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Three steps to help your teen stay debt-free
If you are parent to a teen, then you know what it means to have an outgo that is much larger than your income. Well, you really cannot blame your teen for all your expenses, but fact is, those ‘wonder years’ of your children do leave a dent on your purse. According to reports, teens spent around $160 billion last year. By the time a student enters freshman year of college, his/her average debt on a personal credit card is about $1,500. So how do you help them get over their have-now-pay-later attitude? You can either hope they grow out of it OR you can do something about it before your child drowns in debt. You can try a couple of these tips to help your youngster get back on track:
Teach them that money matters: Financial education seems to be passé today and most schools don’t bother with imparting it. So that means, the onus lies on you to tell your child that every dollar s/he spends has to be accounted for. Help them create a budget and learn to control their spending to remain within their means.
Supervise: It’s not enough to teach them to budget; you must also keep a watchful eye and ensure that they spend within their means. This is especially true if your child holds a part-time job and has control over his own money. If they earn a decent sum, you could even open a joint account with them and encourage them to save their money.
Be a role model: You can lecture them until you are hoarse or you can lead by example. Agreed that debt is an integral part of life today and you cannot escape it. But the least you can do is try to stay out of debt as far as you possibly can. If you show your teen that money matters to you and that you are scrupulous with it, chances are, they will catch on fast.
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