With regards to parents, teens, and money, we are full of automatic responses, most of which don’t really make sense OR make a difference with kids when we really look at them. One example is BUDGETING.
Budgeting your money is just like dieting—they both promise big results and they both ultimately fail because they don’t take into consideration the way human beings are designed. Diets make you want to eat and budgeting makes you want to spend!
Wealth builders are not about budgeting; they are interested in tracking net worth. Budgeting is a survival technique that is supposed to help us avoid money problems like overdrawn checking accounts or spending beyond our means. But there is a MUCH BETTER WAY!
The most honest article I have ever seen about budgeting is here.
Instead of budgeting, encourage your teen to spend, save, give, and invest intentionally. The jar system is one way, and the Silo System by WealthQuest for Teens is a version of this approach that is specifically designed for teens. Experts recommend that young children use this approach to divide their “income” (all the money that comes to them) into 3 accounts: spend, save, and give. WealthQuest for Teens teaches a TEENAGE version, which involves 6 accounts: Necessities, Rainy Day fund (or Learning fund), Big Ticket Items, Fun, Give, and Future Financial Freedom. This system works for them now AND for the rest of their lives.
And it works WAY better than budgeting! Your teen will love this system, because it makes a direct connection between their money and their goals, dreams, and values.
Easy Action: Teach your teen a great money management system that is age-appropriate.
Resource at Your Fingertips: WealthQuest for Teens’ Silo System teaches a system that works great for teens now AND for the rest of their lives.
Remember to Pledge to teach your teen to be an excellent money manager! Let the world know that parents are doing their part to build a financially literate society!
© Your Teen’s Money Skills, Inc., 2012 All rights reserved worldwide.