Teaching Teens How To Master Money Skills
(NAPSI)Teaching your teenager the basics of personal
money management may just require some dollars and sense.
A good place to start your youngsters financial
educationat almost any ageis with an allowance, according to Susan Molinari,
National Chairperson of Americans for Consumer Education and Competition. An allowance can
be used to teach such money management basics as budgeting and the consequences of saving
and spending decisions, says this mother of two and former member of congressional budget
and education committees.
Molinari points out that 21st century parents, thanks to the
wide variety of payment forms available in the modern financial marketplace, have far more
effective and safer allowance options at their disposal when it comes to teaching
financial literacy than did their parents, who were essentially limited to cash.
Todays allowance, she said, can
consist of one or more of a variety of such payment forms as checking accounts and debit,
credit or prepaid cards. These alternative forms of cash allow parents to set spending
caps and afford them a greater opportunity to encourage responsible spending and saving
No matter what form an allowance takes, Molinari
stresses, the key to its success as a teaching tool is a clear upfront understanding
of the ground rules for its use and ongoing communication between parent and child.
It is important, especially for teens that the rules are
flexible enough to allow youngsters to make their own financial decisionsboth good
and bad. It is how we learn. It is also essential to the success of this educational
effort that the allowance be used as a teaching carrot and not a disciplinary stick,
Here are some other tips from ACEC to help improve the
financial fitness of your teen:
Work with your teen to develop a realistic budget, set
long and short-term financial goals and plans for achieving them.
Discuss the difference between must-have
purchases today, such as school supplies and would like to have purchases such
as the addition of the latest fashion to an already adequate wardrobe.
Explain the advantages of deferring purchases today,
such as the latest computer game, to save for another desired item, like a car or college
Promote shopping around before making purchases; it
generally assures a better deal and discourages impulse buying.
Encourage the use of a computer or a ledger to track
income, savings, expenses and debt.
Use financialchecking account, credit card,
etc.statement reviews as a teaching aid to evaluate spending habits, promote sound
financial practices and to instill good fraud review practices.
You can learn more about personal finance and financial
planning by logging onto ACECs Web site at www.acecusa.org/learn/.
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