Helping your teen become a financially independent young adult is one of the goals of parents who engage in positive parenting. This goal can be difficult to reach if the process is not addressed by parents while their teens live at home. For proof, just consider how many older millennials are still struggling to leave their parents homes!
To prepare your teen to become financially independent, start by following these two steps. As you and your teen work together, you will be able to see what other things they need help with beyond these basic steps.
1. Assist Your Teen In Finding A Job
One of the first steps toward financial independence for teens is to have their own source of income. Not only does your teen gain a sense of independence thanks to bringing in their own income but they can also gain valuable work experience while still in the safety of the home. To help your teen find and land a job which is appropriate for their skill set, you can:
- Talk with your teen about what their interests are and how they can turn their interests into work. A musically talented teen or one with a strong academic background may like tutoring others, or a more athletically-inclined teen may enjoy working as a lifeguard.
- Contact people in your network of family, friends, and acquaintances. It is far easier for teens to land their first job through networking than just submitting applications
- Help them prepare for their interviews by holding mock job interviews. You can use the most common job interview questions to help your teen be prepared to answer them properly.
Even if you prefer your teen not to take a job which may distract them from their schooling, it is important to develop the soft skills a job teaches such as good communication and teamwork. These skills can put your teen ahead of their peers. An ideal way to help them develop these skills and a strong work ethic is to have your teen regularly volunteer with an organization they admire.
2. Help Develop A Budget With Your Teen
Budgeting as a teen can be a simple activity which creates an important cornerstone of their future financial state. Since they have many of their needs still taken care of by you, the parents, creating a budget now gives them a valuable headstart on smart savings and spending. You can even find a good personal finance app for your teen to use. Some things to cover while teaching about budgets are:
- Spending habits – For one week, have your teen track what they spend their money on. They may be surprised to see how much they spend on random purchases such as eating out with friends, and impulse buys at mall stores, etc. After they have tracked, help them plan out how to cut back on spending and save for bigger purchases.
- Saving plan – In a recent survey, it was discovered that 40% of Americans are saving 5% or less of their annual income. To help your teen develop the habit of savings, help them determine how much they are willing to save per paycheck.
- Budget tracking – A budget is of no use if there is no accountability. To help your teen track their budget, you can finally put their technology obsession to good use. There is a wide variety of personal finance apps which can help your teen easily track if their budget is working.
If your teen does not have any source of regular income, you can still help them create a budget. By working with hypothetical numbers using the average minimum wage in your area, you and your teen can create a basic budget to help them understand how to budget when they have an income.
As you work with your teens on developing their financial independence, other financial concerns are more likely to come up. Be sure to let your teen know that you are there for them and you are ready to help them find answers to their questions concerning financial independence.
Tyler Jacobson – Father of three and avid outdoor enthusiast – has been juggling life with kids for around 18 years. He’s learned a thing or two about parenting and has turned from a full time career in digital media to helping fellow parents of teenagers. He pulls from his own life experiences raising spunky, free-spirited children, as well as his work with various organizations that help teens be their best selves. During his free time, Tyler enjoys taking his family into the mountains to connect with a simpler side of life which he finds grounding and rejuvenating.