CHICAGO, IL--(Marketwire - Mar 28, 2013) - As part of BMO Harris Bank's ongoing commitment to financial literacy and Making Money Make Sense, BMO Harris is providing weekly financial tips. This week's tip offers ways to teach teens ages 13-15 about money.
Helping teens build a strong financial foundation now will help them be more money savvy as they enter adulthood. Learning how to responsibly manage money now can help later when they start their career and need to budget for bigger purchases, such as a house or car.
BMO Harris Bank suggests parents teach their teens these three financial lessons:
Keeping up with their peers. Teens tend to live in the moment and are susceptible to peer pressure, which sometimes makes it difficult for them to decide between things they want and things they really need. When your teens talk about things they want, such as the latest phone or designer jeans, take it as an opportunity to discuss whether or not these items are necessary. Help your teen understand the relevance of material items and how long it may take them to save for them or how the money could be used toward another expense, such as college.
Budgeting basics. Many people, adults and teens alike, equate "budget" with "boring." Start by explaining to your teen that using one is a way to get the things he or she wants. Have your teen track his or her expenses for one week using an online budgeting program. Then, help him or her add up monthly income including allowance and money from small jobs, such as babysitting or cutting the neighbor's lawn. Next, compare that total with the expenses he or she tracked for one week.
This helps teens see where their money is going and also if they are buying things they really need, versus things they just want. Use this exercise to show your teen where he or she can make small cuts so they have a bit of money leftover each month to save toward the unexpected, such as extra charges on their cell phone bill or last minute concert tickets.
Achieving savings goals. Many teens have trouble grasping different types of savings goals:
- Short-term - Dinner with friends, new earrings, new songs on iTunes
- Mid-term - Concert tickets, new phone, prom dress
- Long-term - College, car, trip
Short-term savings goals can often be achieved through careful budgeting. However, mid- and long-term goals are best achieved with the help of a savings account. These accounts are a great way for teens to begin learning how to keep track of their money and see how with careful planning, it can add up over time.
Put yourself in a comfortable place and get started with helpful steps.
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About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and $542 billion in assets (as of Jan. 31, 2013).