In a perfect world, money would always be abundant, and we could without having to worry about budgeting. Unfortunately, unless you’re born into money or made a mint, that usually isn’t the case.
What’s worse is that with the ever-increasing cost of living, even teens need to know how to manage their money, sometimes before they hit 18. If you’ve been wondering how to teach your teen about money, you’ve come to the right place. Below are five easy tips to help your child become financially savvy.
Saving for College
Paying for college is one of the biggest expenses your child will ever have and you want to have them start saving as early as possible. If your family usually gives money at the holidays, talk to them about putting half away in a savings account.
Over time, they may very well build up a nice nest egg to help decrease the cost of tuition. If they don’t have enough, which is usually the case, you can always apply for a low-rate Private Parent Loan.
These loans allow you to be the borrower while your child receives the funds for their education. You will be responsible for the loan, so it’s important to understand this prior to applying.
In addition to saving gift money, you can also look into investments. These days, there are many younger people online who have mastered investing, even before they turn 21. There are also a variety of low-risk stocks you can consider investing in. You can research online or speak to a financial investor about your options.
Talk About Impulse Buying
At one time or another, most have made the mistake of impulse buying a big-ticket item. While doing it once isn’t really a big deal, doing it over and over can have disastrous results. Have a serious conversation about ways to offset impulse buying. Provide viable alternatives like saving up for an expensive purchase or waiting until that item goes on sale. Their focus should be on learning how to wait for something they want, not needing immediate gratification.
Learn How to Be Happy with Less
It’s human nature to want to buy things that make us feel good. After all, buying something we want is a reward and finally getting it often comes with a release of dopamine. The thing is, when young people only associate spending money with these feel-good emotions, overspending can become an issue.
Explain how there are other ways to feel content without having to buy something and it is one of the most important life skills for teens to learn how not to hinge your happiness on material things. Instead, happiness can come from doing their favorite hobby, cooking their favorite meal, or spending time with their besties.
Create a Mock Budget
If your teen has a part-time job, they should also have a bank account. Discuss how they need to set up a budget for their expenses, like grocery shopping, paying utilities and having spending money in their pocket. If they’re old enough, they can also put money away to help pay for their cell phone, health insurance and gas for the car. This will help them see where their money is going without you having to remind them to pay their bill.
Are you struggling with an entitled teenager? A defiant and anger teen that has become out-of-control? Have you exhausted your local resources — therapy isn’t working? Learn more about how behavior modification programs can help your teen. Contact us for a free consultation.