Worried About Your Teen Understanding Finances? Encourage These 3 Things

If you are trying to help teach your teen financial responsibility a great way to do that is to start making them pay their bills. Not only should you make them pay their own bills or at least a portion, but also start putting things into their name when they reach 18 years old.    

You can co-sign or keep your name on some accounts if needed, but having them financial responsible for their own bills will make them realize that things in life aren't free. Here are a few easy things you can do to help them build credit and become responsible. 

Auto Insurance Transfer

Once your teen is 18 years old have them put their auto insurance in their own name. If they are worried about the costs and making the payments, you can offer to help and tell them to make sure they don't miss out on discounts. There are a lot of discounts teen drivers can qualify for if they are responsible about driving. Contact a local provider, such as Keller & Associates Insurance Brokers, for further assistance.

Get Their Own Phone Bill

If your teen is on your phone plan have them apply to get their own. They may have to get a prepaid or secured plan with the company before they can establish enough credit to get their own, but it's a start. You can also offer to sign on the contract, so you are responsible if they don't pay. If you do this, you can log in to see if they are paying their bill on time, and you can have a bill sent to your house.

Savings Account

Have them open up a savings account to start dumping money into.  Once they have put enough money into savings that you feel they could manage a checking account responsibly, have them get a checking account and debit card. It will be easier for them to keep a positive balance if they have a backup savings account with funds in it.

Helping your teen get out on their own feet and encouraging them to take financial responsibility is only going to make it easier for them when they have to go out into the real world. Talk with your teen about making and spending money, and encourage them to do the things that are mentioned above. The more they can learn now, the easier it will be when you have to totally cut them off and they have to support themselves.