People aren’t born knowing how to use their money wisely. Even a natural inclination for frugality isn’t always the most helpful when it comes to wise fiscal choices. That’s why it’s important to actually take the time to teach your teenager the ways of the world.
Money really does make the world go round, and setting your teen up with a better understanding could help him or her thrive in years to come. High schools and colleges don’t really teach what it takes to be good with money, since many of the basic finance courses are considered “joke classes.” Here are three ways you can teach your teenager what he or she needs to know about money.
Introduce them to alternative investments.
You’ve probably been telling your teen that it’s never a good idea to “put all of your eggs in one basket.” That’s sound advice for pretty much everything in life. Don’t count on anything until you have a firm commitment. This concept applies to money as well.
Teach them the importance of diversifying their finances by using college applications as an example. Is it better to only apply to one highly sought after school or send in several applications to schools with all kinds of acceptance rates? The second option is clearly better, because it gives you more choices in case something goes wrong.
Teach them that once they have enough money to start making investments, they don’t want to put all of that money in the stock market. It’s unpredictable and can harm their financial standing in the short term if there’s ever a crash. If you have the financial means, consider making a starter investment for them using Yieldstreet. Yieldstreet is an alternative investment platform that helps you find the best alternative investment options. For more information, you can read a Yieldstreet review.
Take the “dad joke” route.
Who doesn’t love a wonderful opportunity for a good dad joke? Probably your teen, but that doesn’t count. When you’re ready to teach your teen about money, buy him or her a money tree from LivelyRoot. LivelyRoot is an online shop where you can buy incredible plants, like the money tree, and have them shipped directly and safely to your home.
If your teen has been hitting you up for more money than his or her allowance allows, you can show them that money really doesn’t grow on trees. While you’re at it, introduce them to a budgeting app, so they can more responsibly spend their allowance. With the right app, like YNAB, you’ll be able to help them create categories for spending. Any time they spend money, they’ll have to record it in their app. If they overdraw a category, they’ll have to rework their budget. This app can easily follow them to college and adulthood. That way they won’t need a magical tree; they’ll just know how to use what they have.
Cultivate their first banking experience.
If your teen was just a pre-teen yesterday, you may need to start from more of the basics, since a budgeting app is a little more advanced. For younger teens, consider signing up for Chase First Banking. It’s a shared account with you and your child. They’ll have their own debit card, and you’ll be able to monitor and control their spending. It’s like money with training wheels.
Help them build their financial skills with freedom and guidance with this hands-on experience. They’ll never know if they don’t try, and they’ll never have a good relationship with money if you don’t give them the opportunity. Here’s a safe way for both of you to introduce them to their financial future.