After-School Jobs: A Financial Learning Opportunity
An after-school job can be a rite of passage for many American teenagers. After-school employment can benefit teenagers in many ways — from handling stress to time management. It can also be the first introduction many young people have to earning and managing money. That makes it a golden opportunity for parents to provide kids with a valuable financial lesson.
Kick-Start Your Teenager’s Savings
When you sit down to discuss what your teenagers should do with their newfound income, it’s important to stress that the money is theirs to do with as they wish. Instead of being a lecture on how to use their money, it should be a conversation about implementing a plan to help achieve their goals.
Following are three simple steps that can help your child kick-start their own savings.
1. Make a list of monthly expenses — Teenagers likely don’t have major living expenses, such as rent, to worry about, but that doesn’t mean they don’t have expenses. Any bills they pay for themselves on a monthly basis, such as car insurance and maintenance or cell phone bills, should be included.
2. Establish goals — Teens should decide what they hope to achieve with their money. Setting clear short-term and long-term goals will give them something to work toward.
3. Make a plan — Once expenses have been determined and goals have been set, teens have what they need to make a plan to achieve their goals. Help them determine their monthly income, then subtract monthly expenses to see what they have left over. Now they can subtract how much they want to put toward saving for their goals, which will leave them an amount they can use for entertainment and other expenses.