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Financial Provision: How to Teach Teens the Value of a Dollar

Raising children is a huge responsibility. Part of that responsibility includes teaching children life lessons that can help them excel as an adult. One of the most important life lessons you can teach a child is the value of a dollar. Whether it is saving money, budgeting or borrowing, managing finances is an extremely important part of being a well-adjusted adult. Below are some strategies you can use to teach teens the value of a dollar.

Force Them to Work for Money

One mistake many parents make is simply doling out a weekly allowance. This can produce children that think they are entitled to money without little thought about where that money comes from. One way to force them to be more cognizant of the fact that money only comes from work is to force them to work for every dollar received. Whether this is an allowance paid from chores or an actual high school job, that choice is up to you.

Force Them to Save

However, the money that your teens make shouldn’t all be spent immediately. Teenagers certainly have a habit of doing that. Instead, you need to teach them that saving is almost as important as making the money in the first place. Open savings accounts for your own children and require them to deposit a decent sized percentage of their earnings into those accounts.

Force Them to Pay for Their Own Car

Being an adult also requires making large purchases. Many of these purchases must be made by saving up over long periods or by taking out loans that have to be paid off over months and years. If you want your children to get real experience with this process, force them to pay a large portion for their own car. While you may want to contribute some of the funds when purchasing a new car, making them pay for part of it can give them a better sense of the work that is required to invest in something significant like a car.

Teach Them about the Danger of Credit

CNBC reported that 80 percent of Americans are in debt. Poor spending and borrowing habits are a huge danger even for teens. Make sure your children understand how credit, interest, and loans work and why it’s best to pay off debt as early as possible.

Overall, responsible parenting means teaching children how to handle their finances. This is one of the most important lessons you can teach a child. If they are able to handle their finances with utmost care in the future, they are sure to live much happier lives.

Tim Esterdahl

Tim Esterdahl is the editor of IFCS blog. He is a married father of three and enjoys golf in his spare time.

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