Tips For Helping Your Teen Manage Money

As a parent, you may or may not look forward to the teen years. While some teens coast through these formative years, others might hit a few bumps in the road, making it one heck of a ride. Either way, your goal is to help your teen become a well-rounded young adult; one who is financially savvy and understands the importance of earning and saving money. Below, we’ve put together a cheat sheet to help you teach your teen some of the best ways to make and save their hard-earned dollars. Read on to learn some of the most important money matters you need to talk about with your teenager.

Let’s Talk Personal Finances

Your child is just starting to gain independence. They might have started a part-time job and are thinking about which college they want to attend. You’re the one person they need to show them the ropes of how to make it in the world, especially when it comes to money. It all starts with budgeting. If they already have a bank of their own, then sit down and help them create a budget. Talk about how much they earn (if they have a job) and how much they should be saving each month. If they aren’t working just yet and are only doing chores around the house and get an allowance, that still counts. Show them how to divide needs and wants, and decide how much they can save by making better financial decisions.

If they’re almost out of high school, paying for college needs to be discussed. Even if you’ve been saving since they were little, it might not be enough. Talk about the different options they have, like getting a scholarship or student loans. There are Earnest student loans that can cover the cost of tuition without exorbitant interest rates. The terms are also flexible and loans are personalized to theirs, and possibly your, financial situation. Keep in mind that everyone’s needs are different, so it’s best to weigh the pros and cons of taking out any type of loan prior to applying.

Earning Money

If they’re old enough to get a job, they need to understand the different deductions taken from their check and how to file taxes. If they’re only working part-time, then they might not owe income tax. However, if they decide to work full-time during the summer, that’s where things change. Even if they get a W-2, they still need to create a savings account and put money away for possible tax debt. Go over the different types of deductions and explain how exemptions work as well. Since tax laws can change periodically, it’s best to research prior to giving any advice.

Opening Bank Accounts

If you open an account when they were born, then you have two options. A custodial account can usually be converted into a regular checking or savings, or you can simply sign off it. However, it’s important that your child is financially responsible and understands how withdrawals can cause overdrafts prior to giving them free reign. In either case, go over the different types of accounts they have or can open, and explain how to use them properly. If there’s a minimum monthly deposit amount or service fee, review how that must be fulfilled. If they do work, they can set up direct deposit and avoid having to go to the bank.

Mad Money and Saving

When you were younger, you probably couldn’t wait to spend your first paycheck. After all, you worked hard and finally had money of your own. Unfortunately, you probably did what most do and spent every cent without thinking. While doing this once isn’t that big of a deal, making it a habit is. Teenagers, especially ones who are headed off to college, need to learn how to save. Habits they develop now will follow them into adulthood. If they continually blow through their paychecks without repercussions, how will they ever learn financial responsibility?

Together, have them create a list of monthly expenses, like their cell phone bill or gas, in addition to a set amount they need to save. If they’re saving to buy a car, that amount needs to be separate from their actual savings account. Also, remember to teach them how to reconcile their accounts, how to accurately track how much they spent and how to account for pending transactions.

Set Long-Term Goals

Aside from paying for college or getting a new car, you also need to talk about long-term goals. These goals should be more along the lines of buying a home or having a set amount of money in the bank by a certain age. One way to help your teenager be successful is with money management apps. There are plenty to choose from online. Some round up to the nearest dollar while others help track spending and send alerts when accounts reach a specific balance. There is also beginner invest apps they can use to learn the basics of investing. Since they’re so young, they have the time to start small and eventually watch their money grow.

Start Building Credit

Starter credit cards are a great way to build credit and teach financial responsibility. In addition to opening with your child, they can sign up for a secured card. They add a certain amount of their own money onto the card prior to use. Over time, and with a positive payment history, the lender will then convert the secured card into an unsecured one. Their goal should be paying off their balance in full every month.

Education is Key

Ongoing financial education is the key to proper money management. Talk about debt management, how to live with less and the best ways to avoid high interest rates on credit cards. You should have a serious conversation about what they need to do if they overdraw their bank account or can’t make a car or credit payment. They can also use a debt calculator, which will show how long it takes to realistically pay off their debt.

