Clark Howard says teaching your kids about finances early on will pay off big in the end

ATLANTA — Teaching your children about paycheck deductions is key to helping them learn how to budget their money, said Channel 2 consumer adviser Clark Howard.

Howard said there has been a significant increase in the number of teenagers working, especially over the summer, with a rise of more than 30%.

He noted that teenagers today are earning more per hour than previous generations due to higher wages in entry-level jobs.

However, many teens are now encountering a common source of confusion: their net income seems much lower than expected despite earning a higher hourly wage.

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Howard sees this as an essential teaching moment for parents.

“Use this as a teaching moment to show them how much went to the federal government, how much went to the state, and the contributions to Social Security and Medicare,” Howard said.

Howard also suggested discussing the importance of saving and investing some of the money earned, specifically recommending a Roth IRA.

By explaining where their money is going and the value of saving, parents can help their children learn important financial management skills.

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