Share your knowledge with your teen. Teaching your teen financial basics is another area of parenting where you must be actively involved and committed. A teenager should be educated and experienced in earning, saving, spending and paying bills before he turns 18 and heads out on his own, either to college or the workforce.
Fashion a realistic budget with your teen. Explain the importance of spending only as much as she has and of maintaining a savings account for emergencies. Encourage her to obtain a job, either earning money around the house or outside employment, so that she can spend and save her own money.
Open a checking account for your teen. Take him to the bank and teach him how this is done. He can then learn the essential skills for writing checks and balancing a checkbook.
Hand over the debit card. Once your teen has worked with her checkbook for a few months and has shown you that she can be responsible with writing checks and managing the ledger, she should get used to paying for purchases with a debit card. It looks and feels like using a credit card, but is directly linked to her checking account.
Tips & Warnings
Encourage your teen to pay cash, use her debit card or write a check for as many purchases as possible. She will not spend as much and the temptation to spend more than she earns is taken away.