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Finance
5 Ways to Prepare Your Teens for "The Real World" Before They're Actually In It
By Marianne McGoldrick
Jan/Feb 2009

Paper delivery jobAs a kid, my parents did their best to teach me about saving my money. Every week I would complete my list of chores, and my parents would give me my allowance. 10 percent would be put in a jar to go to charity. 50 percent would go into a college savings account and the rest could be used for my own spending pleasure.

When I got my first real job at the age of 16, I continued this pattern of saving by personal choice. By the end of my sophomore year at the University of Georgia, I had put away enough money to pay for a summer trip to Europe.

I am now a junior at UGA and am stunned at the number of my peers who have never had to work a day in their lives. I have friends that have never had a real job (and no, babysitting does not count) and have no clue how to balance the checking account that their parents so willingly replenish every week. I wonder what will happen to them when they are forced to enter the real world – a world that will not loan you rent money when you accidentally squander your earnings away on junk food and clothing instead of saving up ahead of time; a world that does not care if your paycheck comes in on Friday – the electric bill was due last week.

The following are some guidelines for teaching your teen about finances BEFORE they leave for college.

Make them get a job.
I understand that a high school student’s first priority is school, but there is no excuse for not having a job during the summer. Kids will never learn the real value of a dollar until they have worked for it themselves. That $50 concert ticket will seem a lot more expensive once it can be equated with seven hours of waiting tables. 

Set spending and savings patterns.
Set a rule that at least 40 percent of your child’s earnings goes into a savings account that either you or your spouse have to sign for to withdraw funds. This fund should be used for college, or an appropriate post secondary activity. The remaining earnings can be used at your child’s discretion. You might also want to think about setting aside 10 percent of your child’s earnings for charity. This will teach them to give back to the community.

Start a checking account.
This is an important step in teaching your child financial responsibility. Most banks and credit unions offer special plans for teens. Make sure you sit down with your child and teach them how to write and record checks, review statements and balance the account.

Help your teen understand credit.
It is a good idea to give your teen a credit card for emergencies. However, you need to teach them about good and bad credit, and why credit card companies target teens as consumers. Also make sure your teen understands that if you can eat it, drink it or wear it, it is NOT an emergency.

Don’t bail them out.
Let your child experience the consequences of bad financial decisions. It is better to help them find a way to get out of a $200 debt now than a $20,000 debt later on. 

Marianne McGoldrick is a junior at the University of Georgia majoring in Magazines and Consumer Journalism.


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