It's important to teach your teen the importance of good money skills early on, and Rachel Langlois from Cyprus Credit Union has the top three money skills to teach your teen to get them started. See what Rachel's top skills are below!
Managing on a limited budget: Teaching your teen to learn to manage a limited budget prepares them to live independently and understand that money is finite.
- Help them order up a checking account with a debit card.
- Identify an expense to budget and allow them to pay for it, such as clothes, a phone or gas.
- When they mess up, don't bail them out. Allow them the chance to learn now when the consequences aren't as serious.
Paying yourself first: Saving is a habit that should be practiced at any age and it helps creates a buffer to avoid needing to be 'bailed out' of any money issues.
- Use online calculators to show them the magic of compound interest.
- Offer to match their savings.
- Working teens can get a Roth IRA.
Utilizing credit properly: Help your teen understand the impact of interest and what a credit score is and how it's calculated.
- Show them your statements and the repayment chart.
- Get a secured VISA card, help them get a credit report and walk through it with them.
- Show the impact of credit by using an online calculator to simulate a future purchase (such as a car) using different credit scores to show different total costs based on different interest rates.
Visit www.cypruscu.com for more information.