Tuesday, August 01, 2006

Adults view of money & teens

This is a recent article that I came across - it's designed to help parents show their teenage kids how to manage their money so that they can become rich when they grow up.

I wonder what you reckon:-

Hey Big Spender: 7 Signs Your Teen Needs a Money Education
By Cheryl Hall


If your teen left home tomorrow, would they need credit repair in a week? Would they be able to buy groceries in a month? Would they have to come back and live in your basement, hiding from their creditors, up to their eyeballs in credit card debt? It’s a scary idea, I know, that in theory your teen will be out on their own shortly. Do they have the money skills necessary to survive? Are you raising a shopping addict or a savvy spender?



Your teen might need a crash course in money management if:

1. Your teen has no “cash” concept.



It’s easy to overspend or not realize that this is really money I’m using when it’s all done via technology. Debit cards and credit cards are convenient; ATM cards have virtually replaced my need to ever actually visit the bank. Which is great on a holiday when I need cash; not so great for a teenager who never associates cash with any of their transactions. If your teen uses a debit or credit card for every purchase, wean them of it for 30 days. For 30 days, all transactions must be in cash, which means they have to have the cash in their pocket. Somehow those “necessities” become less necessary when you must have the green to make them.



2. Your teen “needs” things



Things as in gizmos, gadgets and junk. I have a saying in my house that is incredibly insensitive in a “but I need it” moment, but puts it in perspective. “You need sunshine, oxygen, food, shelter and basic clothing.” No one on the face of the earth has ever needed a video game, a new MP3 player, a newer phone with newer accessories, jewelry, the best shoes at the store, etc. You get the picture. Break them of the habit. Needs are necessities of life. Wants are completely different and are not priorities.

3. Shopping is an errand you run

It’s not an all-day thing. Shopping is not entertainment. Neither is it the best way to spend an entire weekend. It’s also an expensive hobby. The temptation to keep up with their friends is great and just might wipe you out. The urge to shop even when there is nothing to buy is a sign of a shopping addiction. When most of your teen’s social activities include going somewhere to spend money, this is definitely a sign that possible future money problems are on the horizon. Cut the mall time down. Or better yet, maybe they should get a job at the mall. That way, it’s the last place they want to be.



4. Your teen always “runs over”



Those commercials for cell phones where the parents are having chest pains over the cell phone bill are funny; but the reason that they work as a commercial is because a lot of us can relate to that and that’s not funny. As a parent of a teen, giving them something to be responsible for is the only way to make them more responsible. The unfortunate side effect of that giving of responsibility is that sometimes they screw up. Once or twice is a mistake. Every month, going over on the minutes, putting more on the credit card than they’re allowed, causing you overdue charges, consistently costing you money is a sign that your child desperately needs some money management education. Take the phone, cut the card and get back to basics until there’s a change.



5. You didn’t just win the lotto



Every time there’s a birthday or Christmas, the next day, is your child broke? Does one trip to the mall wipe out a paycheck? Are they always borrowing from you to keep afloat or keep gas in the car? Learning to create and manage a budget is a skill that is learned, which they’re not going to learn until you create the necessity. If your teen is working, then they probably know what must be paid for each month. Do they have to keep the car up and pay for their own insurance? Work with them to set up a weekly savings so that those bills are paid. Keep it simple and keep it on the refrigerator until they’ve got the hang of it.



6. They missed the formula



You know that amazing formula. Want more money? Work more. Or maybe work smarter or for more money. Whatever you do to change that formula, “work” is always a part of it. If your teen is always moaning and complaining about lack of funds, what are they doing to make money? Do they have a job? Could they work more hours and still keep their grades up? Could they work a weekend job for more cash? Could they work full-time over the summer and save some of that money for rainy days? Getting the work formula is key because it usually helps with money management skills. Your child will start looking at that hot new gizmo and think, “how many hours did I work to make that money?” What a great way to start prioritizing.

7. Watching you, they’ll never do it differently



Where do children learn their attitudes and ideas about money? The same place they learn everything else that winds up being really important; at home. If you never pay in cash, why would they? If you need things or are constantly trying to keep up with your friends or neighbors with the best gadgets, best car, best house, etc., of course they’re going to. If you feel insecure about money, they do. If you are always borrowing from one credit card or one bank to keep the other one off your back, then of course they are. If there is no family budget, how could they have a personal budget? In other words, if you need money management help, of course they need money management help. The best way to remedy this situation? Make a money education for your family a priority. Ask for help and then be dedicated to the process of making changes.



If you’re afraid your teen wouldn’t make it financially in the “real world”, then they probably won’t; at least without the opportunity to learn some new money management skills. Don’t throw your hands up in despair. You and your family can learn more about money, it’s not hopeless. Money is a learned skill just like making a bed or driving a car, and your teen learned that! Make a commitment to yourself and your family to make a money education a priority and then do the daily work required. In no time, your teen will be proud of their accomplishments and enjoy using their new skills. Now if you could just get them to do laundry.



Cheryl Hall (http://www.MillionaireKids101.com) has the keys for parents to help their children become financially successful. She has created 3 courses to help children learn how to think about money and start on the road to wealth and independence; Millionaire Kids 101, 201 and Millionaire Masters. Cheryl is a successful real estate investor and has been helping new investors start on their way to financial freedom.

Article Source: http://EzineArticles.com/?expert=Cheryl_Hall

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