Every parent wants their teen to grow into a financially responsible adult. Thankfully there are steps you can take to help them prepare for financial independence now—before they leave the nest and head out into the real world.
1. Let Them Earn An Income
Kids learn best by doing. If your teen is old enough, let them get a part-time job either permanently or temporarily during school breaks. If they’re not quite old enough (or too busy with extracurricular activities), give them an allowance each week for completing chores around the house.
Letting your teen earn their own income is exciting. It teaches them about taxes, gives them their own spending money, and helps them become a more responsible and independent person.
2. Help Them Set Financial Goals
Once your teen has some income to work with, help them set financial goals. They may want to save for a car, some college expenses, or even a post-graduation trip with friends. Whatever it is, help them calculate how much they need to save each month to reach their goal by a certain date. Helping your teen set concrete goals helps them visualize the importance of saving—and can encourage them to weigh the opportunity cost of buying something now versus saving it for later.
3. Show Them How To Track Spending
We all know how little purchases can add up to huge expenses over time. Coffee on your way to work. Take-out on your way home. A small purchase on Amazon. Before you know it, $100 is out the window.
Your teen can keep their spending in check by tracking their own expenses. As a tech-savvy teen, they’ll likely find a budgeting app more appealing than using the old pen-and-paper method. A quick online search will reveal several apps out there that can help your teen stay on top of their spending and track expenses in real time.
How We Help
Teaching your teen the importance of financial independence is no easy feat. But if you put in the hard work now, they’ll be less likely to depend on you financially in their 30s and beyond. At Fiduciary Wealth Management, we’re dedicated to helping you and your teen reach financial success. If you’d like to chat with a trusted professional about your current financial situation, we invite you to schedule a phone call now.
About Rocklin Senavinin, CFP®
With over 20 years of experience in the financial planning industry, Roc has dedicated his career to helping individuals live comfortably in retirement and enjoy the assets they have spent their career building. He is co-founder of Fiduciary Wealth Management, a fee-only registered investment advisory firm in Little Rock, Arkansas. As a CERTIFIED FINANCIAL PLANNER™ professional, he has advanced training in the holistic process of creating a personal financial plan that addresses a person’s comprehensive needs for the short and long term. To learn more, connect with Roc on LinkedIn or visit www.fidwm.com. If you have questions, feel free to schedule a phone call using this link.
The views expressed represent the opinions of Fiduciary Wealth Management, LLC and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person.
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