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How to Raise Financially Literate and Responsible Teens

It's no secret that a lot of young people tend to be irresponsible with money. A lot of this has to do with their upbringing and what they see around them. It's important to remember that financial literacy starts at home, and there are several ways to instill these crucial values in teens. Have a Healthy Relationship with Money

In terms of teaching financial literacy, it's always best to lead by example. Your children's relationship with money is a reflection of how you yourself deal with financial matters. Family recovery coach Fern Weis asks these questions: "What's your money story? What message have you given your kids over the years, through words and deeds, about money matters?" Whether you're financially sound, somewhat stable, or struggling with debt, how well you manage your resources and circumstances will inevitably rub off on your teen. And if you as a parent/guardian have a healthy relationship with money yourself, it's easier to teach the next generation to practice the same. There's an App for That Let's face it: one of the easiest ways to engage the younger generation is through apps. The good news is that there are a number of apps out there designed specifically for budgeting and simplifying finances. The Petal Card app won't just show you how you're spending against your current budget, it'll even keep track of your credit score. Attached to a literally zero-fee new credit card, the app also performs automatic balance checks to see if you have enough money for bills near the due date. A more well-known example is the Mint app, which is designed to help beginners make informed decisions about what parts of their budgets can be cut. Meanwhile, Pocketguard is all about building savings — or pocketing money that's left over from your budget. These are just some of the many financial apps available right now. Apart from simple budgeting and literacy, these apps can paint a clearer picture for your teen about what the modern financial landscape is truly like. Encourage an Entrepreneurial Mindset A crucial part of financial literacy is understanding that money is the product of effort, time, and resources. In the summers or other long break times at school, encourage your teens to find and maintain whatever small jobs are available in your town. During their formative years, it's important for them to experience what it's really like to make money in the real world, and how difficult it is to choose how to spend that money when it comes from your own hard work. This can be a huge step towards understanding the real value of a dollar, and could discourage them from bouts of overspending as adults. Teach Them to Pay Bills Take them along when you're paying household and other essential bills. Whether you automate monthly and annual expenses via apps or phone calls, or have to line up at certain locations to settle your dues, take your teen with you and show them the entire process. CNN Money stresses how this can show them the importance of living within your means. Make sure they see every crucial step — seeing the bank account balance, seeing the bill, how the bill shows up as a pending transaction, the receipt, etc. This shows teens that every new object, every time electrical appliances are turned on at home, and every meal they eat all translate to specific financial costs.

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