Teaching Your Teenager To Make Wise Financial Decisions

You have a young teenager that is just old enough to start making decisions on their own, but you are still a little nervous to cut them completely loose to make their own financial decisions.  So what do you do?  Well, you are in luck!  There are easy ways that your credit can can help with to provide your teenager financial freedom to set them on the right path to wise adult financial decisions. 

1.     Prepaid Cards – Prepaid cards function essentially like debit cards except they aren’t tied to a checking or savings account so they cannot be overdrawn.  Your teenager can only spend what’s available on the card to spend.  So you have the peace of mind that your child isn’t overspending and your teenager gets to learn how using a card works!

2.  Debit Card Customization – Think your teenager is ready for a debit card?  While debit cards are tied to a checking account and can be overdrawn, you can set limits to help minimize the odds this happens.  Customizing the options on your teenager’s debit card with features like low daily limits, pin or signature only transactions, and no cash withdrawals can help graduate your teenager to a real functioning debit card without all of the features that could get them financial trouble if they don’t quite know how to manage them. 

3.  Online Banking & Budgeting – There is no better way to grasp the concept of money in-money out than reviewing what you have spent each month.  Have your teenager “balance” their account and look at what they have spent their money on.  The concept of how quickly money can be spent will sink in very quickly when your teenager looks at the big picture using online banking or a budgeting tool, like Honor’s Money Desktop! 

What other ways do you help your teenager learn about responsibly managing their money?  Let us know and don’t forget to follow us on twitter @honorcu and let us know what you want to hear about next week using #askhonorcu!