Help your teen look at the big picture before they get a surprise in the form of credit card bills, bounced checks, or automated teller machines that refuse to surrender cash.
College students' budgets shouldn't be complicated. Simply follow these steps.
1. Work together to itemize your student's regular monthly expenses.
2. List total income, including money previously set aside, scholarships, loans, allowance or perhaps wages from a part-time job during school.
3. Subtract expenses from income to see if the budget is reasonable.
4. If the expenses outweigh the income, work together to trim expenses until the numbers agree.
5. Your teen's college budget should include a savings strategy. Encourage your kids to make regular deposits into a savings account for future expenditures (such as a car, an apartment, or student loans).
You may want to sit down together periodically to review the budget you've developed. Be sure your kids understand the importance of maintaining this budget to avoid overspending and debt trouble. But also remind them that it isn't carved in stone. If their favorite band is coming to town and they want to splurge on a concert ticket, they can simply cut back on other expenses for a month.
Showing posts with label Teen budgeting. Show all posts
Showing posts with label Teen budgeting. Show all posts
Thursday, March 3, 2011
Wednesday, March 2, 2011
Should Teens Have Credit Cards?
The plight of college students in deep credit card debt is reported in the media almost daily, but for many young people, credit card issues begin in high school, not college. Should teens have credit cards?
Teens today are consumers, pumping billions of dollars into the economy, so there's something to be said about teaching them to use credit cards responsibly before they go off to college or out on their own.
Why Should Teens Use Credit?
Credit cards offer convenience, but their main purpose should be to establish a good credit history so your teen can, when the time comes
•qualify for car loans and mortgages
•be able to rent an apartment
•qualify for favorable interest rates on all types of loans
•obtain lower auto and homeowners insurance premiums
•qualify for a job (employers are increasingly using credit scores when evaluating job candidates)
The best way to learn is often by doing. Having a credit card in high school can be beneficial if
•the teen is responsible
•the teen is given a credit card with a low credit limit
•parents monitor the teen's spending and payments monthly
•parents discuss the choices made, the implications of those choices, the obvious and hidden costs with the teen
•parents make suggestions for positive changes
Teens today are consumers, pumping billions of dollars into the economy, so there's something to be said about teaching them to use credit cards responsibly before they go off to college or out on their own.
Why Should Teens Use Credit?
Credit cards offer convenience, but their main purpose should be to establish a good credit history so your teen can, when the time comes
•qualify for car loans and mortgages
•be able to rent an apartment
•qualify for favorable interest rates on all types of loans
•obtain lower auto and homeowners insurance premiums
•qualify for a job (employers are increasingly using credit scores when evaluating job candidates)
The best way to learn is often by doing. Having a credit card in high school can be beneficial if
•the teen is responsible
•the teen is given a credit card with a low credit limit
•parents monitor the teen's spending and payments monthly
•parents discuss the choices made, the implications of those choices, the obvious and hidden costs with the teen
•parents make suggestions for positive changes
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