Teenagers are at a very interesting phase of life where they are given some responsibility and encouraged to think about their future, but not always educated with the principles about how to use it. This is often the case with finances.
While mum and dad may have mentioned they should budget, it’s important to teach teenagers more than that. This article is going to overview just a few additional financial considerations that should be given when you’re financially educating your teenagers.
Don’t give them everything, expect them to pay for some things
Teenagers can be extremely expensive in their desires. From extra money for movie tickets to mobile phones and new bills they’d like to bring on. Don’t feel like you must foot the bill for their lifestyle the same way as you do when they’re younger. A gift every now and then is fine, but they should start thinking about how they can earn their own money to finance their lifestyles, so let them get to this step by not buying them anything their heart desires.
Teenagers often start to want a job of their own, something to generate a paycheque for all the luxuries they’re hoping to afford. This should be encouraged, provided they’re doing alright at school, but so should financial management of that money. Teach them the importance of budgeting, emphasise the dangers of over-spending. Rest assured, they’ll blow through a paycheque every now and then, but by laying the groundwork for an alternative you’ll be letting them know there is another way and that it doesn’t have to be every paycheque.
This is one of the most exciting parts about becoming old enough to work, so encourage it wherever possible (be it babysitting or food service).
Teach them to SAVE
Saving is a habit too many of us struggle to learn as adults. Encourage your teenagers to save a portion of every single paycheque to provide them with some cushions to fall back on, and funds for savings.
Teach them about charity
Another great way to get teenagers thinking about meaningful things to do with their money is to teach them about giving to the less fortunate. This could mean literal donations or volunteer work, but it will encourage your teen to feel like they’re contributing to the community in a meaningful way, be it time, money, or both! See if they have a cause they care about, or if there’s one you two can find together. The RSPCA or local conservation society perhaps?
Teach them the difference between a want and a need
The final thing I’ll mention is the importance of teaching your teen the difference between “want” and “need”. They need to make their car insurance payments, they want to have enough for gas to go driving with their friends. They should know this distinction and how much of their spending is going to each one.
If your teens have picked up even half the principles above, well done. Your job isn’t done yet, but you are well on your way to encouraging sound financial future for your loved one.