Personal Finance Tips for New Couples

If you’re getting married or otherwise merging households with someone you’re in a relationship with, you’re probably excited about your new life together and not thinking much about potential conflicts. However, it’s important for you to talk about money even if you don’t plan on sharing finances. The tips below can help.

Going Back

What was your family’s attitude about money when you were growing up? Did they talk about it? Were they spenders or savers? Once you start to think about this, you may be surprised at how much your attitude toward money has been shaped by your family, whether in agreement with or opposition to their approach. You and your partner should discuss these things. Get specific about what you mean when you say things such as spending and saving. This can help prevent misunderstanding later on.

Make a Plan

Will you share a joint account, or keep your money separate? If you’re keeping money separate, what will you do if one of you loses their job or has other financial issues? Do you want to create a prenuptial agreement? Are you moving into a home owned by one of you, and if so, will the other person be added to the mortgage? What will each of you be responsible for paying? Are there any big purchases or projects you need to take on soon? If so, how will you pay for it?

Perhaps you are buying a house together that needs some renovation. You may decide that you want to take out a personal loan from a private lender. It can be easy to find out whether you are eligible and to get an idea of what the repayment plan might be. In general, you should both be explicit as possible in discussing all of these different issues. You may also want to sit down periodically and have a kind of financial check-in talk.

Getting Help

Money can be a complicated minefield of practical and emotional considerations. There’s a reason that it becomes a point of conflict for so many couples and can even lead to divorce. You may want to get more than one type of help when it comes to your financial life as a couple. A good financial advisor can help you make the right choices based on your income and spending goals, help you repair your credit score, show you how to maximize your investments and save for retirement. A counselor can help you talk through fraught money conversations if you are experiencing conflict.

Estate Planning

It’s important to think not just about things like wills and trusts but also about making sure that you each have access to one another’s accounts if one of you becomes incapacitated. Estate planning can also be particularly important if you have children from a previous relationship because you may want to make sure that both your current partner and your children receive some of your assets. This is another tough conversation to have, but like the other money conversations, it is for the best in the long run.

3 Celebrities Who Lost Their Fortune to Debt and How You Can Avoid the Same Fate

The lifestyle of the rich and famous isn’t as secure as you might think. Once you make it big and the millions start rolling in, there are plenty of responsibilities and temptations that can quickly send your magnificent fortune spiraling down the drain. These celebrities who went broke are prime examples that debt and poor money management can affect anyone and everyone. Learn from their mistakes, and take their stories as motivation to begin cracking down even harder on your own budget and debt relief plan.

Do you have “good” debt? Think student loans or outstanding balances on cards you keep open to raise your score. While a little debt in small doses can benefit your credit with the right payment plan, it can quickly become problematic and, at worst, unmanageable. To avoid the common pitfalls, make sure you get serious about paying off as much as possible as soon as you can. This means having a strict budget, paying more than the minimum on everything whenever possible and looking for ways to make monthly expenses more affordable. For those with student debt, loan refinancing can help free up finances each month by trading all your principals for one larger loan. With a lower rate, you’ll be able to dedicate your finances to other areas of your life as well. A little breathing room can help you begin to restructure your budget and get debt-free faster.

Mike Tyson

Tyson had a lot more than just money problems in his life. The heavyweight champion fighter had to file bankruptcy, do time in jail and go through rehab before he started to turn things around. In addition to unpaid taxes, Tyson also had balanced owed to personal trainers, lawyers and others who had helped him throughout his career. He’s bounced back since then, but his experience shows that lifestyle and money go hand-in-hand. Falling behind in some areas ultimately causes you to suffer financially, too.

MC Hammer

After producing the smash hit “U Can’t Touch This”, MC Hammer quickly generated millions and was riding on easy street. Unfortunately, his extravagant lifestyle left him with more than half of his fortune in the negative. A mega mansion with over 200 staff members and private horse stable dwindled the singer’s budget until he had to file for bankruptcy in 1996. For some people, bankruptcy is the only way to get rid of staggering debt without losing their home or facing permanent financial ruin. It’s not the right choice for everyone, but for the people whose situations don’t have many other options, it can help them recover.

