Of course at age 16 I knew exactly how to manage my “new found” wealth…I managed to spend every cent! Why not, I earned it, right?
For kids looking to start earning some dollars, summer is a perfect time of year. Many businesses hire extra workers for the season or the more independent can get creative and become young entrepreneurs. No matter what route your children take to make money, help get them on the right track to being money smart.
Make teaching and learning good financial habits a family affair. From the littlest ones earning an allowance to the young adult starting a first job, taking the time now to teach and learn about budgeting and savings plans will pay off in the long run for everyone. Here are a couple tips to help get you started:
Create a budget or keep a money diary. You and your kids will be able to see how much money they have coming in, how much money was spent, where it all goes, and how much money they save each week or each month.
Divide your savings into categories. You can create as many categories as you like. I have three: short-term, long-term and everyday expenses. Short-term savings can be used for summer vacations, school events or a first family pet. Long-term can include saving for college or retirement. Gas and clothing can go in the everyday expenses category. It may make sense to keep a stash of cash for those everyday expenses somewhere accessible. The rest should be kept in a savings account so you can earn interest.
Please feel free to add your advice here or give my tips a try. Let us know how you do!