Empowering Teens through Smart Spending

Helping teens learn to handle money can be a tricky proposition. Mistakes can quite literally be costly, but there’s really no substitute for hands-on practice when it comes to managing finances.

Children are the ultimate investment, so teach your teen to be a smart spender with these savvy tips:

Start with saving. As a first step, open a savings account for your teen and involve them in the process. Use this opportunity to teach good habits, such as putting away a percentage of every paycheck, creating an emergency fund and setting savings goals for big purchases. Visit the bank together and explore the account options. Many banks offer incentives for high-balance accounts, and while your teen likely won’t qualify, it’s a valuable lesson to see the incentives available to big savers.

Move on to basic checking. Although most banks still refer to their most accessible accounts as “checking” accounts, chances are that your teen is more likely to shop with a debit card or cash rather than checks. Still, knowing how to write a proper check is an important life skill – as are conducting debit transactions and understanding any fees associated with using the account.

Create safe zones. Even after teaching them the fundamentals, letting teens make their own purchasing decisions can be a frightening prospect. Fortunately, if you know where to look, there are options available that offer teens a customizable level of autonomy while still under the oversight of a parent. For example, Amazon introduced a way for teens ages 13-17 to shop using their own, independent login linked to a parent’s account. In addition to product recommendations, order histories and lists tailored specifically to the teen’s shopping history and interests, teens can exercise smart shopping decisions with access to customer reviews and comparison shopping tools.

Parents have the option to review and approve every purchase, or set spending limits that offer teens the freedom to place orders up to a certain dollar amount on their own. In either case, parents receive notifications for every order and shipment. Find more details at Amazon.com/forteens.

Set a budget. Part of smart spending is learning to shop within your means. Whether your teen’s income is from a part-time job, allowance or a combination of the two, building a budget that defines expenses and expectations is essential. Like any budget, it should include all income sources and all expenses he or she is responsible for, including auto maintenance, gasoline, insurance and beyond. Reinforce the importance of saving by including a regular savings allocation. Putting all of these numbers to paper lets your teen see clearly where the money is going and how much is left over for extracurricular spending.

Put safety nets in place. No matter how much planning is done in advance, surprise expenses will inevitably pop up. Teens can prepare for these expenses while also guarding against mistakes and the temptation to over-spend by taking advantage of special services available through banking institutions, such as setting a per-transaction or daily spending limit and investing in overdraft coverage.

Ultimately, money management skills come with time and practice. Creating a safe environment for your teen to practice these life lessons sooner rather than later can pay dividends down the road. (Family Features)

Photo courtesy of Jeannette Kaplun, HispanaGlobal.net.

Drive Away Distractions to Protect Teens Behind the Wheel

Today’s teens face more distractions than any generation before.

Many don’t recall a time when they were not continuously connected to their friends. Cell phones – which might have been provided as a safety precaution in case Mom or Dad was running late picking them up from school – are now the source of constant messaging, sharing and media consumption.

Teens send texts instead of passing notes in class. They share moments with their peers and the world in the form of photos and short videos. Music, food and transportation can arrive on demand, all with the swipe of a finger. Being away from their phones, even for a short period of time, can even cause a form of separation anxiety expressed in the acronym FOMO (fear of missing out).

So it should come as no surprise that cell phone use is the offense most commonly associated with distracted driving. However, it’s not the only type of distraction.

“A lot of people think they’re better drivers than they actually are, which is why they take unnecessary risks when they’re behind the wheel,” said Randy Petro, chief claims officer for Mercury Insurance. “We see a lot of claims related to distracted driving, including parents turning to scold arguing children, adjusting the infotainment system, and even taking photos while driving. Your first priority once you start piloting any vehicle should be to focus on the task at hand – driving.”

Ten percent of all drivers ages 15 to 19 who were involved in fatal crashes were distracted at the time of the crashes, according to the National Highway Traffic Safety Administration (NHTSA). NHTSA also reports that 660,000 people drive distracted every day.

Teens aren’t the only ones who feel the need to be connected – adults are guilty of it, too.

Many of the teens who are glued to their smartphones have witnessed their parents answering emails at the dinner table or have seen them shoot a “quick text” while driving. Teens have grown up learning that this type of behavior is acceptable and maybe even expected. However, there’s a right time and a right place for everything.

“The first thing parents need to do is practice what they preach. Teenagers won’t always be receptive to ‘because I say so’ or ‘because I’m the adult,’ especially if they witness their parents actively engaging in a behavior they’re being told is bad,” adds Petro. “We as adults need to set a proper example – after all, we do have the advantage of more life experience.”

Parents should set a powerful example by committing not to drive distracted if they want their children to do the same. If necessary, parents can also invest in technology to monitor and disable phones while their teens are driving to eliminate the temptation altogether.

“No Instagram post, bite of a burger or playlist selection is worth someone else’s life. People are mainly in a car to get from point A to point B, and our wish is for them to do it safely,” says Petro.

There are several excellent online resources that provide tips and information to help prepare teens for life behind the wheel, including Mercury Insurance’s Drive Safe Challenge and NHTSA’s Distraction.gov.