Teenagers find it difficult to resist something they want—as they are in a very sensitive phase of life. These growing years attract you for things in front of you desiring to have it at any cost. With the pressures of school, sports, friends being a teenager is hard enough these days.
We are currently living in a materialistic world where it needs a lot of patience to manage our expenses and the same goes for our kids.
If they don’t tread cautiously, they can become sucked into the false belief that “money solves everything.
Are you ready to help them develop a deep understanding of their finances which will lead to wise financial practices? Here are a few tips to teach them the importance of managing their finances, before they leave the nest and your constant guidance.
- Teach them to earn. Teach your teen to appreciate money. What better ways to teach them than by making them work hard for it? If you as parents earn money by working hard then why not teach our kids the same? If we give them everything and don’t make them work for it, they will never learn to put in a good work ethic and get rewarded in return. Give your kids some tasks which they can handle, you may create a list of responsibilities or chores that they can complete, to earn their own spending money. This will also instill a sense of, accomplishment in your teen and he will take pride in them.
2. Explain to them the consequences of debt. Take time to explain the basics of borrowing so they understand how expenses can continue to increase if the debt is not paid off. Show them calculations with interest rates for credit cards, auto loans, student loans, personal loans, and mortgages. Give them an understanding of debt-to-income ratios and what that means in the context of their financial well-being.
3. Persuade them to save: Your teen might have an opportunity to make a little money. This income might stem from a part-time job or a weekly allowance for household chores. Unfortunately, your teenager is also at an age where peer pressure and advertising might persuade him to buy things without thinking through the purchases. As tempting as spending is, this is a good time to teach the value of saving. Talk to your kids about paying themselves first by putting part of their earnings into a savings account.
4. Encourage them to donate – Teens are naturally self-centered. Just like little children. It’s on our part to teach our kids to think outside of themselves. They need to learn that there is a world of people out there and some of them are worse off. You may help your child in a great way by making your teens do service for others. Another great way is to have them learn to donate. Help them pack up some of their unused or unwanted things to give to charity. You can even help set them up to donate some of the money they earn to a charity. Sharing is a way of giving back which will help others in the community and will help your teen learns to be charitable and think of others.
5. Motivate them to plan for college. Now is a good time to talk about the growing cost of higher education. Your child should know how much cost will be incurred in his higher studies by you; make him aware of your expense and whether he will need to contribute through his savings or work. If you’ve established a college savings plan, discuss how it works. Explain the difference between tuition costs at a private college and a government school. You may also discuss with your kid the options like government or private loans, and ask them to do some research on possible opportunities for scholarships. It’s crucial to have an open conversation with your teen in this matter and also ask him to undergo some solid research.
At LPS Global, the best CBSE schools in Noida, we believe that entrusting teens now with opportunities to spend and save money allows them to learn while under parental guidance and protection.
Today’s financial understanding will become a wise decision making for better spending habits and responsible stewardship tomorrow.