by Erik Van Tongerloo

Created on: October 28, 2009   Last Updated: October 29, 2009

Financial planning is already difficult for adults and it is often a forgotten subject in many schools today. The importance of teaching teens the basics of financial planning may not be underestimated and it is best they learn the ropes of financial planning from their parents. Saving, budgeting, setting goals, the use of credit cards and how to spend money are issues which can help them in their further life.

It is not an easy job and maybe you best start with teaching them the concept of money. If they don't know why they need money and where it is used for, they will spend every penny they have. You can best start as soon as possible because once they develop a habit in saving; they will easily understand the ropes to setting goals in life.

Here are some tips which may help you to teach teens the financial skills they need to know about financial planning:

*The concept of money

Teens need to know where money comes from. It is important they know people have to work for money and is used for many purposes in life. People need money for living expenses and everything they want to buy. It is important they know that they can't buy everything they want. It is important they understand they can't spend more than they possess and need money for some goals in life.

*Saving

Kids will easy understand they can buy things with the money they have but it is important they can't get all the necessary money at once. They need to save for buying more expensive goods and it is really important they understand the benefits of saving. For example, saving in a savings account offers a certain amount of interest dependent on the interest rate you have. If they understand that money makes money, they will likely learn to save and discover they will have after a time more money in their savings account than they transferred to this account.

*The habit of saving regularly

It is important they develop a habit of saving regularly. You can best teach them to save a certain percentile of their pocket money in a savings account. It is important they realize why they save and that they will only get the necessary money they need for buying something they like after several months. They also need to know that even they have saved this amount they can't spend all the money in their savings account. They need to know some things in life can happen where they need money for and it is wise to teach them the need of a financial safety net.

*Paying bills and cutting down expenses

It is important

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