Dennis Rodman

Dennis Rodman became a millionaire playing basketball, but now he’s accused of being a shoplifter. Recently, Rodman was caught on security footage in a Newport Beach, CA, yoga studio allegedly assisting a group with a theft. The 400-pound, $2,500 amethyst geode was meant to be stolen while Rodman distracted the studio’s sole on-duty employee, but it failed when one of Rodman’s cohorts dropped the crystal and it shattered on the floor.

Rodman denies the allegations, but the owners of the studio insist he has not only attempted to steal the crystal but also taken various other items from the establishment. If Rodman is anywhere near the situation he was in in 2012, which left him broke according to his lawyers and unable to pay $800,000 in backed child support, then it’s likely things won’t be improving anytime soon. What can we learn from Rodman’s downfall? Nothing makes up for poor money management except learning better habits. Debt recovery is a slow and often painful process, but taking a consistent, honest path is the only way to true financial liberation.

Take These 5 Steps to Become an Online Trader

Are you wondering what it takes to become a successful online trader? If so, there’s good news. For anyone considering taking on the challenge of becoming a serious, dedicated trading enthusiast, there are five clear steps to follow. In fact, countless people who wanted to get involved in the exciting world of stock, bond, commodities, currency, options, futures, and other kinds of trades have followed the same five steps.

How to begin? As is the case with any new activity in which you’ll be putting your hard-earned funds at risk, the smartest place to start is with research. That means reading lots of articles, and perhaps a few books, on the subject of online trading. Find out what some of the experts think, read short pieces in financial publications, and follow your own line of interest. That’s why step one listed below is all about finding the area of investing that suits your particular preferences.

Choose Your Preferred Market

Investigate the various markets and decide whether you’re comfortable with stocks, bonds, cryptocurrency, options, commodities, ETFs (exchange-traded funds), indices, futures, or something else. There’s a lot out there, so spend time reading about the pros and cons of all the choices.

Set Goals and Make a Budget

Decide how much you want to earn or risk within a specified time period. For example, it’s wise, as a new trader, to set conservative profit goals, or to simply aim to break even during your first few months of trading. Also, make a detailed budget of how much money you can afford to allocate to this activity each month. A universal rule is to only trade with money you can afford to lose. In other words, don’t use your rent or daily expense money for your account.

Choose a Broker

Take you time to shop for a reputable, reliable broker that caters to new traders and offers low fees and commissions. There are literally hundreds of brokers out there but only a dozen or so major, reliable platforms that you’ll need to look at. Read customer and client reviews and check out the websites of any broker you think might be a good fit for you. Read all the fine print about how to open and account and see if there are any minimum opening balances.

Learn the Nuts and Bolts of Trading

There are plenty of details to learn, but don’t be intimidated. If you take your time and spend time practicing each method, you’ll learn rapidly. For example, most brokerage platforms offer new traders the chance to use simulators, or trading robots that are ideal for practicing your skills. The way these simulators work is interesting. You open a fictitious account, for practice purposes only, that contains a fixed amount of fake money, perhaps $10,000. Then, you try your hand at placing orders, buying stocks, bonds, and other instruments. When prices go up, you might decide to sell for a profit. You’ll learn how to get into and out of positions by using the correct commands and types of orders. There’s no better way to learn the intricacies of trading than on a simulator.

Open and Fund an Account

Opening a trading account is the easiest of the five steps listed here, but can be a major psychological hurdle for some investors. Why? Because this is the point at which your money is on the line. All the education, practice, research, and efforts you have made up to this point are now coming into focus. You have chosen your market, commodities for example, made a detailed budget, decided how much you wish to earn each month, shopped for a broker you can trust and who has low commissions, practiced order-placing on a simulator, and funded your account. Now, you’re ready to go, and the feeling can be a bit overwhelming.

Remember that you are in the same position that millions of others have been in, and those first few trades will be a nervous experience whether you make or lose money. But, after a few weeks, that initial shakiness will wear off and all your hard work will begin to pay off. You will be able to effortlessly make trades after doing the required research, follow each of your asset’s day by day, and close your positions with either a profit or loss. At the end of three months, do an audit and review of your activity to see where you made wise or unwise decisions. Learning from mistakes is the sign of a mature trader. Plus, when you understand when and why you make an error, you’re educating yourself and sharpening your skills.