Even though struggling to manage finances is common place in the lives of us adults, this sure is a problem that we wouldn't want to pass on to the younger generation. Teaching children about money and how to manage it properly is something that’s bound to prove immensely useful to them through their lives. Your parental instincts may make you weak and get in the way of this invaluable lesson at times. Just remember that teaching financial responsibility to teens is for their own good.

Give allowance

One of the most effective ways of teaching teenagers financial responsibility is to give them allowance. Just limit the amount to something that’s enough for bare necessities. This way, if they want to get something that’s not really an essential e.g., a DVD, they’d need to cut down their spending and save up for it, thus making them more money savvy.

Introduce a rewarding system

You may want to introduce a rewarding system for your kids. Rather than simply giving them an allowance, get them to earn it by making them work for it. List down a set of responsibilities, for example making their do their bed, doing homework on time, etc and attach certain monetary value to them. Make it clear to your teen that their responsibility would only be deemed fulfilled if they do it consistently. It’s also a good idea to introduce bonuses as well as fines. Bonuses may serve to motivate them to take an initiative, whereas fines for things such as ignoring responsibilities, procrastinating, misbehaving, etc will discourage them from such behavior and attitude. Make sure you involve them in the transaction process on payday so that they’d know what they did right and where they slipped.

Teach them to make better choices

Grooming the decision-making ability of your kids is a vital part of making them more responsible in terms of money management. This lesson should be started as early as possible so that by the time they enter their teens, it’s become deeply embedded in their system. To groom this ability, have them make certain decisions by giving them options, for example whether they’d like to wear a white shirt or a red one. As they get older, expand the options and let them know that they’d have to live with the consequences of their decision. This would eventually help them in making better financial decisions.

Encourage them to work

Whatever allowance you’ll be giving your teen is likely to become insufficient to them as they progress through their adolescent years. When they start asking you for more money, simply tell them that if they want more money, they should go earn it by doing chores around the neighborhood or by taking up a part-time job. Getting them to work hard to earn money will help them realize its value and encourage them to manage it more responsibly.

Teaching kids the value of money and successfully instilling financial responsibility is not something that can be achieved overnight. You need to be patient and stick to the goal. Don’t allow yourself to get swayed by your emotions, or the pleading and tantrums of your young ones. Just keep reminding yourself that the lesson you’re teaching them will help them stay happier, and somewhat free of money-related stress.