When it comes to giving money to teenage children, parents often want to teach them about money management while protecting them from fraud. Amy Spalding, a certified financial planner, suggests tailoring the approach to each child’s needs. Strategies include starting with cash to help kids understand and appreciate money, then transitioning to digital payments like Apple Wallet or Venmo.
Sarah Behr, a financial planner, recommends using apps that allow parents to monitor spending while giving teens autonomy. Paid products like Greenlight, GoHenry, and BusyKid offer additional support for managing a budget and chores for a fee. For more support, setting up a savings account or a Roth IRA for children can encourage saving for the future.
Gregg Murset, CEO of BusyKid, emphasizes teaching kids about tracking money, investing, and giving to charity. Spalding also suggests using online high-yield savings accounts to promote saving habits. Behr offers her daughter a savings match to encourage her to save more, promoting delayed gratification. Teens can save up to the amount of their earned income with a limit of $7,000 for 2024.
Ultimately, giving money to teenagers can be a valuable learning experience that sets them up for a successful financial future. By using a combination of cash, digital payments, and savings incentives, parents can help their children develop good money habits that will last a lifetime.
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