Money management is one of the greatest challenges of teenagers. They are still young, not yet been bothered with adult responsibilities, easily swayed by peer pressure and the deceptive trends in fashion.
Susan Beacham and her husband, Michael Beacham, authors of the book, ‘O.M.G.: Official Money Guide for Teenagers’, wrote in this lovely book that “The problem young kids and those in their young 20s have is that money is abstract, and it will get increasingly abstract”. She also expressed caution about online payments and credit cards. “You really need to need to get into their heads again and again about your choices, how you spend wisely, differences between a want and a need, because they need to protect themselves”. Teens find it really hard to save for a future that seems so far away. You must endeavor to aid them imbibe strong these financial habits below.
HOW TO GET TEENS TO SAVE MONEY
1. A COMMITTED SAVING HABIT
This is indeed a great skill, if mastered. Teenagers need to know that only those who save with discipline can attain financial freedom and independence. By doing this, they can start their journey to wealth. Spending less is saving more. They can keep the savings with you or in a bank account which you monitor closely. To help them further, teach them to save before spending, which is to take out their savings first, before spending the rest.
2. DISCIPLINED BUDGETING
A budget isn’t fulfilled on paper but until it is fully implemented. Proper budget execution requires some great effort and discipline. For it to be good, it must be done honestly. This helps them to know when to spend and when not to, what to spend on and what not to. It also aids their savings. Most crucially, they will inculcate good ethics and habits for their adult life.
3. PERSUADE THEM AGAINST LOANS AND CREDIT CARDS
Debts can be very dangerous. Your teenagers need to know this. Teach them it to them until they understand and believe it. It is no use spending money that isn’t yet yours, which you will pay back in tears. Why eat your tomorrow today? They should rather learn to save for their needs instead of borrowing for them.
4. RECORD ALL THEIR EXPENSES
Actually, the first step in money management is keeping good financial records. It should be detailed enough to cover every cash outflow. Tracking their spending will help them uphold proper priorities, because after a while, the books will display all necessary and unnecessary expenditures.
5. DISCUSS FAMILY FINANCES WITH THEM
Being open and straight about money matters with them will expand their minds early enough. It shows them the real picture about money. They will always know what the family budget cannot afford. This will be their motivation to start their personal savings and be committed towards it. It is so good if your kids get prepared ahead for the financial realities of the adult life.
6. ENCOURAGE THEM TO WORK FOR MONEY
Work is good for them. It helps them understand that working for money isn’t that easy. They begin to appreciate all of your efforts for the family. This causes them to take some of their burdens off you, and become more responsible. It also helps prepare them for adulthood.
7. GOAL-DRIVEN AND NOT DRIVEN BY PEER PRESSURE
Most of the erratic behaviors, mistakes, exuberances exhibited by teenagers are caused by inferiority complex, which is due to peer pressure. As a result, most of them keep trying to catch up. Financial errors and recklessness aren’t exempted. The perfect anti-dote for this menace is developing self-worth and self-confidence in them. This new self-elevation will set them away from competing with their peers, thus creating a formidable platform for solid personal financial goals, and the passion to realize them.
Follow these steps and watch your teenagers save and display positive money habits to help them in the long run!