If you’re going to be successful in managing your finances, you have to budget. It’s a skill that parents need to teach their children, now more than ever before. It used to be that kids would only have bills that their parents pushed on them. For example, my son owes me a predetermined amount each month for his phone and car insurance. These are what I like to call “responsibility payments” as I pay the bills each month, and he just gives me his portion. If for some reason he could not pay them, it would be a discussion we would have to have, but the bill would still get paid. But these days teens can create bills of their own as soon as they have a bank account, and if they don’t have their budget skills honed, there can serious consequences.
My son has just started building up his savings again after pouring all of his money into buying his first car. He left for a week long trip to Boundary Waters in northern Minnesota, with very little in his bank account. When he returned, he told me he was a little worried that there wasn’t enough in his account to cover his subscription payments, but he was happy that it all worked out.
He was a little worried? He was happy that it all worked out? We obviously had to have a very simple discussion about budgeting in which I needed to emphasize three very important things.
Know Your Expenses
Know what your expenses are, and when they need to be paid. I knew that my son had several online subscriptions, as I had seen them in my periodic review of his checking account (I am a secondary on his account so I can view it’s details). But I was surprised to find out he didn’t know exactly how much they were, or when they were due each month. I made him find out, and write down this information.
Ensure You Can Pay Your Bills
Now that he knows when his subscriptions are due, and how much will be automatically deducted from his account he can plan his spending around ensuring there is enough in his account to cover his expenses.
Review Value
I also told him he should review each of his subscriptions, and evaluate if each of them still provided enough value for what it cost.
Budgeting is a skill parents need to teach their kids. This is important now more than ever as teens can create their own monthly expenses as soon as they have a bank account. Parents need to monitor their spending, and teach them the necessary skills to handle them responsibly.
How about you, EOD nation, do your kids have online subscriptions? Have you taught them how to handle them responsibly?
Both my son and daughter have bank accounts and online subscriptions. We have had the conversation often about checking balances, understanding where their money is going, and the frequency at which the subscription charge. So far so good, but as teenagers go some little reminders from dad haven’t hurt.