How to Teach Your Teen About Money Management - Checkexpress

How to Teach Your Teen About Money Management

Is it time to teach your teen about money management? One of the most important lessons is the concept of finite amounts. Kids need to understand they need to make smart choices to ensure they don’t come up short.  

A Checkexpress prepaid debit card is an ideal tool for helping teens learn how to manage their money. It introduces them to:
  • Budgeting a fixed amount of money to meet all their needs
  • Using plastic payment cards to make purchases online or in brick-and-mortar locations
  • Taking responsibility for carrying (and not losing) payment cards, so they have money when they need it
  • Facing the consequences of overspending

The last point is critical. If a teen runs out of money, experts recommend that parents should avoid helping them out with extra cash or an advance on their allowance. “It is important to make them responsible for their financial actions while the consequences are not serious,” says  Jeffrey Arnett, a psychology professor at Clark University and co-author of When Will My Grown-Up Kid Grow Up?

Before giving your teen a prepaid debit card, have a family discussion to develop a plan that works for everyone. Here’s how to get started:
  • List all expenses, including discretionary items
  • Identify which expenses will be the teen’s responsibilities
  • Discuss financial goals; for example, contributing to a savings plan
  • Calculate the amount needed to cover the teen’s expenses, discretionary spending, and financial goals
  • Decide how frequently to reload card; for example, monthly or quarterly

Sticking to a fixed budget takes good organization skills, so be sure spend some time discussing ways to plan and track their finances. You can find valuable tips on organizing finances in the Checkexpress blog post, “How to End Your Money Stress Once and for All.” 

For many teens, the most convenient approach to planning might be to use a smartphone app. Here are 3 top recommended apps to consider:

A Checkexpress prepaid debit card combined with a money management plan helps prepare teens for a lifetime of financial stability. Learn more about obtaining a prepaid debit card at your local Checkexpress location!