Successfully managing money is an important aspect of everyone’s life. There is no better gift you can give your teenage daughter than the gift of financial literacy. Unfortunately, very little about financial awareness is taught to our children at either school or university, so it is incumbent on you to provide these life-changing skills and expertise. Managing your money can seem like a challenging concept for anyone, let alone a teenager, so today’s article will focus on some easy-to-follow tips to help your daughter get started.

Know Her Income

Even if your daughter is not making a lot of money, or simply relies on an allowance, the first step is to help your daughter determine her income. Have her total income from a part-time job, if applicable, allowance, gift money, and any other sources of income to determine how much she earns each month. Whatever the number is, this represents the baseline for all her saving and spending decisions.

Create a Budget

The teenage years are a perfect time to learn how to develop and adhere to a budget. Have your daughter list out her expenses based on two key categories of saving and spending. Saving will include amounts to go into saving for a specific goal or item, including contributing to an education fund, for example, or maybe saving for a short-term goal, like a new laptop or vacation with friends. Help your daughter set realistic, achievable goals. Spending should include those amounts spent on things like her phone, eating out or daily treats, clothes, accessories, beauty and entertainment, for example. This is the perfect time to help your daughter better understand needs versus wants, and that there are sometimes difficult trade-offs required in order to maintain a balanced budget.

Track and Balance the Budget

Now is the perfect time to help your daughter develop a tracking system for her expenses, whether it be saving receipts, jotting her expenditures in a notebook or developing an easy-to-use online tracking system. Help your daughter review her budget to see if, and where, she should cut back, if required. This is a time of her life when peer pressure can be difficult. Talk to your daughter about the importance of saying no or having a back-up plan in place if saying no when she’s out with friends is difficult. Not bringing extra money or her debit card may help, for example. Or consider limiting the amount on her bank cards.

Open A Savings Account

If she hasn’t done so already, have your daughter open one or more savings accounts to help her get into the habit of saving... Encourage her to put the money she receives as gifts into savings as well, and review her savings account statements with her so she can see how her money grows over long term. Discuss the “pay-yourself-first” strategy with your daughter, wherein she automatically allots a certain amount of her monthly income to savings. By prioritizing the habit of saving, your daughter learns the value of discipline – and how you have less of a chance to blow your budget if you contribute to savings before you start spending!

Even if your daughter is not making a lot of money, or simply relies on an allowance, your teenager has the distinct benefit of time. It’s important that she sees how small, regular savings can grow over time. By learning the basic principles of budgeting, saving and spending early on, your daughter will be able to learn from her mistakes now and develop habits that will enable her future financial security, while building confidence and a nest egg at the same time. There is no better time than as your teenage daughter approaches adulthood to help shape her financial behaviour. In fact, having conversations about money now will help your child make better decisions for both today and the future.