When your children become teenagers, it's important to teach money skills to them.
We talked with David Sant, Chief Marketing Officer for Cyprus Credit Union, for his top three money skills to teach your teen.
1. Managing on a limited budget
This prepares them to live independently and understand that money is finite. To teach them this tip, help them open up a checking account with a debit card. Identify an expense to budget and allow them to pay for it, such as clothes, phone or gas. When they mess up, don't bail them out. Allow them the chance to learn now when consequences are not as serious.
2. Paying yourself first
Saving is a habit that needs to be practiced. This also creates a buffer to avoid needing to be "bailed out". To teach them this tip use online calculators to show them the magic of compound interest. Sant says you can also offer to match their savings. He also suggests that working teens get a Roth IRA.
3. Utilizing credit properly
Teens need to understand what a credit score is, and how it's calculated. Sant suggests parents show their teens their statements and the repayment chart. You can show the impact of credit by using online calculators to simulate a future purchase, like a car, using different credit scores to show different total costs based on different interest rates.
You can find more information at cypruscu.com.