Teenagers and Money - 8 Ways to Help Debt Proof Your Teenager

While there is speculation as to whether or not we are in a recession, there is no doubt that as a country we are facing difficult financial times. While some may be pessimistic about the current financial difficulty, times such as these can be prime opportunity to educate your teenager about money. With historic foreclosure rates, recurring job losses, and volatile stock market conditions, what is it that you tell your teenager about debt and money? Here are 7 ways to debt proof your teenager:

1. Teach them about interest

Interest is a part of money management just as the dollar bill. Without it, banks could not operate, and many would not be able to secure housing. A lot of teenagers can read about interest and even tell you what it means. However, there is nothing like experiencing it to get its full meaning. Find a practical way to help your teenager gain a tangible understanding of interest.

2. Teach the advantage of saving over immediate gratification

As consumers, we all know what it means to want something - and want it now. Patience is not a virtue that many can apply to object of our hearts desires. Credit makes it way too easy to fulfill our self-imposed desires for the "must haves" of our lives. For some teens, this temptation can be overwhelming. Yet, there is maturity in being able to save for those things we want, rather than paying more for it with the interest that comes from credit.

3. Educate the proper use of credit cards

Spending more than they have earned, you do not have to look far to find an adult that has gotten into trouble with credit card debt. Credit cards are not necessarily evil, but a convenient method of payment in the hands of responsible users.

4. Limit borrowing

There is something satisfying setting a financial goal, and earning enough money to meet it. Sometime loaning money to teenagers can rob them of the opportunity to gain resourceful financial skills. Encourage the entrepreneurial spirit within your teenager. You both may be amazed at the results.

5. Help them learn budgeting

To some budgeting may hold a negative connotation, one that is filled with restrictions and limitations. However, if done right, budgeting can eliminate financial stress and promote inner peace. If you know where all your money is going, then there is no guessing or the stress of trying to figure out how you are going to pay for your bills. There are many are many resources available to help your teenager learn how to make and keep a budget.

6. Teach them to save, save, and then save

Saving is not only important for getting the things we want, but it is also a safety net for when life's mishaps occur. Without a proper savings account to cushion the blow of financial crisis, credit become and inevitable solution. Having a savings account will reduce stress when problems arise because a person is financially prepared.

7. Use financial tools

Do not be afraid to use the many financial tools available to help your teenager develop healthy money management skills. Debit cards, accounting software, online banking and checking accounts can be great tools to help educate your teenager about finances. Check with your financial institution, local library, and financial professional about possible resources for teenagers.

8. Get some financial counsel

If your teenager, or even yourself, do not have healthy money management skills, then I encourage you to get some help. Check your local community for financial counseling, classes or financial workshops. Contact a financial professional that can help your teenager gain positive financial advice and how to stay out of debt. Or consider taking a class as a family. It is never too late to learn.

Financial habits are taught, not assumed. Many adults that have spending problems or excessive credit card debt may never have learned how to handle money. The habits that are taught as a teenager and cultivated as an adult can have life changing implications for your teenager.