1. Carelessness with personal itemsNot surprisingly, general irresponsibility in teens can translate into financial irresponsibility, Kay says. "If teens are constantly losing important personal items, such as home or car keys, cell phones, backpacks or wallets, they might not be ready for more money responsibility," says Kay. "If they are careless with items nearest and dearest to them, they may also be careless with a debit card."
2. Poor work ethicKay says that teens who have yet to pursue a job, whether working for you around the house or at a real job, may lack an appropriate respect for money. "If teens don't want to earn money and don't know what it takes to earn it, they won't manage it well either," says Kay.
In addition, you may be able to gauge your teen's work ethic by how well he or she handles homework, grades or sports practices. When teens want money, their work ethic may mature quickly.
3. A taste for instant gratificationIf you notice that your teens spend every cent the minute they get it (whether from a job or from an allowance), they are likely not mature enough to handle a bank account or debit or credit card, Kay says. "If they want what they want and they are constantly asking for more money from parents, they are not ready to manage their own money," says Kay. Ulzheimer adds that silly or immature purchases -- particularly those made on a credit card -- are another sign of questionable financial instincts.
4. Can't or won't do the mathKay says that if your teens do not possess the basic math skills or patience to learn to balance a checkbook, then they are likely not ready to handle most adult financial responsibilities. "Managing money takes diligence and attention to detail, and above all, math skills," says Kay. "These are important skills your teen must acquire in order to manage their own money properly."
Improving your teen's money habitsIf your teen displays one or more of the signs above, there is still hope. As teens mature, their instincts toward money may improve. They may suddenly become interested in getting a job, saving up for something or making wiser buying decisions. You can help by encouraging these signs of financial growth as much as possible. Kay suggests starting small by giving your teen a set amount of money for a simple task, such as a school supply budget, monthly entertainment budget or fall clothing budget, depending on what you think they can handle. Talk with your teen about what needs to go into that budget.
For example, their fall clothing budget might include shoes, but no backpack or a jacket. Exposing your children to your planning process can help them start building one of their own."Further, give your child the option to save any unused portion of the budget to see if you can jump-start a desire to save money in your child," says Kay. Additionally, Ulzheimer recommends adding your teen as an authorized user on your credit card (instead of co-signing for their own account) to help them learn responsible credit habits. "It's like a credit card with training wheels," says Ulzheimer. "If they make mistakes using a credit card on your account, you will catch it before any serious debt racks up and correct the behavior immediately." Ulzheimer says this can help you stay engaged in the learning process, help build credit in their name and monitor progress as they mature.