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Taking Control / October 2021

Teenagers And Money: How To Make It Work

teenage girl holding credit card and phone with yellow background

Educating your kids about money is an important part of preparing them for adulthood, and this means making them aware of the dangers of not having a sustainable budget, and teaching them how to perform basic financial tasks like tracking their spending, or applying for money loans in New Zealand. For many, personal finance is a taboo subject that is inappropriate to discuss, even between a parent and their children. This is perhaps one of the main reasons why many people end up financially insecure and struggling with debt; because they had to learn about smart financial practices the hard way.

But if you’re a parent, how should you prepare your child for the real world of loans, taxes, and debt? The best time to start teaching your child about money is when they become a teenager. This is a vital period to start preparing your child for financial independence, so here are a few tips on how you can best help your teens get ready for their future.

Let Them Earn Money

If you want money you have to earn it. This might seem like an obvious concept, but many teenagers leave school expecting to make money easily and are mentally unprepared for the lifestyle that's ahead of them. Many teenagers also head into college with a mentality of dependency, relying on their parents or student loans to find their way in life. Teaching your children to be self-reliant and independent will make the transition to adulthood that much easier. You can help them to be financially independent by:

  • • Paying them to do work around the house like cleaning the car, gardening, or babysitting.
  • • Getting them involved in community volunteer group.
  • • Encouraging them to get a part-time job.
  • • Paying them to help you with your work, with simple tasks like organizing files and documents.
  • • Getting them to make money with business platforms like TradeMe.

These tasks will help them develop a mentality of independence and self-reliance and also help them understand early on that to succeed financially, you must be able to commit to a working lifestyle. When you reward your children for work, you instil self-confidence in them, giving them a mindset of self-reliance and time management.

Budgeting and Managing Finances

Children almost always spend all their income immediately after receiving it. With no financial obligations such as paying bills or rent, the importance of budgeting and saving is something that you must discuss explicitly with them. You can prep them for the future financial management obligations by:

  • • Helping them to open a personal bank account where they can save some of their income.
  • • Setting long-term economic goals for them, like saving enough of their income to buy an expensive Christmas present.
  • • Making them write bills for work that you give to them.
  • • Getting them involved in the shopping by giving them a shopping list and some money that they have to budget in order to make the purchases.
  • • Teaching your children to record how to record their spending on excel spreadsheets.

Prepping for Loan Repayments

Borrowing money can be a very helpful tool for the financially independent, but making the most of it requires some thought. You can prep your teens for borrowing by getting them to apply for loans, like car loans, which you could easily pay-off for them. Instead, let them repay it on their own and only step in to assist when necessary.

Apply For Your First Loan With MoneyShop

When you’re ready, you can apply online for a personal loan at MoneyShop. Our company has assisted thousands of Kiwis with honest loans since 1993. We offer a variety of personal loans including debt consolidation, wedding loans, and unsecured loans. So get in touch with us today and we will tailor a loan to your plans.