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Do money talks with your teenagers begin and end with, “How much do you need…”? Our advice is don’t tell teens what they need to know—show them.

It’s important for parents to be good financial role models, but it can prove challenging for some. In 2019, Debt.com ran a survey of over 1,000 Americans and found 68% had a budget. The COVID pandemic has caused many people to keep a closer eye on their finances, so it’s not surprising that the 2021 survey revealed 80% were now keeping a budget.

That increase means more teenagers are learning good financial habits from the most influential teachers they have — their parents or caregivers. If you want to begin teaching your child good financial habits they can use for the rest of their lives, here are a few suggestions:

• Compare credit card offers. Review with your teen several online offers or those you get in the mail so they can evaluate different interest rates and fees. Remember, credit unions offer competitive credit cards with rates that beat many other financial institutions and often charge fewer fees.

• Hammer home the minimum payment trap. Choose an item that costs $1,000, and use an online credit card repayment calculator to show how long it would take—and how much extra they would pay—if they pay only the minimum due each month. Show them your credit card statement that illustrates the cost of making minimum payments. Explain that it’s better to pay the credit card bill in full at the end of the month to avoid interest charges. If a costly item will take longer than three months to pay off, either save up for it or rethink the purchase. 

• Brace your teen for sticker shock. Rather than telling them to save for college, show them why they should. Have them choose three colleges or universities they’re considering, then check the net price calculator on the schools’ websites. Discuss the role that financial aid, scholarships, and grants play to reduce the sticker price.

Remember, the real world is a better teacher than most high school math assignments. But, for now, make your teens responsible for personal items such as new clothing, hair products, and snacks by permitting them to earn an allowance to pay for these items. This teaches the valuable lesson of spending wisely.

A simple Student Checking account is also an excellent way for teens to get hands-on experience balancing their budgets and developing good financial habits.