Five Reasons to Teach Budgeting in the Teen Years

While budgeting can be taught in bits and pieces when children are young, the ins and outs of a true monthly budget is best learned when children are in their teenage years. Here are five reasons why:

• Teenagers have the basic skills and can understand the scope of budgeting. It takes math, organizational and logic skills to understand how to budget. Teens have the ability to find and understand sale prices for clothing, they can understand the basics of checkbook accounting and they are capable learning the value of the dollar.

• Teenagers are more independent in their decision making. While your young child can make a decision, they will often make the decision that pleases their parents just because it pleases their parents. They get no practice in saving money because it is their decision to do so. It is important in learning how to budget that your teen understands that he ‘owns’ his budget. It is his choice how his money is spent. Once he feels this ownership, he’ll think more about the money decisions he makes.

• Budgeting is a complicated process. It has many steps. There is saving for something special in the short term, saving for a long term goal, paying expenses and credit. While the first can be taught in the younger years, the rest of the steps really can’t be understood and practiced until your child is older.

• Teenagers are capable of making quite a bit of money. This is the one reason you don’t want to wait to long to teach budgeting skills. Many teenagers have part-time jobs that pay well ~ or full-time jobs over the summer. Your teenager needs to know how to plan for having this money before it’s in his pocket. So, don’t wait until your teen is verging on the young adult years to start talking about budgeting. You’ll miss too many opportunities to teach this life skill.

• Parents are still there to be a safety net. This is another big reason you don’t want to wait. If your teenager spends his lunch money on a movie with friends and then comes to you for more, you will be there for him with more lunch money and a consequence. Therefore, he will learn this lesson before he is out in the real world. And you will have succeeded in teaching a very important life skill.