Teen Money Management: Fast Food for Thought

Teen money management is a pretty big deal. This is the time when you are thinking about college, your first car, dating, and looking good. As long as you have a plan, it will all work out and you will smoke your friends who don't have a clue. Good for you.

First of all, if your parents do not give you an allowance, it is time to put on your best negotiator's hat and go talk to them. Just remind them that they are already spending money for you and on your behalf, so you might as well be in control of it. But remember--with great power comes great responsibility. Your future depends on being able to manage your finances wisely, with room to have fun and have the things that you want.

Back to making the case to your parents. You could throw in some household chores to sweeten the deal for them--there are lessons to be learned from those as well. And you do have the time to pitch in around the house, I just know it.

Show them this website, and tell them that money management for teenagers is the wave of the future (it really is, if you think about it). You don't want to make the same mistakes their friends made--notice I did not accuse them of making any--when it came to their finances.

If, after you have tried everything and your parents still will not give you an allowance, pout.

Before you go out and get an after-school job, let me advise against it if college is in your plans. You will be awarded far more in scholarships for staying focused on your studies than you will ever earn in a minimum wage job. You can always practice your teen money management skills with your birthday money as a worst-case scenario.

Summer jobs are another story, of course, and are even an opportunity to get some experience in a field you see yourself in one day.

Okay, so now I am going to assume that you have some money to manage, even if you have to break open your little sister's piggybank. I am sure you will pay her back.

Starting with five empty spaghetti sauce jars, you are going to divide up your money like this: 30% for your long-term savings and investments, 20% for your education, 20% for recreation, 20% for things that you want to buy (like an ipod or a used car), and 10% for helping other people (it is a good habit to get into, and it just feels good).

After you have at least $25 saved up in each jar, you are ready to go down to the bank and set up five separate checking accounts. Then, whenever you get money, whether as a gift, from a summer job, or some extra babysitting on the weekends, divide it up and deposit it into your five accounts.

Yes, it's that simple. You will be amazed at how easy money management can be while you are a teen--and how much further ahead you will be for the rest of your life for starting these habits early on.

Now that I think about it, teen money management isn't just the wave of the future, it is our only hope for creating a financially free generation. That is definitely a big deal.

One more thing. You can get an excellent college education at a public university. In fact, studies show that students graduating from private schools do not make enough to compensate for the extra tuition.

Given the fact that private universities are on average 5 times more costly than a comparable state school, you might want to consider setting you sights on something less prestigious if you haven't been offered a full-ride from that ivy league school.

The exception to that of course, is Harvard, which is now offering honor students from low income families (making less than $60,000 per year) the opportunity to attend free-of-charge. Something to think about.

That wraps up teen money management. I hope you have an idea now of what it takes to get started.

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