Already on ArticleSlash?

Forgot your password? Sign Up

How to Guarantee a Teens Financial Independence Be Your Teens Money Coach

 


Visitors: 208

Why do we need to become our teen's money coach? What could entice an already busy parent to put another thing on his or her full plate?

Today, our kid's financial future has never had such a great potential to be theirs for the taking. Even with all the bad economic news, no time in history has it ever been easier for our young people to become truly wealthy and have their money under their control. And the amazing thing is that any kid, any ordinary kid, can do it.

They have one thing going for them that we do not have: time. But to make the most of their time, they need to know how to take advantage of today's economic opportunities. To do that, they need to be coached, just as they would be in sports. They need to be tutored just as they would be in math or science. Bob Nardelli, former President and CEO of Home Depot, says that he “believes that people, unless coached, never reach their maximum capabilities. "

What do we currently teach our young teens to do with money? First, we teach them to write checks. We teach them to get good jobs and establish credit. Our culture teaches them they must buy a house and then lenders approve them for more than they can truly afford. Advertisers teach them they need this or that. They teach them that debt is not unusual or unhealthy.

But, as our teen's money coach, we can teach them what average millionaires do, even if we didn't make smart choices when we were young.

We can teach them that interest can work for them dramatically if they start early or it can really work against them if they are not careful. For example, if a teen works (and we all want our kids to work) only eight hours a week making $8, he or she can make at least $3200 a year. It seems like a piddly amount to invest, $1000 or $2000 a year when your teen wants desperately to buy an Iphone or a hot guitar. But as your teen's money coach, you can share two secrets.

The Sure Path to Millions Takes Time

First, millionaires are made bit by bit over time. That $2,000 can double every seven to ten years depending on interest earned in investments. That one time investment of $2,000 earning 10% can grow into $250,000 tax-free over forty years, that's about $360,000 in taxable dollars, a handy sum at retirement. Even investing $2,000 for six years before age 20 can garner your teen $3.3 million. Show your kid the numbers.

Experience Is the Best Teacher

Two, you can give your teens more control over their finances. One way to do it is to monthly give your teen around the ages of 14 to 16 the money you spend on him or her and let him spend it. Then when he spends his clothing money on a $70 pair of jeans, $150 for an expensive pair of tennis shoes and comes to you wanting money for the movies, turn him down. Let him learn by experience how money works before he goes out into the world. It's the perfect tool for the parent. Let them whine when they run out of cash but don't rescue. Then when they are 25, they won't be running to you to bail them out to make the car payment after they took that money to go on an irresistible Caribbean vacation. You will be teaching them some of the important lessons that lead to financial independence.

Billie Wells is an advocate of financial education for young people. She is the author of How To Raise A Teenage Millionaire in The 12 Winning Secrets to Wealth series. See http://www.12winningsecrets.com

(644)

Article Source:


 
Rate this Article: 
 
Ways For Teens to Make Money
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Self Reliance and Independence - Giving Our Teens the Ultimate Gift

by: Debra Beck (September 22, 2008) 
(Kids and Teens)

Teens 6 Pack Abs - 4 Tips On How Teens Can Achieve A Great Looking Tummy

by: Sean Byrne (February 07, 2008) 
(Health and Fitness/Exercise)

Weight Loss Plans For Teens - Not Every Method Works For Teens

by: Rugina Cecil (August 13, 2008) 
(Health and Fitness/Weight Loss)

How to Lose Weight, Teens - Modern Teens Face More Than Hormonal Changes

by: Margie Du Plessis (August 27, 2008) 
(Health and Fitness/Weight Loss)

Current Events For Teens - What Do Teens Care About?

by: Wendy Pan (October 19, 2008) 
(Kids and Teens)

Ways For Teens To Make Money - Here Are Ways For Teens To Make Money Online

by: Christopher Stigson (May 15, 2008) 
(Internet and Businesses Online/Internet Marketing)

Weight Loss Plans For Teens Tips For Teens to Lose Weight

by: Angela Boyle (November 08, 2008) 
(Health and Fitness/Weight Loss)

Can Your Kids Benefit From a Financial Education Video For Teens?

by: Donald Renal (June 18, 2008) 
(Finance/Student Loans)

Teens and Money Management

by: Jason Karp (August 11, 2008) 
(Finance/Personal Finance)

Ways For Teens to Make Money

by: Lee Mckenna (May 28, 2008) 
(Kids and Teens)