen isn't really apprised of the fact that a credit card is just that: credit, money borrowed at an annual percentage rate, to be used for purchasing goods-and that money has to be paid back, with the interest!

Monitoring a child's handling of money can offer clues as to when a child has absorbed the lessons of debit, credit, and borrowed money. Once these lessons are learned, like a child who has learned how to drive a car, then the way may be made to open a credit card account(a limited one, with the parent in control, even as a parent would be so with any vehicle his/her child might be driving). it must be done with care, and the child instructed that this money, the credit limit, is not really theirs, but the bank's, and must be used with caution. Monthly checks on the child's spending habits, regular discussions with the child, especially teaching him or her to use a ledger, balancing their books, would enrich the child's knowledge on how to use this tool.

By so proceeding, the child can come into his or her own as a responsible person. By so proceeding, the risk of having credit cards used in a careless manner may be avoided.

Unless these procedures are put into place, it is not advisable to simply give a child a credit care. Unless a parent is vigilant and careful in teaching the child, the practice of simply giving a child this tool is risky at the very least, and unwise.

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