05/09/2024 | Press release | Distributed by Public on 06/09/2024 10:35
Every parent wants what's best for their children, and part of that is ensuring they have a bright financial future. Talking to children about money can start at an early age, but it becomes especially important as they enter their teenage years and begin to take on more adult responsibilities.
While every family situation is different, and some may have access to different resources than others, there are always steps you can take to give your teen a jump-start on their financial journey.
From helping them understand the ins and outs of basic financial literacy to encouraging them to start their own business, there are ways to help, from the simple to the complex. Consider these nine recommendations from financial experts to help set your teen up for a secure financial future.
"Start with helping them get a basic understanding of money, taxes and the importance of saving. When they earn money, make them save 20% or more of it. Get them a life insurance policy to protect their future insurability and look to open a Roth IRA." -Ronald Gestiehr, Lifetime Financial Growth
"Add your teen as an authorized user on your credit card. Once they turn 18, your on-time payments will help build their credit. It's up to you whether you let them use the card or not, of course. I suggest setting them up with a debit card first to get in the habit of careful spending. Then, when they go off to college, allow them to keep the credit card on hand for emergencies." -Trae Bodge, Trae Bodge Media, LLC
Encourage them to start a part-time job or business
"One way parents can help their teenagers jump-start their financial future is by encouraging them to start a part-time job or a small business. This experience teaches them valuable lessons in earning, budgeting and saving money. It fosters financial literacy and builds practical financial skills. It also promotes independence and an entrepreneurial spirit, which is crucial for the transition to adulthood." -Jabin Geevarghese George, Tata Consultancy Services Ltd.
"For working-class families in particular, a small savings account can make a big difference. Save up a few thousand dollars while they're a teenager and let them use the funds to assist their first 'adult' move - getting into an apartment, buying a car, traveling and more. This startup money can help them get stable early on and avoid spending the first years of adulthood in debt or struggling." -Dana Miranda, YOU DON'T NEED A BUDGET
"Include teenagers in family budgeting discussions to give them a real-world perspective on managing household finances. This exposure helps them understand income, expenses and the importance of financial planning." -Manoj Kumar Vandanapu
"One way parents can help their teenagers jump-start their financial future is by opening a custodial Roth IRA. This allows teens to contribute their earnings from part-time jobs, ensuring they benefit from tax-free growth and compounding interest over time. This early start in investing teaches them the importance of saving for retirement and provides a significant financial foundation for the future." -Greg Welborn, First Financial Consulting
"Parents could teach teens how to use their funds to sustain themselves now and into the future. For example, let them make financial decisions for costs like their cell phone, fuel for their car (if applicable) and saving for college. As they head into adulthood, they'll understand the basic concepts of budgeting and saving and will be able to manage their finances better." -Justin Donald, Lifestyle Investor
"I believe a legacy of financial literacy starts with both knowledge and money. Saving money in a custodial account or helping them start a Roth IRA are great, but without an in-depth understanding of how to manage their finances, they will suffer on their own without you there. Short- and long-term financial competence is built best through interactive lessons and on-the-ground training." -Stephen Kates, Annuity.org
"Parents can help their teenagers jump-start their financial future by introducing them to credit concepts early. Talk with them about how credit works. Explain that using credit can create a financial advantage, but debt can become a serious financial burden. Helping them build a positive credit history early on can lay the foundation for a bright financial future." -Rod Griffin, Experian
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This article was written by Kiplinger Advisor Collective fromKiplingerand was legally licensed through theDiveMarketplaceby Industry Dive. Please direct all licensing questions to[email protected].