Teens who learn to manage their money will reap the benefits of financial stability, goal attainment, and monetary self-control. There are many life skills to teach a youth, but financial responsibility is one of those skills that needs to be taught, not only by academic knowledge, but by example.
Create a Budget
No matter how much money a teen has to spend, a clear understanding of what their expenses are is necessary. A written budget is a great tool to use for itemizing necessary and discretionary expenditures.
When this information is in written form, there is more awareness of which expenses are truly valid and which are too extravagant for a teen’s budget. The method used to prepare a budget can be computerized, as a basic spreadsheet, or in a more simplistic way, as a handwritten list.
If a teen looks hard enough, there are usually lower prices for the products and services that a teenager spends their money on. Brand loyalty can be sabotaging to a limited income so buying less advertised, and less popular items becomes a better way to stay within their budget.
Comparative shopping may take a little extra time, but a wise consumer, even a less seasoned one, should not want to squander their money. This can be one of their first lessons in developing an eye for quality and fair pricing.
Buy an Automobile
When a teenager purchases a car, this is one of their first steps toward independence and learning the value of setting financial goals.
Teaching a teen to save money for a car is a lesson that requires emphasis of patience, perseverance, and accomplishment. A teen’s budget that includes provision for saving, will be the starting point for buying a car.
Some companies know that setting a monetary goal like this is crucial. When the lesson of spending less, and saving more becomes a habit, a teen will begin to master the skill of reaching important goals in their life
A budget is not effective if there are no records to show spending transactions. Again, a valuable lesson for teens is to be disciplined enough to keep a money log. This written account of their expenditures will be a wake-up call to them if they are being careless with their funds.
Teenagers will grow up to be fiscally responsible adults if they receive early guidance about saving and spending money. Our society will prosper if our younger citizens accept their financial obligations, and create monetary stability for themselves and their future families.