How do we get our teens to be responsible and pay for their own luxury items. With the cost of car insurance, cell phone, gasoline and entertainment rising, many of the nations teen are being told by their parents that they need to help pay for these expenses.
So what happens if junior does pay? Many times the bills are in the parents name and the teen is supposed to pay the parent. When the bill comes and junior doesn?t have the money the parents budget gets busted. Is the teen just trying to get out of paying? Chances are that he has not been taught how to budget. He has an income and the ability to pay, but somehow, like many adults, the money is not there when the bills come due.
Have job ? will budget
A good accountability system to put into place is the budget. If your teen has a job and expenses, then he needs to know how to budget. This skill will not only help him to pay you on time, it will make his life easier later on. Sit down with your teen and list their income at the top of a piece of paper or spread sheet. List their savings goals and expenses down the left hand side. Prioritize the spending the income. Savings and giving come first and then the expenses in priority order. Spend the income on paper until it is at zero. Adjust the numbers to make everything balance or delete some expenses, such as entertainment or cell phone. Now there is no excuse for missed payments because you are on the budget! You may find that the teen has too many expenses for his income. If you can?t afford it, don?t subsidize him! This is practice for real life. The teen may need to give up some expenses or get another job.
Future Benefits
By helping your teen to balance a bank account, budget his income and learn how to save and give, you are pointing him in the right direction for succeeding in the real world of personal finance.
Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area by coaching, writing and teaching.
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Source: http://www.gerkenfinancialcoaching.com/2013/04/should-kids-budget/
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