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Teen and MoneyLet’s face it, many teens today have no idea how to save or invest their money. Considering how many adults currently live in financial turmoil, it’s not hard to see why teens and young adults seem clueless to the benefits of saving versus spending. Like so many things, however, it’s silly to think that teens will regulate themselves when it comes to spending, and that’s why it’s so important for parents to encourage great spending habits when talking to their teens.

Turn Your Eye To Your Own Habits

Like anything else, spending is a habit that is directly affected by what your child sees you doing on a regular basis. If your family is living paycheck to paycheck, identify your own spending problems and approach your teen with humility and bluntness. Tell them exactly what you feel you’ve done wrong, and suggest that you work together to create a realistic budget that they can see in motion. Honesty is one of the best tactics in talking to teens.

Identify A Savings Percentage

When you’re budgeting with a teen, it can be hard to convince them of the virtues of saving their money, especially when they’re experiencing their first real income. Pick a reasonable percentage off each of their cheques that you would like to see put in a savings account, generally about 20%.

Identify Responsibilities

Help your child by talking to them about long term investments such as stocks and bonds, retirement funds, and life insurance. Your teen may think these things are strictly for older people, but you can easily put a stop to that thinking by demonstrating the long term gain in their favour. Early enrolment means more saved, while early purchases of life insurance lead to lower premium payments down the road.

Talk to a Professional

Every parent knows that there are just some things your kids take better from a professional than they will from their mom or dad. Despite knowing that your knowledge is correct, take the time to set up an appointment with a professional financial planner for your child. Just talking with an outside party may be enough to help your teen set long term goals for his or herself. A professional financial planner may help your child visualize his or her first car, first apartment, or even college tuition.

This guest post is from Allison with, where you can find financial information about this kind of insurance plan.

Image: David Castillo Dominici /