by Shana Carlton

Created on: November 20, 2009

With all of the ways to get credit cards and cash advances, you do not want to risk your good credit if your teen gets into financial trouble. Teaching your kids how to save and spend money responsibly helps to get them prepared for handling their own finances.

Start teaching your kids about saving money as soon as they start getting any kind of allowance or payment for chores around the house. Something as simple as budgeting for purchasing a special treat for themselves. Teaching young kids how to handle money makes it a little easier to reason with them when they get a little bit older.

With summer here many teens will be taking on part-time jobs for extra spending money. Teens have a number of possible expenses such as: car payments and insurance, gas money, clothes, and entertainment.

If your teen is not familiar with the concept of paying taxes, it is up to you as a parent to help teach them where their money goes and why. Encourage your teenager to set aside some of their earnings to place into a savings account each time they get paid. If they do not have a savings account, you could help them set up one and show them how to take care of it and read their monthly financial statements. No one is too young to start learning how to "save for a rainy day".

Sit down with your child and help them figure out their weekly and monthly expenses. This will help them understand how to budget for any upcoming expenses. Include any wages or allowance into the monthly income amount.

Discuss with your teen the necessary expenses that they must account for and show them how to check their expenses against the income they receive monthly. They must figure in all of the required expenses before they can see how much they have left for spending for their entertainment.

Teach your teen that the money they earn must first be used on necessary items such as insurance or gas before they can even think about money for extras. If your child shows good money sense and budgets well, you can always "treat" them to a movie or outing if you feel it is warranted and fits into your budget.

Teach kids how to get the most out of their money. Shopping for clothes at discount outlets, or looking for sales helps a teen realize how hard it can be when they are fully self-supportive.

While credit cards for teens is not usually a good idea, you can teach them how to read your bill, and how finance charges and fees are also a part of having a credit card. You especially want them to learn credit responsibility before sending them away to college with a credit card for expenses.

Teens need the responsibility of learning how to save money and spend within their means. You want them to learn to keep themselves financially stable before they are grown and out on their own. When your teen becomes an adult you will be happy to see them be able to make it on their own without the burden of financial worries.

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