Ed note: Our colleagues at H&R Block’s Dollars and Sense program are the go-to place for information when it comes to helping teenagers learn about personal finance topics. They put their heads together – along with other experts – to pass along these great tips to start the discussion at your house.
With back-to-school shopping in full swing and a new school year around the corner, now is the perfect time to talk with your teenager about budgeting and saving. The conversation can be tricky, so we asked some of our favorite parent and teacher experts for their best tips. Check out these four brilliantly simple ideas for teaching students how to save money:
Put your teen’s technology obsession to use: download a money-saving app like Red Laser for back-to-school shopping.
“When back-to-school shopping, you can save money by making sure you are getting the best price possible for your items. The Red Laser app can help you save big on your student’s technology needs, dorm supplies and more.”
– Vicki Davis, Cool Cat Teacher
Get your teen a prepaid credit card for back-to-school shopping. It’s a good way to test the waters before setting them up with a real credit or debit card.
“A prepaid credit card is a great money management teaching tool for teens. Before getting them their first debit or credit card, let them practice with a prepaid card to learn that when your money is gone, it’s gone.”
– Kristi Story, The Budget Diet
Help them set up a savings plan for the school year where 10% of their paycheck or allowance goes into savings, no questions asked.
“Learning how to save — which is really a lesson in deferred gratification for greater rewards down the line — is as elemental to financial well-being as learning how to swim is to water safety. No parent scrimps on swim lessons for children, yet saving is a skill that is woefully under-nurtured. Kids are going to have to learn it some day; better today when the stakes are low, rather than the hard way when career, relationships and family hang in the balance.”
– Kevin Voigt, NerdWallet
Have your teen put a picture of a future goal (like a car) in their wallet. That way, they’re reminded of their savings aspirations every time they go to spend money.
“You can’t win a game unless you imagine what victory looks like. Just as practice prepares teams to win, goal-setting in personal finance creates daily habits that lead to cash victories. Something as simple as keeping a photo of Paris in your pocket to remind yourself of that European adventure you’re working toward can help slow impulse purchases that erode the odds you’ll ever see France, or afford the college or car of your dreams.”
– Kevin Voigt, NerdWallet